LOAN AGREEMENT
among
EDISON BROTHERS STORES, INC.,
a Debtor in Possession
as Borrower
EDISON BROTHERS APPAREL STORES, INC.,
a Debtor in Possession
as Borrower
THE GUARANTORS NAMED HEREIN
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as Agent
Dated as of November 9, 1995
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . 25
1.3 Other Terms . . . . . . . . . . . . . . . . . . . . . . . 25
2. LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.1 Facility . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2 Revolving Loans . . . . . . . . . . . . . . . . . . . . . 25
2.2A Letters of Credit . . . . . . . . . . . . . . . . . . . . 33
2.3 Lenders' Failure to Perform . . . . . . . . . . . . . . . 42
2.4 Funding Indemnities . . . . . . . . . . . . . . . . . . . 42
2.5 Illegality . . . . . . . . . . . . . . . . . . . . . . . 42
2.6 Unavailability of Eurodollar Rate Loans . . . . . . . . . 43
2.7 Increased Capital . . . . . . . . . . . . . . . . . . . . 44
2.8 Joint and Several Liability . . . . . . . . . . . . . . . 44
3. INTEREST AND OTHER CHARGES . . . . . . . . . . . . . . . . . . . 46
3.1 Interest on Revolving Loans . . . . . . . . . . . . . . . 46
3.2 Maximum Interest Rate . . . . . . . . . . . . . . . . . . 46
3.3 Facility Fee . . . . . . . . . . . . . . . . . . . . . . 47
3.4 Unused Line Fee . . . . . . . . . . . . . . . . . . . . . 47
3.5 Administration Fee . . . . . . . . . . . . . . . . . . . 47
3.6 Letter of Credit Fee . . . . . . . . . . . . . . . . . . 47
3.7 Field Examination Fees . . . . . . . . . . . . . . . . . 48
3.8 Fees Not Interest; Fully Earned . . . . . . . . . . . . . 48
4. PAYMENTS AND PREPAYMENTS . . . . . . . . . . . . . . . . . . . . 48
4.1 Mandatory Payments and Prepayments; Apportionment of Payments
and Prepayments among the Agent and the Lenders . . . . . 48
4.2 Manner, Time and Apportionment of Payments . . . . . . . 49
4.3 Indemnity for Returned Payments . . . . . . . . . . . . . 52
4.4 Application and Reversal of Payments . . . . . . . . . . 52
5. AGENT'S AND LENDERS' BOOKS AND RECORDS;
MONTHLY STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . 53
6. SUPERPRIORITY . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.1 Superpriority . . . . . . . . . . . . . . . . . . . . . . 53
6.2 Protection of Superpriority . . . . . . . . . . . . . . . 54
6.3 Location of Assets . . . . . . . . . . . . . . . . . . . 54
6.4 Title to, Liens on, and Sale and Use of Assets
and Properties 55
6.5 Reimbursement for Appraisals . . . . . . . . . . . . . . 55
6.6 Access and Examination . . . . . . . . . . . . . . . . . 55
6.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 56
6.8 Asset Reporting . . . . . . . . . . . . . . . . . . . . . 57
6.9 [Intentionally Omitted] . . . . . . . . . . . . . . . . . 58
6.10 Collection of Accounts; Payments . . . . . . . . . . . . 58
6.11 Inventory; Perpetual Inventory . . . . . . . . . . . . . 59
6.12 Equipment . . . . . . . . . . . . . . . . . . . . . . . . 60
6.13 [Intentionally Omitted] . . . . . . . . . . . . . . . . . 60
6.14 Right to Perform or Cure . . . . . . . . . . . . . . . . 60
6.15 [Intentionally Omitted] . . . . . . . . . . . . . . . . . 61
6.16 Agent's Rights, Duties, and Liabilities . . . . . . . . . 61
7. BOOKS AND RECORDS; FINANCIAL
INFORMATION; NOTICES . . . . . . . . . . . . . . . . . . . . . . 61
7.1 Books and Records . . . . . . . . . . . . . . . . . . . . 61
7.2 Financial Information . . . . . . . . . . . . . . . . . . 61
7.3 Notices to the Agent and the Lenders . . . . . . . . . . 65
8. GENERAL WARRANTIES AND REPRESENTATIONS . . . . . . . . . . . . . 67
8.1 Authorization, Validity, and Enforceability
of this Agreement and the Loan Documents . . . . . . . . 67
8.2 [Intentionally Omitted] . . . . . . . . . . . . . . . . . 68
8.3 Organization and Qualification . . . . . . . . . . . . . 68
8.4 Corporate Name; Prior Transactions . . . . . . . . . . . 68
8.5 Subsidiaries and Affiliates . . . . . . . . . . . . . . . 68
8.6 Financial Statements and Forecasts . . . . . . . . . . . 69
8.7 Capitalization and Corporate Structure . . . . . . . . . 70
8.8 Reorganization Matters . . . . . . . . . . . . . . . . . 70
8.9 Title to Property . . . . . . . . . . . . . . . . . . . . 70
8.10 [Intentionally Omitted]. . . . . . . . . . . . . . . . . 70
8.11 Proprietary Rights . . . . . . . . . . . . . . . . . . . 70
8.12 Trade Names and Terms of Sale . . . . . . . . . . . . . . 71
8.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . 71
8.14 Restrictive Agreements . . . . . . . . . . . . . . . . . 71
8.15 Labor Disputes . . . . . . . . . . . . . . . . . . . . . 71
8.16 Environmental Laws . . . . . . . . . . . . . . . . . . . 71
8.17 No Violation of Law . . . . . . . . . . . . . . . . . . . 72
8.18 No Default . . . . . . . . . . . . . . . . . . . . . . . 72
8.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.21 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 73
8.22 Private Offerings . . . . . . . . . . . . . . . . . . . . 74
8.23 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . 74
8.24 No Material Adverse Change . . . . . . . . . . . . . . . 74
8.25 Disclosure . . . . . . . . . . . . . . . . . . . . . . . 74
9. AFFIRMATIVE AND NEGATIVE COVENANTS . . . . . . . . . . . . . . . 75
9.1 Taxes and Other Obligations . . . . . . . . . . . . . . . 75
9.2 Corporate Existence and Good Standing . . . . . . . . . . 75
9.3 Compliance with Law and Agreements; Maintenance
of Licenses 76
9.4 Maintenance of Property and Insurance . . . . . . . . . . 76
9.5 Environmental Laws . . . . . . . . . . . . . . . . . . . 77
9.6 Mergers, Consolidations, Acquisitions, or Sales . . . . . 77
9.7 Distributions; Issuance of Shares; Etc. . . . . . . . . . 78
9.8 Transactions Affecting Obligations . . . . . . . . . . . 78
9.9 Guaranties . . . . . . . . . . . . . . . . . . . . . . . 78
9.10 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.11 Debt Payments and Prepayments; Modification of Debt Terms 80
9.12 Transactions with Affiliates . . . . . . . . . . . . . . 80
9.13 Non-Loan Party Subsidiaries . . . . . . . . . . . . . . . 81
9.14 Business Conducted . . . . . . . . . . . . . . . . . . . 81
9.15 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9.16 Sale and Leaseback Transactions . . . . . . . . . . . . . 81
9.17 New Subsidiaries . . . . . . . . . . . . . . . . . . . . 81
9.18 Restricted Investments . . . . . . . . . . . . . . . . . 81
9.19 Capital Expenditures . . . . . . . . . . . . . . . . . . 81
9.20 Minimum EBITDA . . . . . . . . . . . . . . . . . . . . . 82
9.21 Termination of Liens . . . . . . . . . . . . . . . . . . 82
9.22 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 82
9.23 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.24 Interim Bankruptcy Court Order; Final
Bankruptcy Court Order; Administrative
Expense Claim Priority . . . . . . . . . . . . . . . . . 84
9.25 Supplemental Disclosure . . . . . . . . . . . . . . 84
9.26 Further Assurances . . . . . . . . . . . . . . . . . . . 84
10. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . 85
10.1 Conditions Precedent to Revolving Loans on the Closing Date 85
10.2 Conditions Precedent to Each Revolving Loan and Each Letter
of Credit . . . . . . . . . . . . . . . . . . . . . . . . 87
11. DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 90
11.1 Events of Default . . . . . . . . . . . . . . . . . . . . 90
11.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . 94
12. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . 94
13. WAIVER, AMENDMENTS; ASSIGNMENTS; SUCCESSORS . . . . . . . . . . 95
13.1 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . 95
13.2 Amendments and Waivers . . . . . . . . . . . . . . . . . 95
13.3 Assignments; Participations . . . . . . . . . . . . . . . 96
14. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 101
14.1 Appointment . . . . . . . . . . . . . . . . . . . . . . 101
14.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . 102
14.3 Rights, Exculpation, Etc . . . . . . . . . . . . . . . . 103
14.4 Reliance . . . . . . . . . . . . . . . . . . . . . . . . 104
14.5 Indemnification . . . . . . . . . . . . . . . . . . . . 104
14.6 Agent in Individual Capacity . . . . . . . . . . . . . . 105
14.7 Successor Agent . . . . . . . . . . . . . . . . . . . . 105
15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 106
15.1 Cumulative Remedies . . . . . . . . . . . . . . . . . . 106
15.2 Severability . . . . . . . . . . . . . . . . . . . . . . 106
15.3 Governing Law . . . . . . . . . . . . . . . . . . . . . 106
15.4 Intentionally Omitted . . . . . . . . . . . . . . . . . 106
15.5 Waiver of Jury Trial, Etc . . . . . . . . . . . . . . . 106
15.6 Survival of Representations and Warranties . . . . . . . 107
15.7 General Indemnification . . . . . . . . . . . . . . . . 107
15.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 109
15.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . 110
15.10 Waiver of Notices . . . . . . . . . . . . . . . . . . . 112
15.11 Binding Effect; Disclosure . . . . . . . . . . . . . . 112
15.12 Modification . . . . . . . . . . . . . . . . . . . . . 113
15.13 Counterparts . . . . . . . . . . . . . . . . . . . . . 113
15.14 Captions . . . . . . . . . . . . . . . . . . . . . . . 113
15.15 Right of Setoff . . . . . . . . . . . . . . . . . . . . 113
15.16 [Intentionally Omitted] . . . . . . . . . . . . . . . . 113
15.17 Liens in Favor of Federal Reserve Board . . . . . . . . 113
15.18 Other Security and Guaranties . . . . . . . . . . . . . 114
15.19 Field Audit and Examination Reports;
Disclaimer by Lenders . . . . . . . . . . . . . . . . 114
15.20 Defaulting Lenders' Rights . . . . . . . . . . . . . . 115
16. GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Schedules and Exhibits
Schedule 6.3 Locations of Assets
Schedule 6.7 Insurance
Schedule 6.11 Inventory
Schedule 8.4 Corporate Name
Schedule 8.5 Subsidiaries and Affiliates
Schedule 8.7 Capitalization
Schedule 8.9 [INTENTIONALLY OMITTED]
Schedule 8.10 [INTENTIONALLY OMITTED]
Schedule 8.11 Proprietary Rights
Schedule 8.12 Trade Names and Terms of Sale
Schedule 8.13 Litigation
Schedule 8.14 Restrictive Agreements
Schedule 8.15 [INTENTIONALLY OMITTED]
Schedule 8.16 Environmental
Schedule 8.18 Defaults
Schedule 8.19 ERISA
Schedule 8.24 Material Adverse Change
Schedule 9.6 [INTENTIONALLY OMITTED]
Schedule 9.10 Debt
Schedule 9.11 Certain Debt
Schedule 9.14 [INTENTIONALLY OMITTED]
Schedule 9.15 Liens
Schedule 10.1(b) Documents
Exhibit A [INTENTIONALLY OMITTED]
Exhibit B Form of Interim Bankruptcy Order
Exhibit C [INTENTIONALLY OMITTED]
Exhibit D [INTENTIONALLY OMITTED]
Exhibit E [INTENTIONALLY OMITTED]
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Notice of Conversion
Exhibit H Form of Borrowing Base Certificate
Exhibit I [INTENTIONALLY OMITTED]
Exhibit J Form of Assignment and Acceptance
LOAN AGREEMENT, dated as of November 9, 1995, among the
financial institutions listed on the signature pages hereof (such
financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), BANKAMERICA BUSINESS CREDIT, INC., a
Delaware corporation, as agent for the ratable benefit of itself and the
Lenders, with offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and EDISON BROTHERS STORES, INC., a Delaware corporation and a Debtor in
Possession, with offices at 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx
00000 ("Parent"), EDISON BROTHERS APPAREL STORES, INC, a Missouri
corporation and a Debtor in Possession, with offices at 000 Xxxxx
Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 ("Apparel", and together with the
Parent, jointly and severally, the "Borrower"), and the Guarantors named
herein and signatories hereto.
W I T N E S S E T H
WHEREAS, on November 3, 1995 (the "Filing Date"), the
Borrower and its domestic Subsidiaries each filed in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") a
petition for reorganization under Chapter 11 of the Bankruptcy Code (as
defined hereinafter); and
WHEREAS, the Borrower and the Guarantors entered into a Loan
and Security Agreement dated as of September 22, 1995 (as amended,
modified and supplemented, the "Pre-Petition Loan Agreement") with
BankAmerica Business Credit, Inc. ("BankAmerica") in its individual
capacity, pursuant to which BankAmerica made available to the Borrower
revolving loans (the "Pre-Petition Revolving Loans") and letters of
credit (the "Pre-Petition Letters of Credit"); and
WHEREAS, the Borrower has requested the Agent and the Lenders
to make available to the Borrower a revolving line of credit for loans
and letters of credit in an aggregate amount not to exceed $200,000,000
outstanding at any one time, which revolving line of credit the Borrower
will use to repay the Pre-Petition Revolving Loans and for its ongoing
working capital needs for the period commencing on the Closing Date (as
defined hereinafter) through (but not including) the Termination Date
(as defined hereinafter);
WHEREAS, the Parent provides cash and other services to each
Guarantor and either purchases inventory on behalf of such Guarantor or
pays for the inventory purchased by such Guarantor as a result of which
the Guarantors will derive substantial benefit from the effectiveness of
this Agreement;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable
consideration, the receipt of which is hereby acknowledged, the
Borrower, the Guarantors, the Agent and the Lenders hereby agree as
follows:
1. DEFINITIONS.
1.1 Defined Terms. As used herein:
"Account" means a Loan Party's right to payment for a sale or
lease and delivery of goods or rendition of services in the ordinary
course of any Loan Party's business.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"Affiliate" means a Person (other than any Lender or an
Affiliate of a Lender) (A) which, directly or indirectly, controls, is
controlled by or is under common control with, the Borrower; (b) which
beneficially owns or holds, directly or indirectly, five percent (5%) or
more of any class of voting stock of the Borrower; or (c) five percent
(5%) or more of any class of the voting stock (or if such person is not
a corporation, five percent (5%) or more of the equity interest) of
which is beneficially owned or held, directly or indirectly, by the
Borrower. The term control (including the terms "controlled by" and
"under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of the Person in question.
"Agent" means BankAmerica Business Credit, Inc. solely in its
capacity as agent for the ratable benefit of itself and the Lenders, and
any successor Agent appointed pursuant to Section 14.7.
"Agent Advances" has the meaning set forth in
Section 2.2(g)(i).
"Agreed Administrative Expense Claim Priorities" means the
administrative expense claims incurred by the Borrower in the Chapter 11
Case and shall have the following order of priority:
first, (i) amounts payable pursuant to 28 U.S.C.
section 1930(a)(6) and (ii) allowed fees and expenses of attorneys,
accountants, financial advisors and consultants retained by the
Borrower or any official creditors committee appointed in the
Chapter 11 Case pursuant to sections 327 or 1103 of the Bankruptcy
Code (except to the extent that such fees and expenses represent
services or were incurred in the prosecution of actions, claims or
causes of action against BankAmerica, the Agent or any Lender
relating to any Loan Document or the Facility or the Pre-Petition
Loan Documents), but the amount entitled to priority under clause
(ii) of this clause first shall not exceed $5,000,000;
second, all Obligations;
third, all other allowed administrative expense claims.
"Agreement" means this Loan Agreement, as amended, restated,
modified or supplemented from time to time in accordance with the terms
hereof.
"Assignment and Acceptance" has the meaning specified in
Section 13.3(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel engaged by the
Agent, the allocated cost of internal legal services of the Agent and
all disbursements of internal counsel of the Agent.
"Availability" means:
(i) the lesser at any point in time of: (A) (i) at all times
prior to the Final Bankruptcy Court Order Date, $ 100,000,000 and (ii)
at all times on and after the Final Bankruptcy Court Order Date,
$200,000,000, or (B) the sum of (x) fifty percent (50%) of the value of
Eligible Inventory of the Loan Parties calculated at the lower of book
value (determined on a first-in-first-out basis) and market value and
(y) ninety-five percent (95%) of the amount of cash deposited with Agent
(which may be invested by the Agent in investments permitted under the
definition of "Restricted Investments") pursuant to an agreement (and
any necessary Bankruptcy Court order) in form and substance satisfactory
to the Agent, minus
(ii) the sum of: (A) the unpaid principal balance of Revolving
Loans at that time plus the amount, if any, of (x) amounts drawn under
the Letters of Credit to the extent not already included in the
Revolving Loans, and (y) one-hundred percent (100%) of the undrawn
amount of all Letters of Credit plus (B) reserves, in the Agent's
reasonable discretion, for accrued interest on the Revolving Loans plus
(C) reserves for rebates due the Loan Parties on Inventory purchases
made by the Loan Parties and reserves for shrinkage of Inventory plus
(D) all other reserves (including, without limitation, reserves with
respect to Permitted Liens or litigation) which the Agent in its
reasonable discretion deems necessary or desirable to maintain with
respect to the Loan Party's account, including, without limitation, any
amounts which the Agent may be obligated to pay in the future for the
account of any Loan Party, minus
(iii) reserves (including, without limitation, the Carve-Out
Reserve) for Carve-Out Expenses, claims against any Loan Party under
Section 506(c) of the Bankruptcy Code and other claims that the Agent
reasonably believes could have priority over the Obligations.
"BankAmerica" has the meaning specified in the recitals to
this Agreement.
"BankAmerica Revolving Loan" and "BankAmerica Revolving
Loans" have the respective meanings specified in Section 2.2(f).
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto.
"Bankruptcy Court" has the meaning set forth in the preamble
to this Agreement.
"Boatmen s" means The Boatmen s National Bank of St. Louis.
"Borrower" has the meaning specified in the recitals to this
Agreement.
"Business Day" means any day that is not a Saturday, Sunday,
or day on which banks in New York, New York or San Francisco, California
are required or permitted to close.
"Capital Expenditures" means, in respect of any Person, all
expenditures for the purchase or construction of fixed assets, plant or
equipment or leasehold improvements that are or should be capitalized in
accordance with GAAP, including, without limitation, in connection with
Capital Leases.
"Capital Lease" means any lease of Property by the Borrower
or any of its Subsidiaries that, in accordance with GAAP, should be
reflected as a liability on the balance sheet of the Borrower or such
Subsidiary.
"Carve-Out Expenses" means those amounts, fees, expenses and
claims set forth in clause "first" of the definition of the term "Agreed
Administrative Expense Claim Priorities."
"Carve-Out Reserve" means at any time an amount equal to (i)
$5,000,000 less (ii) the aggregate amount of Priority Professional
Expenses the payment of which has been approved by the Bankruptcy Court
and which have actually been paid on or after the occurrence of an Event
of Default through and including such time.
"Change of Control" means the transfer, sale, assignment or
lease of all or substantially all of the Property of the Parent and its
Subsidiaries in a single transaction or in a series of transactions.
"Chapter 11 Case" means the Borrower's and its domestic
Subsidiaries' reorganization cases under chapter 11 of the Bankruptcy
Code pending in the Bankruptcy Court.
"Closing Date" means November 9, 1995.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means, with respect to each Lender, the amount
set forth beside such Lender's name under the heading Commitment on the
signature pages of this Agreement or on the signature page of an
effective Assignment and Acceptance pursuant to which such Lender became
a Lender hereunder in accordance with the provisions of Section 13.3, as
such Commitment shall be adjusted in accordance with Section 13.3 as
reflected in the Register mentioned maintained by the Agent in
accordance with Section 13.3(c), and "Commitments" shall, collectively,
mean the aggregate amount of the Commitments of all the Lenders which,
as of the Interim Bankruptcy Court Order Date, equals $100,000,000 and
as of the Final Bankruptcy Court Order Date equals $200,000,000.
"Debt" means all liabilities, obligations and indebtedness of
the Borrower or any Subsidiary of the Borrower to any Person, of any
kind or nature, now or hereafter owing, arising, due or payable,
howsoever evidenced, created, incurred, acquired or owing, whether pri-
xxxx, secondary, direct, contingent, fixed or otherwise. Without in any
way limiting the generality of the foregoing, Debt shall specifically
include the following:
(i) the Borrower's or any of its Subsidiaries' liabilities
and obligations to trade creditors;
(ii) all Obligations;
(iii) all obligations and liabilities of any Person secured by
any Lien on the Borrower's or any of its Subsidiaries' Property,
even though the Borrower or such Subsidiary shall not have assumed
or become liable for the payment thereof; provided, however, that
all such obligations and liabilities which are limited in recourse
to such Property shall be included in Debt only to the extent of
the book value of such Property as would be shown on a balance
sheet of the Borrower or such Subsidiary, as the case may be,
prepared in accordance with GAAP;
(iv) all obligations and liabilities created or arising under
any Capital Lease or conditional sale or other title retention
agreement with respect to Property used or acquired by the Borrower
or any Subsidiary of the Borrower, even if the rights and remedies
of the lessor, seller or lender thereunder are limited to
repossession of such Property; provided, however, that all such
obligations and liabilities which are limited in recourse to such
Property shall be included in Debt only to the extent of the book
value of such Property as would be shown on a balance sheet of the
Borrower or such Subsidiary, as the case may be, prepared in accor-
dance with GAAP;
(v) all accrued pension fund and other employee benefit plan
obligations and liabilities;
(vi) all obligations and liabilities under Guaranties; and
(vii) deferred taxes.
"Debt for borrowed money" means Debt for borrowed money or as
evidenced by notes, bonds, debentures or similar evidences of any such
Debt of such Person, the deferred and unpaid purchase price of any
property or business (other than trade accounts payable incurred in the
ordinary course of business and constituting current liabilities), and
all obligations under Capital Leases.
"Defaulted Amount" has the meaning set forth in Section
4.2(d).
"Defaulting Lender" means any Lender (a) which has defaulted
in its obligation to fund its Pro Rata Share of any Revolving Loan, any
participation under this Agreement or any other amount owing to the
Agent or BankAmerica under any Loan Document to the extent that such
default is continuing or (b) as to which any Public Authority has
advised the Borrower or the Agent that such Lender does not intend to
continue to fund such Lender's pro rata share of any future Revolving
Loan or participation hereunder.
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of Property in
respect of capital stock of such corporation, other than distributions
in capital stock of the same class; and (b) the redemption or other
acquisition of any capital stock of such corporation.
"Distribution Amount" has the meaning set forth in Section
4.2(d).
"DOL" means the United States Department of Labor or any
successor agency.
"EBITDA" means, for any period, the sum of (i) net income
determined in accordance with GAAP (without taking into account any
extraordinary gains or non-cash extraordinary losses), plus, to the
extent deducted in computing net income, the sum of (ii) interest
expense determined in accordance with GAAP, (iii) depreciation and
amortization, (iv) professional fees and other restructuring charges
incurred by the Loan Parties during the Chapter 11 Cases not in excess
of $150,000,000 during the Fiscal Year ending on or about January 31,
1996 and $60,000,000 during each Fiscal Year thereafter, and (v)
federal, state and local income taxes, in each case for Parent and its
consolidated Subsidiaries, determined in accordance with GAAP.
"Eligible Inventory" means finished goods Inventory that:
(a) is not, in the Agent's sole judgment, obsolete or
unmerchantable;
(b) is located at premises owned by or leased to a Loan
Party or on premises otherwise reasonably acceptable to the Agent
within the United States or is in transit in the United States to
such premises (other than in transit from vendors) or is located
outside of the United States and is in transit to such premises
(other than in transit from vendors) and is subject to a
merchandise Letter of Credit issued pursuant to Section 2.2A;
(c) the Agent otherwise deems eligible as the basis for
Revolving Loans and Letters of Credit based on such other credit
considerations as the Agent may from time to time establish in its
sole discretion; and
(d) is not subject to a Lien in favor of Mercantile or any
other issuer or provider of letters of credit or any other Person,
whether under the Mercantile Letter of Credit Facility, or
otherwise.
Without intending to limit the Agent's discretion to establish other
criteria of eligibility, inventory located outside of the continental
United States, Alaska and Hawaii (other than as set forth in clause (b)
above), piece-work, packaway inventory, packaging and shipping material,
supplies, xxxx and hold Inventory, non-first quality returned Inventory,
defective Inventory, raw materials, work-in-process, excess or slow
moving Inventory or Inventory delivered to the Borrower on consignment
shall not constitute Eligible Inventory.
"Entry Date" means the date the Interim Bankruptcy Court
Order is entered.
"Environmental Laws" means all federal, state and local laws,
rules, regulations, ordinances, and consent decrees relating to the
health, safety, hazardous substances, and environmental matters
applicable to the Borrower's or any of its Subsidiaries' business and
facilities (whether or not owned by it). Such laws and regulations
include but are not limited to the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. section 6901 et seq., as amended; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. section 9601 et seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. section 2601 et seq., as amended; the Clean Water Act, 33
U.S.C. section 466 et seq., as amended; the Clean Air Act, 42 U.S.C.
section 7401 et seq., as amended; any federal state or local "Superfund"
or "Superlien" law and other environmental cleanup programs; and any other
federal, state, or local statute, rule, regulation, order judgment or
decree, as now or at any time hereafter amended or in effect and then
applicable to the Borrower or any of its Subsidiaries that regulates,
restates or imposes liability or standards of conduct concerning air
emissions, water discharges or run-off, noise emissions, waste
management or otherwise concerns the protection of the environment or of
health or safety from environmental risks.
"Equipment" means all of the Loan Parties' now owned and
hereafter acquired machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory),
including, without limitation, data processing hardware and software,
motor vehicles, aircraft, dies, tools, jigs, and office equipment, as
well as all of such types of property leased by any Loan Party and all
of any Loan Party's rights and interests with respect thereto under such
leases (including, without limitation, options to purchase); together
with all present and future additions and accessions thereto,
replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of
the foregoing, and all manuals, equipment drawings, instructions,
warranties and rights with respect thereto wherever any of the foregoing
is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Eurodollar Rate" means, for each Interest Period in respect
of any Eurodollar Rate Loan, an interest rate per annum (rounded upward
to the nearest 1/16th of 1%) determined pursuant to the following
formula:
Eurodollar Rate = LIBOR
1.00 - Eurodollar Reserve
Percentage
Where:
"Eurodollar Reserve Percentage" means the maximum reserve percentage
(expressed as a decimal, rounded upward to the nearest 1/100th of 1%) in
effect on the date LIBOR for such Interest Period is determined (whether
or not applicable to Bank of America National Trust and Savings
Association) under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities") having a term comparable to such Interest Period; and
"LIBOR" means the rate of interest per annum equal to the rate of
interest per annum notified to the Agent by Bank of America National
Trust and Savings Association as the rate of interest at which dollar
deposits in an amount approximately equal to the amount of the Revolving
Loan to be made or continued as, or converted into, a Eurodollar Rate
Loan by BankAmerica and having a maturity equal to such Interest Period
would be offered to major banks in the London interbank market at their
request at or about 11:00 A.M. (London time) on the second Business Day
before the commencement of such Interest Period.
"Eurodollar Rate Loan" means a Revolving Loan bearing interest
based on the Eurodollar Rate in accordance with Article 2.
"Event" means any event or condition which, with notice, the
passage of time, or any combination thereof, would constitute an Event
of Default.
"Event of Default" has the meaning specified in Section 11.1.
"Facility" has the meaning specified in Section 2.1.
"Federal Funds Rate" means for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Filing Date" means November 3, 1995.
"Final Bankruptcy Court Order" means an order of the
Bankruptcy Court in form, scope and substance acceptable to the Agent
and the Majority Lenders finally approving this Agreement and the other
Loan Documents, as the same may be amended, modified or supplemented
from time to time with the express written joinder and consent of the
Agent, the Majority Lenders and the Borrower, which order has not been
vacated, appealed with respect to the question of whether Agent or any
Lender is a good faith lender under Section 364(e) of the Bankruptcy
Code, reversed, stayed, modified or supplemented.
"Final Bankruptcy Court Order Date" means the date (which
shall be no later than January 2, 1996) on which the Final Bankruptcy
Court Order shall have been duly entered by the Bankruptcy Court and
shall be in full force and effect, and shall not have been reversed,
stayed, modified or amended, absent written consent of the Agent, the
Majority Lenders and the Borrower.
"Financial Statements" means, with respect to the Parent and
its Subsidiaries for any period, the then most recent consolidated
financial statements of the Parent and its Subsidiaries delivered
pursuant to Section 7.2(a) or (b) and prior to the delivery of financial
statements pursuant to Section 7.2(a) or (b), the financial statements
of the Parent and its Subsidiaries referred to in Section 8.6(b).
"Fiscal Year" means the Parent's fiscal year for financial
accounting purposes. The fiscal year of the Parent ends on the Saturday
closest to January 31 of each year.
"GAAP" means at any particular time generally accepted
accounting principles consistently applied and as in effect at such
time; provided, however, that for the purpose of determining compliance
by the Borrower with Section 9.18 and Section 9.19, "GAAP" shall mean
generally accepted accounting principles consistently applied and as in
effect as of the date hereof.
"Guarantor" means each of the entities designated as such on
the signature pages hereto.
"Guaranty" by any Person means all obligations of such Person
which in any manner directly or indirectly guarantee the payment or
performance of any indebtedness or other obligation of any other Person
(the "guaranteed obligations"), or assure or in effect assure the holder
of the guaranteed obligations against loss in respect thereof,
including, without limitation, any such obligations incurred through an
agreement, (a) to purchase the guaranteed obligations or any Property
constituting security therefor; or (b) to advance or supply funds for
the purchase or payment of the guaranteed obligations or to maintain a
working capital or other balance sheet condition.
"Governmental Authority" shall mean any Federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality or any court, in each case whether of the
United States or foreign.
"Indemnified Party" has the meaning specified in Section 15.7.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to any Loan Party from, which are due
from any Loan Party to, or which otherwise arise from any transaction by
any Loan Party with, any Affiliate.
"Interest Payment Date" means (i) with respect to any
Reference Rate Loan, the first Business Day of each month, commencing
December 1, 1995 and (ii) with respect to any Eurodollar Rate Loan, the
last day of the Interest Period applicable thereto and with respect to
an Interest Period of six months, at the end of the first three months.
"Interest Period" means, as to any Eurodollar Rate Loan, the
period commencing on the date of such Eurodollar Rate Loan and ending on
the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is one,
two, three or six months thereafter, as the Borrower may elect with
respect to Eurodollar Rate Loans; provided, however, that (x) if an
Interest Period would end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless, with respect to Eurodollar Rate Loans, such next succeeding
Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day, (y) no
Interest Period shall end later than the last day of the scheduled term
of this Agreement and (z) interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such
Interest Period.
"Interim Bankruptcy Court Order" means the order of the
Bankruptcy Court substantially in the form attached hereto as Exhibit B,
as the same may be amended, modified or supplemented from time to time
with the express written consent of the Agent, the Majority Lenders and
the Borrower.
"Interim Bankruptcy Court Order Date" means the date (which
shall be no later than November 11, 1995) on which each of the following
shall have occurred: (i) the Interim Bankruptcy Court Order shall have
been duly entered by the Bankruptcy Court and shall be in full force and
effect, and shall not have been appealed with respect to the question of
whether Agent or any Lender is a good faith lender under Section 364(e)
of the Bankruptcy Code, reversed, stayed, modified, supplemented,
vacated or amended, absent written consent of the Agent, the Majority
Lenders and the Borrower; and (ii) the Agent shall have determined that
all conditions set forth in Article 10 shall have been satisfied or
waived by the Agent and the requisite Lenders (treating the Interim
Bankruptcy Court Order Date as the date on which the initial Revolving
Loan is funded).
"Inventory" means all of the Loan Parties' now owned and
hereafter acquired inventory, goods, merchandise, and other personal
property, wherever located in the United States or, if covered by a
Letter of Credit, within or outside of the United States, to be
furnished by any Loan Party under any contract of service or held for
sale or lease, all raw materials, work-in-process, finished goods,
returned and repossessed goods, and materials and supplies of any kind,
nature or description which are or might be used or consumed in a Loan
Party's business or used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such inventory, goods,
merchandise and such other personal property, and all documents of title
or other documents representing them. For purposes of all calculations
and valuations in this Agreement, unless otherwise expressly indicated,
all Inventory shall be calculated and valued at the lower of book value
(determined on a first-in-first-out basis) and market value.
"IRS" means the Internal Revenue Service or any successor
agency.
"Latest Forecasts" means: the forecasts of the financial
condition, results of operations, and cash flow of the Parent and its
Subsidiaries on a consolidated basis for the period ending January 31,
1997, as referred to in Section 8.6(a).
"Lender" or "Lenders" has the meaning specified in the
preamble to this Agreement.
"Letter of Credit" has the meaning specified in Section 2.2A.
"Lien" means: any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute, or contract,
and including without limitation, a security interest, charge, claim, or
lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, or
conditional sale, or a lease, consignment or bailment for security
purposes, or any reservation, exception, encroachment, easement, right-
of-way, condition, restriction, lease or other title exception or
encumbrance affecting Property.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Payment Account
Agreements and all other agreements, instruments and documents
heretofore, now or hereafter evidencing, guaranteeing or otherwise
relating to the Obligations.
"Loan Party" and "Loan Parties" means, jointly and severally,
the Borrower and the Guarantors.
"Majority Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate more than 50%.
"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
Parent and its Subsidiaries taken as a whole; (b) a material impairment
of the ability of any Loan Party 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 Parent
or any of its Subsidiaries of any Loan Document.
"Mercantile" means Mercantile Bank of St. Louis National
Association.
"Mercantile Letter of Credit Facility" shall mean (i) the On
Line and International Banking System Agreement dated May 27, 1992 as
amended to date between Mercantile and Parent; (ii) the Modification to
On-Line International Banking System Agreement dated September 22, 1995
between Mercantile and the Parent; (iii) the Commercial LC Facility
Guaranty dated as of September 22, 1995 by certain subsidiaries of the
Parent in favor of Mercantile; and (iv) the Letter Agreement (as defined
in the Commercial LC Facility Guaranty referred to in clause (iii)
above).
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA.
"Non-Loan Party Subsidiaries" shall mean the entities listed
on Schedule 3.
"Notice of Borrowing" shall have the meaning set forth in
Section 2.2(b).
"Notice of Conversion" shall have the meaning set forth in
Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and Debts owing by the
Borrower and/or any Guarantor to the Agent, any Lender or BankAmerica,
arising under this Agreement, any Loan Document or the Pre-Petition Loan
Documents, whether or not evidenced by any note, or other instrument or
document, whether arising from an extension of credit, opening of a
letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect, absolute or contingent, due or to
become due, primary or secondary, as principal or guarantor, and
including, without limitation, all interest, charges, expenses, fees,
attorneys' fees (including, but not limited to, allocated in house
counsel fees and disbursements), Attorney Costs, filing fees and any
other sums chargeable to the Borrower hereunder, under another Loan
Document, or under the Pre-Petition Loan Documents. The term
"Obligations" includes, without limitation, all debts, liabilities and
obligations now or hereafter owing from the Borrower under or in
connection with any Letter of Credit and all debts, liabilities and
obligations now or hereafter owing to BankAmerica under or in connection
with any Pre-Petition Letter of Credit.
"Participating Lender" means any Person who shall have been
granted the right by any Lender to participate in the Loans and who
shall have entered into a participation agreement that is not
inconsistent with the provisions of Section 13.3(e) and is otherwise in
form and substance satisfactory to the Agent.
"Payment Account" means each bank account described on
Schedule 4 hereto established pursuant to Section 6.10, to which the
funds of the Borrower and the other Loan Parties (including, without
limitation, Proceeds of Property), are deposited or credited, and which
is maintained in the name of the Agent or the Borrower as the Agent may
determine, on terms acceptable to the Agent. The Borrower may designate
other bank accounts located at financial institutions reasonably
acceptable to Agent in replacement of those bank accounts described on
Schedule 4 upon such prior written notice and pursuant to such
arrangements (including the execution and delivery of Payment Account
Agreements) agreed to by the Agent in advance in writing.
"Payment Account Agreement" is defined in Section 6.10.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permitted Liens" means the following Liens:
(a) Liens for taxes or other governmental charges not yet
payable or Liens for taxes or other governmental charges being
contested in good faith and by proper proceedings diligently
pursued, provided that a reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor on
the applicable Financial Statements and that a stay of enforcement
of any such Lien is in effect;
(b) Liens in favor of the Agent;
(c) Liens upon Equipment granted in connection with the
acquisition of such Equipment after the date hereof (including,
without limitation, pursuant to Capital Leases), provided, that:
(i) the cost of each such acquisition constitutes a Capital
Expenditure permitted by Section 9.19;(ii) the Debt incurred to
finance each such acquisition is permitted by Section 9.10;
(iii) each such Lien attaches only to the Equipment acquired with
the Debt secured thereby; and (iv) the principal amount of the
indebtedness secured by any item of Equipment shall not exceed 100%
of the cost thereof;
(d) reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions, leases and
other similar title exceptions or encumbrances affecting any real
property of the Parent or any of the Subsidiaries, provided they do
not in the aggregate materially detract from the value of said
Properties or materially interfere with their use in the ordinary
conduct of the Borrower's business;
(e) deposits under workmen s compensation, unemployment
insurance, social security and other similar laws;
(f) Liens relating to statutory obligations with respect to
surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(g) carriers', warehousemen's, mechanics', materialmen's or
other similar Liens arising in the ordinary course of business
(i) in an amount not to exceed $18,000,000 securing obligations
arising prior to the Filing Date and (ii) securing sums which are
not overdue with respect to Obligations arising on or after the
Filing Date;
(h) Liens existing on the Filing Date reflected in Schedule
9.15 hereto, but not any increases in the principal amount secured
thereby; and
(i) judgment Liens being contested in good faith and by
proper proceedings diligently pursued, provided that (a) a reserve
or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor on the applicable Financial
Statements and (b) a stay of enforcement of any such Lien is in
effect.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, Public Authority, or any other entity.
"Plan" means any pension or other employee benefit plan (as
defined in Section 3(3) of ERISA) including any such plan which is
subject to Title IV of ERISA, and which is: (a) a plan maintained by
the Borrower or any Related Company; (b) a plan to which the Borrower or
any Related Company contributes or is required to contribute; or (c) any
other plan with respect to which the Borrower or any Related Company has
incurred liability which has not yet been satisfied or may incur
liability, including contingent liability, under Title IV of ERISA,
either to such plan or to the PBGC.
"Pre-Petition Letters of Credit" has the meaning set forth in
the recitals to this Agreement.
"Pre-Petition Loan Agreement" has the meaning set forth in the
recitals to this Agreement.
"Pre-Petition Loan Documents" means the Pre-Petition Loan
Agreement and all agreements, documents and instruments executed and/or
delivered by any Loan Party in favor of BankAmerica in connection
therewith.
"Pre-Petition Revolving Loans" has the meaning set forth in
the recitals to this Agreement.
"Priority Professional Expenses" means those fees and expenses
entitled to a priority as set forth in clause (ii) of the clause "first"
of the definition of the term "Agreed Administrative Expense Claim
Priorities."
"Proceeds" means all products and proceeds of any Property,
and all proceeds of such proceeds and products, including, without
limitation, all cash and credit balances, all payments under any
indemnity, warranty, or guaranty payable with respect to any Property,
all awards for taking by eminent domain, all proceeds of fire or other
insurance, and all money and other Property obtained as a result of any
claims against third parties or any legal action or proceeding with
respect to Property.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Proprietary Rights" means all of any Loan Party's now owned
and hereafter arising or acquired United States: licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject
matter of copyrights, trademarks, trade names, trade styles, patent and
trademark applications and licenses and rights thereunder, including
without limitation those patents, trademarks and filed copyrights set
forth in Schedule 8.11 hereto, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations,
and continuations-in-part of any of the foregoing, and all rights to xxx
for past, present, and future infringement of any of the foregoing;
inventions, trade secrets, formulae, processes, compounds, drawings,
designs, blueprints, surveys, reports, manuals, and operating standards;
goodwill; customer and other lists in whatever form maintained; and
trade secret rights, copyright rights, rights in works of authorship,
and contract rights relating to computer software programs, in whatever
form created or maintained.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage) the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of all of
the Lenders' Commitments.
"Public Authority" means the government of any country or
sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or any department, agency, public
corporation or other instrumentality of any of the foregoing.
"Receivables" means all of the Loan Parties' now owned and
hereafter arising or acquired: Accounts (whether or not earned by
performance), including Accounts owed to a Loan Party by any of its
Subsidiaries or Affiliates, together with all interest, late charges,
penalties, collection fees, and other sums which shall be due and
payable in connection with any Account; proceeds of any letters of
credit naming a Loan Party as beneficiary; contract rights, chattel
paper, instruments, documents, general intangibles (including without
limitation, choses in action, causes of action, tax refunds, tax refund
claims, Reversions and other amounts payable to a Loan Party from
pension and employee benefit plans, rights and claims against shippers
and carriers, rights to indemnification and business interruption
insurance), and all forms of obligations owing to a Loan Party
(including, without limitation, obligations owing to a Loan Party by its
Subsidiaries and Affiliates); guarantees and other security for any of
the foregoing; and rights of stoppage in transit, replevin, and
reclamation; and other rights or remedies of an unpaid vendor, lienor,
or secured party.
"Reference Rate" means the rate of interest publicly announced
from time to time by Bank of America National Trust and Savings
Association in San Francisco, California, as its reference rate. It is
a rate set by Bank of America National Trust and Savings Association
based upon various factors including the Bank of America National Trust
and Savings Association'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.
"Reference Rate Loan" means a Revolving Loan bearing interest
based on the Reference Rate in accordance with Article 2.
"Register" has the meaning specified in Section 13.3(c).
"Related Company" means any member of any controlled group of
corporations (as defined in Section 414 of the Code) of which the
Borrower is or was a part, or any trade or business (whether or not
incorporated) which together with the Borrower would be or would have
been treated as a single employer under Section 4001 of ERISA.
"Reportable Event" means a reportable event described in Sec-
tion 4043 of ERISA or the regulations thereunder (other than any event
as to which the thirty (30) day notice has been waived by such
regulations), a withdrawal from a Plan described in Section 4063 of
ERISA, or a cessation of operations described in Section 4062(e) of
ERISA.
"Restricted Investment" means any acquisition of Property by
any Loan Party or any of its Subsidiaries in exchange for cash or other
Property, whether in the form of an acquisition of stock, indebtedness
or other obligation, or by loan, advance, capital contribution, or
otherwise, except the following:
(a) Property to be used in the business of the Borrower and
its Subsidiaries and other investments existing on the Closing Date
as reflected in the Financial Statements of the Parent and its
Subsidiaries referred to in Section 8.6(b);
(b) current assets arising from the sale or lease of goods or
rendition of services in the ordinary course of business of the
Parent and its Subsidiaries;
(c) if no Revolving Loans are outstanding at the time of the
acquisition and no Event or Event of Default has occurred and is
continuing, direct obligations of the United States of America, or
any agency thereof, or obligations guaranteed by the United States
of America, provided that such obligations mature within one year
from the date of acquisition thereof;
(d) if no Revolving Loans are outstanding at the time of the
acquisition and No Event or Event of Default has occurred and is
continuing, certificates of deposit maturing within one year from
the date of acquisition, bankers acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the
laws of the United States or any state thereof having capital and
surplus aggregating at least $100,000,000;
(e) if no Revolving Loans are outstanding at the time of the
acquisition, and no Event or Event of Default has occurred and is
continuing, commercial paper given the highest rating by a national
credit rating agency and maturing not more than 270 days from the
date of creation thereof; and
(f) loans made by a Borrower or any Subsidiary to a Borrower
or another Subsidiary permitted under Section 9.10(g) or Section
9.10(h).
Retirement Plan means any Plan which is intended to qualify
under Section 401(a) of the Code, other than a Multiemployer Plan.
"Reversions" means any funds which may become due to the
Borrower in connection with the termination of any Plan or other
employee benefit plan.
"Revolving Loans" has the meaning specified in Section 2.2(a).
"Settlement" has the meaning set forth in Section 2.2(h).
"Settlement Date" has the meaning set forth in Section 2.2(h).
"Subsidiary" means any present or future corporation of which
the Borrower owns, directly or indirectly, more than 50% of the voting
stock (other than voting stock which has voting rights only by reason of
the happening of a contingency).
"Termination Date" means the date on which the Commitments of
the Lenders expire which (unless extended by mutual agreement of the
Agent, all the Lenders and the Borrower) shall be the earliest to occur
of (i) November 9, 1997, (ii) November 11, 1995, unless the Interim
Bankruptcy Court Order Date has occurred on or prior to such date,
(iii) January 2, 1996, unless the Final Bankruptcy Court Order Date has
occurred on or prior to such date, (iv) the date of substantial
consummation (as defined in Section 1101(2) of the Bankruptcy Code) of a
plan of reorganization in the Chapter 11 Case that has been confirmed by
an order of the Bankruptcy Court which contains provisions in form and
substance satisfactory to the Agent and the Majority Lenders regarding
the repayment of the Obligations and the protection of the right of the
Agent and the Lenders to receive payment of the Obligations and (v) the
date of termination of this Agreement or the Commitments of the Lenders
(including, without limitation, by virtue of an exercise of remedies by
the Agent or the Majority Lenders pursuant to Section 11.2).
"Termination Event" means: (a) a Reportable Event; or (b) the
withdrawal of the Borrower or any Related Company from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or (c) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA; or (d) the institution of proceedings by
the PBGC to terminate or have a trustee appointed to administer a Plan;
(e) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or (f) the partial or complete
withdrawal of the Borrower or any Related Company from a Multiemployer
Plan.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of New York or of any other state the laws of
which are required by Section 9-103 thereof to be applied in connection
with the issue of perfection of security interests.
"Unused Letter of Credit Subfacility" means an amount equal to
$150,000,000 ($75,000,000 prior to the Final Bankruptcy Court Order
Date) minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit plus (b) the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"United States" means the United States of America.
1.2 Accounting Terms. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the
meaning customarily given in accordance with GAAP, and all financial
computations hereunder shall be computed, unless otherwise specifically
provided herein, in accordance with GAAP as consistently applied and
using the same method for inventory valuation as used in the preparation
of the Financial Statements.
1.3 Other Terms. All other undefined terms contained in
this Agreement shall, unless the context indicates otherwise, have the
meanings provided for by the UCC to the extent the same are used or
defined therein. Wherever appropriate in the context, terms used herein
in the singular also include the plural, and vice versa, and each
masculine, feminine, or neuter pronoun shall also include the other
genders.
2. LOANS.
2.1 Facility. Subject to the terms and conditions of this
Agreement and the Interim Bankruptcy Court Order and the Final
Bankruptcy Court Order, the Lenders severally agree to make available up
to a $200,000,000 total credit facility (the "Facility") for the
Borrower's use from time to time through but not including the
Termination Date; provided, however, that at all times prior to the
Final Bankruptcy Court Order Date, the maximum amount of the Facility
shall be $100,000,000. The Facility shall be comprised of a revolving
line of credit up to the limits of the Availability, consisting of
Revolving Loans and Letters of Credit as described in Sections 2.2 and
2.2A.
2.2 Revolving Loans.
(a) Amounts. Subject to all the terms and conditions of
this Agreement and the Interim Bankruptcy Court Order and the Final
Bankruptcy Court Order, and in the absence of an Event or Event of
Default (either before or after giving effect to the relevant Revolving
Loan), each Lender severally agrees to make revolving loans (the
"Revolving Loans") to a Borrower until, but not including the
Termination Date, upon such Borrower's request from time to time in
accordance with Section 2.2(b), in an amount not to exceed, in the
aggregate at any time outstanding, the lesser of (i) such Lender's
Commitment and (ii) such Lender's Pro Rata Share of the Availability.
No Revolving Loan shall be made if the amount of such Revolving Loan
would exceed the Availability at such time. The Lenders, however, in
their discretion, may elect to make Revolving Loans in excess of the
Availability on one or more occasions, but if they do so, neither the
Agent nor the Lenders shall be deemed thereby to have changed the limits
of the Availability or to be obligated to exceed such limits on any
other occasion. Without intending to limit the discretion of the Agent
or any Lender with respect to Revolving Loans, if at any time the unpaid
balance of the Revolving Loans giving effect to the requested Revolving
Loan exceeds the Availability (with the Availability determined as if
the amount of the outstanding Revolving Loans were zero), then the
Lenders, or any of them, may refuse to make or may otherwise restrict
the making of Revolving Loans on such terms as the Lenders, or such
Lender, may determine until such excess has been eliminated. Each
borrowing hereunder shall consist of the same type of Revolving Loans
which shall, at the option of the Borrower (but subject to the
provisions of this Agreement), be either Reference Rate Loans or
Eurodollar Rate Loans, as specified by the Borrower in the Notice of
Borrowing requesting same.
(b) Notice of Borrowing or Conversion. (i) Whenever a
Borrower desires to borrow or convert any Revolving Loan pursuant to
this Section 2.2, it shall deliver to the Agent written notice of such
proposed borrowing or conversion (a "Notice of Borrowing" or "Notice of
Conversion," as the case may be), signed by an authorized officer of the
Borrower, each such notice to be given (a) prior to 1:00 p.m. (New York
City time) on the funding date of such proposed borrowing or conversion,
in the case of a borrowing of Reference Rate Loans or a conversion of
Eurodollar Rate Loans into Reference Rate Loans or (b) prior to 12:00
Noon (New York City time) on the third Business Day prior to the funding
date of such proposed borrowing or conversion, in the case of a
borrowing of Eurodollar Rate Loans or a conversion of Reference Rate
Loans into Eurodollar Rate Loans. Each such notice shall be in the form
attached hereto as Exhibit F or Exhibit G, as the case may be. No more
than five (5) Eurodollar Rate Loans may be outstanding hereunder at any
time. In lieu of delivering the above-described Notice of Borrowing or
Notice of Conversion, as the case may be, the Borrower may give the
Agent telephonic notice of any requested borrowing by the required time;
provided, however, that such notice shall be confirmed in writing by
delivery to the Agent (A) immediately of a telecopy of a Notice of
Borrowing or Notice of Conversion, as the case may be, which has been
signed by an authorized officer of the Borrower and (B) promptly (and in
no event later than three (3) Business Days after the funding date of
the applicable Revolving Loans) of a Notice of Borrowing or Notice of
Conversion, as the case may be, containing the original signature of an
authorized officer of the Borrower. In the event that the terms of any
confirmatory Notice of Borrowing or Notice of Conversion, as the case
may be, referred to in the proviso contained in the immediately
preceding sentence shall conflict with the telephonic notice with
respect to which it was delivered, the terms of such telephonic notice
shall govern. Notwithstanding anything in this Section 2.2(b) to the
contrary, any Revolving Loans to be made to the Borrower on the Closing
Date shall initially be Reference Rate Loans.
(ii) The Borrower shall notify the Agent in writing of
the names of the officers authorized to request Revolving Loans on
behalf of the Borrower, and shall provide the Agent with a specimen
signature of each such officer. The Agent shall be entitled to rely
conclusively on such officer's authority to request Revolving Loans on
behalf of the Borrower, the proceeds of which are requested to be
transferred to an account of the Borrower reasonably acceptable to the
Agent or issued for the account of the Borrower, until the Agent
receives written notice to the contrary. The Agent shall have no duty
to verify the authenticity of the signature appearing on any Notice of
Borrowing or Notice of Conversion and, with respect to a telephonic
request for Revolving Loans, the Agent shall have no duty to verify the
identity of any individual representing himself as an authorized officer
of the Borrower.
(iii) Neither the Agent nor any of the Lenders shall
incur any liability to the Borrower as a result of acting upon any
telephonic notice referred to in this Section 2.2(b) which notice the
Agent believes in good faith to have been given by a duly authorized
officer of the Borrower or for otherwise acting in good faith under this
Section 2.2(b), and, upon the funding of any Revolving Loans by the
Lenders in accordance with this Agreement, pursuant to any such
telephonic notice, the Borrower shall be deemed to have made a borrowing
of such Revolving Loans hereunder.
(iv) Any Notice of Borrowing or Notice of Conversion
(or telephonic notice in lieu thereof) made pursuant to this Section
2.2(b) shall be irrevocable.
(v) Unless otherwise specified in a Notice of
Borrowing, each Revolving Loan shall be made as a Reference Rate Loan.
If a timely Notice of Borrowing or Notice of Conversion is not received
from the Borrower prior to the expiration of any Interest Period for any
outstanding Eurodollar Rate Loan, such Eurodollar Loan (unless repaid or
required to be repaid pursuant to the terms hereof) shall automatically
be converted into a Reference Rate Loan on the last day of the
applicable Interest Period.
(vi) Subject to the requirements set forth in the
proviso to the definition of "Interest Period", the Interest Period
applicable to any Eurodollar Rate Loan shall be specified by the
Borrower in the applicable Notice of Borrowing or Notice of Conversion,
as the case may be. If the Borrower fails to so specify an Interest
Period in any such notice, the Borrower shall be deemed to have selected
an Interest Period of thirty (30) days duration.
(vii) Notwithstanding anything else to the contrary
contained herein:
(A) accrued interest on any Revolving Loan (or portion
thereof) being converted shall be paid by the Borrower at the time
of such conversion;
(B) no Eurodollar Rate Loan or portion thereof may be
converted to a Reference Rate Loan other than at the end of the
Interest Period applicable thereto;
(C) any Eurodollar Rate Loan that has an Interest Period
ending on a date that is less than thirty (30) days prior to the
last day of the scheduled term of this Agreement shall
automatically be converted at the end of such Interest Period into
a Reference Rate Loan; and
(D) no Eurodollar Rate Loan may be borrowed during the
continuance of an Event or Event of Default.
(c) Integral Multiples for Revolving Loans. Each Revolving
Loan that is a Eurodollar Rate Loan shall be in an aggregate principal
amount of not less than $5,000,000 and in integral multiples of
$1,000,000 in excess thereof. There shall be no minimum amount for
Revolving Loans which are Reference Rate Loans.
(d) Agent's Election. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(b) (or telecopy or telex notice in
lieu thereof) the Agent shall elect, in its discretion, (i) to have the
terms of Section 2.2(e) apply to such requested borrowing, or (ii) to
request BankAmerica to make a BankAmerica Revolving Loan pursuant to the
terms of Section 2.2(f) in the amount of the requested borrowing;
provided, however, that if BankAmerica declines in its sole discretion
to make a BankAmerica Revolving Loan pursuant to Section 2.2(f), the
terms of Section 2.2(e) shall apply to such requested Borrowing.
(e) Making of Revolving Loans. (i) Except with respect to
Revolving Loans that constitute BankAmerica Revolving Loans, promptly
after receipt of a Notice of Borrowing pursuant to Section 2.2(b) (or
telecopy or telex notice in lieu thereof) the Agent shall notify the
Lenders of the requested borrowing by telex, telecopy, telegram,
telephone or other similar form of transmission. Each Lender shall make
the amount of such Lender's Pro Rata Share of the requested borrowing
available to the Agent in same day funds, to such account of the Agent
as the Agent may designate, not later than 3:00 p.m. (New York City
time) on the date that the Revolving Loans are to be made. After the
Agent's receipt of the proceeds of such Revolving Loans, upon
satisfaction of the applicable conditions precedent set forth in Article
10, the Agent shall make the proceeds of such Revolving Loans available
to the Borrower on the date that the requested Revolving Loans are to be
made by transferring same day funds equal to the proceeds of all such
Revolving Loans received by the Agent to an account of the Borrower,
designated in writing by the Borrower.
(ii) The Agent shall be entitled to assume that each
Lender has made the amount of such Lender's Revolving Loans available to
the Agent on each date that a Revolving Loan (other than a BankAmerica
Revolving Loan) is made to the Borrower unless such Lender shall have
notified the Agent in writing (which may be by telecopy) to the contrary
prior to 2:00 P.M. (New York City time) on such date. The Agent, in its
sole discretion, based upon such assumption, may make available to the
Borrower a corresponding amount on such date. If such amount had not in
fact been made available to the Agent by any Lender, such Lender and the
Borrower severally agree to repay to the Agent forthwith, on demand,
such amount, together with interest thereon for each day during the
period commencing on the date such amount is made available to the
Borrower and ending on the date such amount is repaid to the Agent, at
(1) in the case of the Borrower, the interest rate applicable to
Revolving Loans made on such date, and (2) in the case of a Lender, the
Federal Funds Rate. If such Lender repays to the Agent such
corresponding amount, such amount so repaid shall constitute a Revolving
Loan, and if both such Lender and the Borrower shall have repaid such
amount, the Agent shall promptly return to the Borrower such
corresponding amount in same day funds. Nothing in this Section
2.2(e)(ii) shall be deemed to relieve any Lender of its obligation, if
any, hereunder to make any Revolving Loan.
(f) Making of BankAmerica Revolving Loans. In the event the
Agent shall elect, with the consent of BankAmerica, to have the terms of
this Section 2.2(f) apply to a requested borrowing as described in
Section 2.2(d), BankAmerica shall make a Revolving Loan in the amount of
such borrowing (any such Revolving Loan made solely by BankAmerica
pursuant to this Section 2.2(f) being referred to as a "BankAmerica
Revolving Loan" and such Revolving Loans being referred to collectively
as "BankAmerica Revolving Loans") available to the Borrower on the date
of the proposed borrowing by transferring same day funds to an account
of the Borrower designated in writing by the Borrower and reasonably
acceptable to the Agent on the date of the proposed borrowing. Each
BankAmerica Revolving Loan shall be a Reference Rate Loan and shall be
subject to all the terms and conditions applicable to other Revolving
Loans (including, without limitation, with respect to the payment of
interest) except that all payments thereon shall be payable to
BankAmerica solely for its own account (and for the account of any
participation interests with respect to such Revolving Loan created
pursuant to clause (ii) of Section 2.2(h)). BankAmerica shall have no
duty to make any BankAmerica Revolving Loan, and the Agent shall not
request BankAmerica to make a BankAmerica Revolving Loan if the
requested borrowing would exceed the amount of the Availability on the
date of the proposed borrowing, or if the Agent shall have received
written notice from any Lender that one or more of the applicable
conditions precedent set forth in Article 10 will not be satisfied on
the date of the proposed borrowing for the applicable Borrowing.
BankAmerica shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Article 10 have been
satisfied or the requested borrowing would exceed the amount of the
unused Facility on the date of the proposed borrowing applicable thereto
prior to the making, in its sole discretion, any BankAmerica Revolving
Loan.
(g) Agent Advances. (i) Subject to the limitations set
forth in the provisos contained in this Section 2.2(g)(i) and
notwithstanding the provisions of Section 10.2 to the contrary, the
Agent is hereby authorized by the Borrower and the Lenders, from time to
time in the Agent's sole and absolute discretion, (1) after the
occurrence of an Event or an Event of Default, or (2) at any time that
any of the other applicable conditions precedent set forth in Article 10
have not been satisfied, to make Revolving Loans to the Borrower on
behalf of the Lenders which the Agent, in its reasonable business
judgment, deems necessary or desirable (A) to enhance the likelihood of,
or maximize the amount of, repayment of the Loans and other Obligations,
or (B) to pay any other amount chargeable to the Borrower pursuant to
the terms of this Agreement, including, without limitation, costs, fees
and expenses as described in Section 15.8 (any of the advances described
in this Section 2.2(g)(i) being hereinafter referred to as "Agent
Advances"); provided, that the Agent shall not make any Agent Advance if
the amount thereof would exceed the amount of the Availability on the
date of the proposed borrowing; and provided, further, that the Majority
Lenders may at any time revoke the Agent's authorization contained in
this Section 2.2(g)(i) to make Agent Advances, any such revocation to be
in writing and to become effective upon the Agent's receipt thereof.
(ii) The Agent Advances shall be repayable on demand,
shall constitute Reference Rate Loans and shall be subject to all the
terms and conditions applicable to other Revolving Loans (including,
without limitation, with respect to the payment of interest) except that
all payments thereon shall be payable to the Agent solely for its own
account (and for the account of any participation interests with respect
to such Revolving Loan created pursuant to clause (ii) of Section
2.2(h)).
(h) Settlement. (i) The Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a more frequent
basis if so determined by the Agent, (1) on behalf of BankAmerica, with
respect to each outstanding BankAmerica Revolving Loan, and (2) for
itself, with respect to each outstanding Agent Advance by notifying such
other Lenders by telex, telecopy, telegram, telephone or other similar
form of transmission, of such requested Settlement, no later than
11:00 A.M. (New York City time) on the date of such requested Settlement
(the "Settlement Date"). Each such Lender shall make the amount of such
Lender's Pro Rata Share of the outstanding principal amount of Revolving
Loans deemed made pursuant to Section 4.2(b), BankAmerica Revolving
Loans and Agent Advances with respect to which Settlement is requested
available to the Agent, for itself or for the account of BankAmerica, as
applicable, in same day funds, to such account of the Agent as the Agent
may designate, not later than 12:00 Noon (New York City time) on the
Settlement Date applicable thereto, regardless of whether the applicable
conditions precedent set forth in Article 10 have then been satisfied.
Such amounts made available to the Agent shall be applied against the
amount of the applicable BankAmerica Revolving Loan or Agent Advance
and, together with the portion of such BankAmerica Revolving Loan or
Agent Advance representing BankAmerica's Pro Rata Share thereof, shall
constitute Revolving Loans of such Lenders. If any such amount is not
made available to the Agent by any Lender on the Settlement Date
applicable thereto, the Agent shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after the Settlement
Date and thereafter at the interest rate applicable to the Revolving
Loans.
(ii) Notwithstanding the foregoing, not more than one
(1) Business Day after demand is made by the Agent (whether before or
after the occurrence of an Event or an Event of Default and regardless
of whether the Agent has requested a Settlement with respect to any
Revolving Loans deemed made pursuant to Section 4.2(b), BankAmerica
Revolving Loans or Agent Advances), each other Lender shall irrevocably
and unconditionally purchase and receive from BankAmerica or the Agent,
as applicable, without recourse or warranty, an undivided interest and
participation in such Revolving Loan, BankAmerica Revolving Loan or
Agent Advance to the extent of such other Lender's Pro Rata Share
thereof by paying to the Agent, in same day funds, an amount equal to
such Lender's Pro Rata Share of such BankAmerica Revolving Loan or Agent
Advance. If such amount is not in fact made available to the Agent by
any Lender, the Agent shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after such demand and
thereafter at the interest rate applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any
Lender purchases an undivided interest and participation in any
Revolving Loans deemed made pursuant to Section 4.2(b), BankAmerica
Revolving Loans or Agent Advances pursuant to subsection (ii) above, the
Agent shall promptly distribute to such Lender at such address as such
Lender may request in writing, such Lender's Pro Rata Share of all
payments of principal and interest and all proceeds of Property received
by the Agent in respect of such Revolving Loans, BankAmerica Revolving
Loans or Agent Advances.
(i) Notation. The Agent shall record in the Register the
principal amount of the Revolving Loans owing to each Lender, including
BankAmerica Revolving Loans owing to BankAmerica, and the Agent Advances
owing to the Agent from time to time. In addition, each Lender is
authorized, at such Lender's option, to note the date and amount of each
payment or prepayment of principal of such Lender's Revolving Loans in
its books and records, including computer records, such books and
records constituting rebuttably presumptive evidence, absent manifest
error, of the accuracy of the information contained therein.
2.2A Letters of Credit.
(a) Agreement to Cause Issuance. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations
and warranties of the Borrower herein set forth, the Agent agrees to
take reasonable steps to cause to be issued for the account of the
Borrower and to provide credit support or other enhancement in
connection with one or more standby letters of credit and/or documentary
letters of credit (each such letter of credit, a "Letter of Credit" and
such letters of credit, collectively, the "Letters of Credit") in
accordance with this Section 2.2A from time to time during the term of
this Agreement. The Agent shall select the issuing bank with respect to
Letters of Credit, subject to the approval of the Parent (which shall
not be unreasonably withheld).
(b) Amounts; Outside Expiration Date. The Agent shall not
have any obligation to take steps to cause to be issued any Letter of
Credit at any time: (1) if the maximum face amount of the requested
Letter of Credit, plus the aggregate undrawn amount of all outstanding
Letters of Credit and the aggregate amount of unreimbursed drawings
under Letters of Credit to the extent not included in the Revolving
Loans, would exceed $150,000,000 (or, at all times prior to the Final
Bankruptcy Court Order Date, $75,000,000); or (2) if the maximum face
amount of the requested Letter of Credit, and all commissions, fees, and
charges due from the Borrower to the Agent in connection with the
opening thereof exceed the Availability at such time, or (3) which has
an expiration date later than the last day of the scheduled term of this
Agreement or which has an expiration date later than 270 days (with
respect to merchandise Letters of Credit) from the date of issuance or
later than one year (with respect to standby Letters of Credit) from the
date of issuance.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in
Article 10, the obligation of the Agent to take reasonable steps to
cause to be issued any Letter of Credit is subject to the following
conditions precedent having been satisfied in a manner satisfactory to
the Agent:
(1) The Borrower shall have delivered to the proposed
issuer of such Letter of Credit, at such times and in such manner as
such proposed issuer may prescribe, an application in form and substance
satisfactory to such proposed issuer for the issuance of the Letter of
Credit and such other documents as may be required pursuant to the terms
thereof, and the form and terms of the proposed Letter of Credit shall
be satisfactory to the Agent and such proposed issuer; and
(2) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain money center banks generally from issuing letters of
credit of the type and in the amount of the proposed Letter of Credit,
and no law, rule or regulation applicable to money center banks
generally and no request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over money
center banks generally shall prohibit, or request that the proposed
issuer of such Letter of Credit refrain from, the issuance of letters of
credit generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrower shall give the
Agent one (1) Business Day's prior written notice (or, in the event that
BankAmerica or an Affiliate thereof is not the issuing bank, such notice
as shall be required by such issuing bank), containing the original
signature of an authorized officer of the Borrower of the Borrower's
request for the issuance of a Letter of Credit. Such notice shall be
irrevocable and shall specify the original face amount of the Letter of
Credit requested, the effective date (which date shall be a Business
Day) of issuance of such requested Letter of Credit, whether such Letter
of Credit may be drawn in a single or in partial draws, the date on
which such requested Letter of Credit is to expire (which date shall be
a Business Day), the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit. The
Borrower shall attach to such notice the proposed form of the Letter of
Credit that the Agent is requested to cause to be issued.
(2) Responsibilities of the Agent; Issuance. The
Agent shall determine, as of the Business Day immediately preceding the
requested effective date of issuance of the Letter of Credit set forth
in the notice from the Borrower pursuant to Section 2.2A(d)(1), (i) the
amount of the applicable Unused Letter of Credit Subfacility and
(ii) the Availability of the Borrower as of such date. If (i) the
undrawn amount of the requested Letter of Credit is not greater than the
applicable Unused Letter of Credit Subfacility and (ii) the issuance of
such requested Letter of Credit and all commissions, fees, and charges
due from the Borrower in connection with the opening thereof would not
exceed the Availability of the Borrower, the Agent shall take reasonable
steps to cause such issuer to issue the requested Letter of Credit on
such requested effective date of issuance.
(3) Notice of Issuance. Promptly after the issuance
of any Letter of Credit, the Agent shall give notice to each Lender of
the issuance of such Letter of Credit.
(4) No Extensions or Amendment. The Agent shall not
be obligated to cause any Letter of Credit to be extended or amended
unless the requirements of this Section 2.2A(d) are met as though a new
Letter of Credit were being requested and issued. With respect to any
Letter of Credit which contains any "evergreen" or automatic renewal
provision, each Lender shall be deemed to have consented to any such
extension or renewal unless any such Lender shall have provided to the
Agent, not less than 30 days prior to the last date on which the
applicable issuer can in accordance with the terms of the applicable
Letter of Credit decline to extend or renew such Letter of Credit,
written notice that it declines to consent to any such extension or
renewal, provided, that if all of the requirements of this Section 2.2A
are met, no Lender shall decline to consent to any such extension or
renewal.
(e) Payments Pursuant to Letters of Credit.
(1) Payment of Letter of Credit Obligations. The
Borrower agrees to reimburse the issuer for any draw under any Letter of
Credit immediately upon demand, and to pay the issuer of the Letter of
Credit the amount of all other obligations and other amounts payable to
such issuer under or in connection with any Letter of Credit immediately
when due, irrespective of any claim, setoff, defense or other right
which the Borrower may have at any time against such issuer or any other
Person.
(2) Revolving Loans to Satisfy Reimbursement
Obligations. In the event that the issuer of any Letter of Credit
honors a draw under such Letter of Credit and the Borrower shall not
have repaid such amount to the issuer of such Letter of Credit pursuant
to Section 2.2A(e)(1), the Agent shall, upon receiving notice of such
failure, notify each Lender of such failure, and each Lender shall
unconditionally pay to the Agent, for the account of such issuer, as and
when provided hereinbelow, an amount equal to such Lender's Pro Rata
Share of the amount of such payment in Dollars and in same day funds.
If the Agent so notifies the Lenders prior to 1:00 p.m. (New York time)
on any Business Day, each Lender shall make available to the Agent the
amount of such payment, as provided in the immediately preceding
sentence, on such Business Day. Such amounts paid by the Lenders to the
Agent shall constitute Revolving Loans which shall be deemed to have
been requested by the Borrower pursuant to Section 2.2 as set forth in
Section 4.2(b).
(f) Participations.
(1) Purchase of Participations. Immediately upon
issuance of any Letter of Credit in accordance with Section 2.2A(d),
each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided
interest and participation in the credit support or enhancement provided
through the Agent to such issuer in connection with the issuance of such
Letter of Credit, equal to such Lender's Pro Rata Share of the face
amount of such Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto, and any security
therefor or guaranty pertaining thereto).
(2) Sharing of Reimbursement Obligation Payments.
Whenever the Agent receives a payment from the Borrower on account of
reimbursement obligations in respect of a Letter of Credit as to which
the Agent has previously received for the account of the issuer thereof
payment from a Lender pursuant to Section 2.2A(e)(2), the Agent shall
promptly pay to such Lender such Lender's Pro Rata Share of such payment
from the Borrower in Dollars. Each such payment shall be made by the
Agent on the Business Day on which the Agent receives immediately
available funds paid to such Person pursuant to the immediately
preceding sentence, if received prior to 3:00 p.m. (New York time) on
such Business Day and otherwise on the next succeeding Business Day.
(3) Documentation. Upon the request of any Lender,
the Agent shall furnish to such Lender copies of any Letter of Credit,
reimbursement agreements executed in connection therewith, application
for any Letter of Credit and credit support or enhancement provided
through the Agent in connection with the issuance of any Letter of
Credit, and such other documentation as may reasonably by requested by
such Lender.
(4) Obligations Irrevocable. The obligations of each
Lender to make payments to the Agent with respect to any Letter of
Credit or with respect to any credit support or enhancement provided
through the Agent with respect to a Letter of Credit, and the
obligations of the Borrower to make payments to the Agent, for the
account of the Lenders, shall be irrevocable, not subject to any
qualification or exception whatsoever, including, without limitation,
any of the following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense
or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting),
any Lender, the Agent, the issuer of such Letter of Credit, or any other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower or any other
Person and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect (provided that the
foregoing does not release the issuer from claims arising out of the
issuer's willful misconduct);
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Event or Event of
Default.
(g) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrower received by the Agent with
respect to any Letter of Credit (or any guaranty by the Borrower or
reimbursement obligation of the Borrower relating thereto) and
distributed by the Agent to the Lenders on account of their respective
participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay
to the Agent their respective Pro Rata Shares of such amount set aside,
avoided or recovered, together with interest at the rate required to be
paid by the Agent upon the amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(1) Letter of Credit Fee. The Borrower agrees to pay
to the Agent with respect to each Letter of Credit, for the account of
the Lenders, the Letter of Credit Fee specified in, and in accordance
with the terms of, Section 3.6.
(2) Issuer Fees and Charges. The Borrower shall pay
to the issuer of any Letter of Credit, or to the Agent, for the account
of the issuer of any such Letter of Credit, solely for such issuer's
account, such fees and other charges as are charged by such issuer for
letters of credit issued by it, including, without limitation, its
standard fees for issuing, administering, amending, renewing, paying and
canceling letters of credit and all other fees associated with issuing
or servicing letters of credit, as and when assessed.
(i) Indemnification; Exoneration.
(1) Indemnification. In addition to amounts payable
as elsewhere provided in this Section 2.2A, the Borrower hereby agrees
to protect, indemnify, pay and save the Lenders and the Agent harmless
from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys'
fees) which any Lender or the Agent may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit
or the provision of any credit support or enhancement in connection
therewith.
(2) Assumption of Risk by the Borrower. As among the
Borrower, the Lenders and the Agent, the Borrower assumes all risks of
the acts and omissions of, or misuse of any of the Letters of Credit by,
the respective beneficiaries of such Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the
applications for the issuance of Letters of Credit, the Lenders and the
Agent shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the
Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any 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; (C) the failure of
the beneficiary of any Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit (provided that the
foregoing does not release the issuer from claims arising out of the
issuer's willful misconduct); (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or delay
in the transmission or otherwise of any document required in order make
a drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; or (H) any
consequences arising from causes beyond the control of the Lenders or
the Agent, including, without limitation, any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
Governmental Authority. None of the foregoing shall affect, impair or
prevent the vesting of any rights or powers of the Agent or any Lender
under this Section 2.2A(i).
(3) Exoneration. In furtherance and extension, and
not in limitation, of the specific provisions set forth above, any
action taken or omitted by the Agent or any Lender under or in
connection with any of the Letters of Credit or any related
certificates, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of
its obligations hereunder to any such Person.
(j) Cash Collateral. If, notwithstanding the provisions of
Section 2.2A(b), any Letter of Credit is outstanding upon the
termination of this Agreement, then upon such termination the Borrower
shall deposit with the Agent, for the ratable benefit of the Lenders,
with respect to each Letter of Credit then outstanding, cash in amounts
necessary to reimburse the Agent and the Lenders for payments made or to
be made by the Agent or the Lenders under such Letter of Credit or under
any credit support or enhancement provided through the Agent with
respect thereto. Such deposit of cash shall be held by the Agent, for
the ratable benefit of the Lenders, as security for, and to provide for
the payment of, the aggregate undrawn amount of such Letters of Credit
remaining outstanding.
(k) Pre-Petition Letters of Credit. Upon the Closing Date,
all Pre-Petition Letters of Credit shall constitute Letters of Credit
hereunder with the same effect and status as if such Letters of Credit
were originally issued pursuant to this Agreement. All fees payable
with respect to such Pre-Petition Letters of Credit accruing through the
Closing Date shall be paid on the Closing Date. Until the Closing Date
the Letter of Credit fees shall accrue and be payable at the rates set
forth in the Pre-Petition Loan Agreement and on and after the Closing
Date such fees shall accrue and be payable at the rates set forth
herein.
2.3 Lenders' Failure to Perform. All Revolving Loans (other
than Revolving Loans deemed made pursuant to Section 4.2, BankAmerica
Revolving Loans and Agent Advances) shall be made by each Lender
simultaneously and in accordance with their respective Pro Rata Shares.
It is understood that (a) no Lender shall be responsible for any failure
by any other Lender to perform its obligation to make any Revolving
Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, and (b) no failure by
any Lender to perform its obligation to make any Revolving Loans
hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder.
2.4 Funding Indemnities. The Borrower shall indemnify each
Lender against, and on demand reimburse each Lender for, any loss,
premium, penalty or expense which such Lender may pay or incur
(including, without limitation, any loss or expense incurred by reason
of the relending, depositing or other employment of funds acquired by
such Lender to fund a Eurodollar Rate Loan) as a result of (i) any
prepayment or repayment of a Eurodollar Rate Loan on a date prior to the
last day of the Interest Period applicable thereto or (ii) any failure
by the Borrower to borrow any Eurodollar Rate Loan on a date specified
therefor in a Notice of Borrowing, except to the extent such failure
results from a default by such Lender in making the requisite funds
available to the Borrower hereunder. Each Lender shall furnish the
Borrower with a certificate setting forth the basis for determining any
additional amount to be paid to it hereunder, and such certificate shall
be conclusive, absent manifest error, as to the contents thereof.
2.5 Illegality. (a) If, after the Closing Date, the
introduction of, or any change in, any applicable law, rule or
regulation or in the interpretation or administration thereof by any
governmental authority shall, in the opinion of counsel to any Lender,
make it unlawful for such Lender to make or maintain any Eurodollar Rate
Loan, then such Lender may, by notice to the Borrower and the Agent,
declare that such Eurodollar Rate Loan shall be due and payable. The
Borrower shall repay any Eurodollar Rate Loan declared so due and
payable in full on the last day of the Interest Period applicable
thereto, unless such Eurodollar Rate Loan is required by law to be
sooner repaid, in which case the Borrower shall repay such Eurodollar
Rate Loan on the date required by law. Repayment shall, in any case, be
made together with accrued interest and any additional amount owing
under 2.4. Each Lender will promptly notify the Borrower of any event
of which such Lender has knowledge which will entitle it to prepayment
pursuant to this Section 2.5(a) and will designate a different lending
office if, in the sole and absolute opinion of such Lender, such
designation will avoid the need for such prepayment and will not be
otherwise disadvantageous to such Lender or contrary to its internal
policies.
(b) If the Borrower is required as provided in Section
2.5(a) to prepay any Eurodollar Rate Loan prior to the last day of the
Interest Period applicable thereto, then concurrently with such
prepayment, the Borrower shall borrow from the affected Lender a
Reference Rate Loan in the amount of such prepayment. Such Reference
Rate Loan shall be considered to be part of the same borrowing as the
Eurodollar Rate Loan that was prepaid and the Borrower shall repay the
principal of and interest on such Reference Rate Loan at the same time
or times as required for the other Eurodollar Rate Loans comprising such
borrowing.
2.6 Unavailability of Eurodollar Rate Loans. If, with
respect to any Eurodollar Rate Loan requested by the Borrower, the Agent
or any Lender shall have determined in good faith (which determination
shall, save for manifest error, be conclusive and binding upon the
Borrower) that (a) deposits of sufficient amount and maturity for
funding such Eurodollar Rate Loan are not available to such Person in
the relevant market in the ordinary course of business or (b) by reason
of circumstances affecting the relevant market, adequate and fair means
do not exist for ascertaining the rate of interest to be applicable to
such Eurodollar Rate Loan, (i) the Agent or such Lender, as the case may
be, shall promptly give notice thereof to the Borrower, (ii) the notice
requesting such Eurodollar Rate Loan shall, unless the Borrower
otherwise notifies the Agent, automatically be amended to request a
Reference Rate Loan instead of a Eurodollar Rate Loan and (iii) no
Lender shall be under any obligation to make additional Eurodollar Rate
Loans to the Borrower unless and until the Agent shall have notified the
Borrower that Eurodollar Rate Loans are again available hereunder.
2.7 Increased Capital. If any Lender determines that
compliance with any law or regulation (other than those relating to
income taxes) or with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law)
applicable to banks organized under the laws of the United States of
America or any political subdivision thereof, has or would have the
effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with
reference to, such Lender's Commitment or its making or maintaining
Revolving Loans, below the rate which such Lender or such other
corporation could have achieved but for such compliance (taking into
account the policies of such Lender or such corporation with regard to
capital), then the Borrower shall, from time to time, upon demand by
such Lender (with a copy of such demand to the Agent), immediately pay
to such Lender or other corporation, an additional amount sufficient to
compensate such Lender or such other corporation for such reduction. A
certificate as to such amounts, submitted to the Borrower and the Agent
by such Lender shall, absent manifest error, be conclusive and binding
for all purposes. Each Lender agrees promptly to notify the Borrower
and the Agent of any circumstances that would cause the Borrower to pay
additional amounts pursuant to this Section 2.7; provided that the
failure to give such notice shall not affect the Borrower's obligations
to pay such additional amounts as otherwise provided herein.
2.8 Joint and Several Liability. The Borrower shall be
liable for all amounts due to the Agent and/or any Lender under this
Agreement, regardless of which Borrower actually receives Revolving
Loans or other extensions of credit hereunder or the amount of such
Revolving Loans received or the manner in which the Agent or any Lender
accounts for such Revolving Loans, Letters of Credit or other extensions
of credit on its books and records. The Borrower's Obligations with
respect to Revolving Loans made to it, and the Borrower's Obligations
arising as a result of the joint and several liability of the Borrower
hereunder, with respect to Revolving Loans made to the other Borrower
hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of the Borrower.
The Borrower's Obligations arising as a result of the joint
and several liability of the Borrower hereunder with respect to
Revolving Loans, Letters of Credit or other extensions of credit made to
the other Borrower hereunder shall, to the fullest extent permitted by
law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the
other Borrower or of any promissory note or other document evidencing
all or any part of the Obligations of the other Borrower, (ii) the
absence of any attempt to collect the Obligations from the other
Borrower, any other Guarantor, or any other security therefor, or the
absence of any other action to enforce the same, (iii) the waiver,
consent, extension, forbearance or granting of any indulgence by the
Agent or any Lender with respect to any provision of any instrument
evidencing the Obligations of the other Borrower, or any part thereof,
or any other agreement now or hereafter executed by the other Borrower
and delivered to the Agent or any Lender, (iv) the failure by the Agent
or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral
for the Obligations of the other Borrower, (v) any borrowing or grant or
a security interest by the other Borrower, as debtor-in-possession under
Section 364 of the Bankruptcy Code, (vi) the disallowance of all or any
portion of the Agent's or any Lender's claim(s) for the repayment of the
Obligations of the other Borrower under Section 502 of the Bankruptcy
Code, or (vii) any other circumstances which might constitute a legal or
equitable discharge or defense of a guarantor or of the other Borrower.
With respect to the Borrower's Obligations arising as a result of the
joint and several liability of the Borrower hereunder with respect to
Loans, Letters of Credit or other extensions of credit made to either of
the other Borrower hereunder, the Borrower waives, until the Obligations
shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy
which the Agent or any Lender now has or may hereafter have against the
Borrower, any endorser or any guarantor of all or any part of the
obligations, and any benefit of, and any right to participate in, any
security or collateral given to the Agent or any Lender to secure
payment of the Obligations or any other liability of the Borrower to the
Agent or any Lender. The Borrower consents and agrees that neither the
Agent nor any Lender shall be under any obligation to marshal any assets
in favor of the Borrower or against or in payment of any or all of the
Obligations.
3. INTEREST AND OTHER CHARGES.
3.1 Interest on Revolving Loans. (a) The Borrower shall
pay to the Agent, for the account of each Lender in accordance with its
Pro Rata Share, interest on the unpaid daily principal balance of each
Revolving Loan that constitutes a Reference Rate Loan at the close of
each day at a fluctuating per annum rate equal to one-quarter percent
(.25%) plus the Reference Rate. Each change in the Reference Rate shall
be reflected in the foregoing interest rates for Reference Rate Loans as
of the effective date of such change. The Borrower shall pay to the
Agent, for the account of each Lender in accordance with its Pro Rata
Share, interest on the unpaid daily principal balance of each Revolving
Loan that constitutes a Eurodollar Rate Loan at the close of each day at
a per annum rate equal to one and one-half percent (1.5%) plus the
Eurodollar Rate for such Eurodollar Rate Loan. Interest charges shall
be computed on the basis of a year of 360 days and actual days elapsed,
which results in more interest being paid than if computed on the basis
of a 365 day year. Interest will be payable on each applicable Interest
Payment Date and on the Termination Date. In addition, to the extent
permitted by applicable law, the Borrower shall pay to the Agent, for
the account of each Lender in accordance with its Pro Rata Share,
interest on all overdue interest at the rate specified in this
Section 3.1.
(b) If any Event of Default occurs, then, from the date such
Event of Default occurs until it is cured, or until all Obligations are
paid and performed in full, the Borrower agrees to pay (i) interest on
the unpaid principal balance of the Revolving Loans at a per annum rate
two percent (2%) greater than the rate(s) of interest otherwise
specified herein and (ii) a letter of credit fee on the outstanding
amount of undrawn and unreimbursed Letters of Credit at a per annum rate
two percent (2%) greater than the rate(s) of fees otherwise specified in
this Agreement.
3.2 Maximum Interest Rate. In no event shall the interest
rate and other charges hereunder exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that a court
determines that the Lenders have received interest and other charges
hereunder in excess of the highest rate applicable hereto, such excess
shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest and the
provisions hereof shall be deemed amended to provide for the highest
permissible rate. If there are no Obligations outstanding, the Lenders
shall refund to the Borrower such excess.
3.3 Facility Fee. The Borrower shall pay to the Agent on
the Closing Date a facility fee in the amount of $2,000,000.
3.4 Unused Line Fee. The Borrower shall pay to the Agent,
for the account of each Lender in accordance with its Pro Rata Share, on
the first Business Day of each month and on the Termination Date, a
commitment fee with respect to the Revolving Loans for the month or
shorter period just ended, computed at the rate of three-eighths percent
(.375%) per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) on an amount equal to (a) $200,000,000
($100,000,000 prior to Final Bankruptcy Court Order Date) less (b) the
sum of (i) average daily outstanding principal balance of the Revolving
Loans during such month or shorter period and (ii) the average daily
outstanding undrawn and unreimbursed amount of Letters of Credit during
such month or shorter period.
3.5 Administration Fee. The Borrower shall pay to the
Agent, for the sole account of the Agent, on the Closing Date and on
each anniversary of the Closing Date, an administration fee of $75,000.
3.6 Letter of Credit Fee. The Borrower agrees to pay to the
Agent, for the ratable account of the Lenders, for each Letter of
Credit, a fee (the "Letter of Credit Fee") equal to (x) one and one-half
percent (1.5%) per annum of the undrawn amount of each standby Letter of
Credit issued for the Borrower's account at the Borrower's request and
(y) one and one-quarter percent (1.25%) per annum of the undrawn amount
of each merchandise Letter of Credit issued for the Borrower's account
at the Borrower's request, plus all out-of-pocket costs, fees and
expenses incurred by the Agent in connection with the application for,
issuance of, or amendment to any Letter of Credit, which costs, fees and
expenses could include a "fronting fee" required to be paid by the Agent
to such issuer for the assumption of the settlement risk in connection
with the issuance of such Letter of Credit. The Letter of Credit Fee
shall be payable monthly in arrears, on the first day of each month
during which each such Letter of Credit remains outstanding. The Letter
of Credit Fee shall be computed on the basis of a 360-day year for the
actual number of days elapsed.
3.7 Field Examination Fees. The Borrower agrees to pay to
the Agent, solely for its own account, all costs and fees reasonably
incurred by the Agent's internal field examiners in connection with
field examinations of the Borrower and its Subsidiaries performed by
such field examiners during the term of this Agreement; provided, that
prior to the occurrence of an Event of Default, the Agent shall not be
entitled to reimbursement for any such costs and fees incurred in
connection with audits in excess of four (4) per year. Each field
examiner of the Agent shall be billed at the Agent s then customary rate
(currently $750 per day (or portion thereof)) plus reasonably incurred
out-of-pocket expenses (including travel expenses).
3.8 Fees Not Interest; Fully Earned. All fees are for
compensation for services and are not, and shall not be deemed to be,
interest or a charge for the use of money. The fees provided for in
Sections 3.3, 3.4, 3.5, 3.6 and 3.7 shall be fully earned when due and
payable, and no such fee shall be refundable or rebatable by reason of
any prepayment, acceleration upon an Event of Default or any other
circumstances.
4. PAYMENTS AND PREPAYMENTS.
4.1 Mandatory Payments and Prepayments; Apportionment of
Payments and Prepayments among the Agent and the Lenders. (a) On the
Termination Date, the Borrower shall pay to the Agent, for the account
of each Lender in accordance with its Pro Rata Share, the outstanding
principal balance of the Revolving Loans and all other Obligations, plus
all accrued but unpaid interest thereon. In addition, on demand the
Borrower shall pay to the Agent, for the account of each Lender in
accordance with its Pro Rata Share, the amount by which (A) the sum of
(x) the unpaid principal balance of the Revolving Loans at any time plus
(y) the amount, if any, of (1) amounts drawn under the Letters of Credit
at such time to the extent not already included in Revolving Loans and
(2) the undrawn amount of all Letters of Credit at such time exceeds (B)
the Availability at such time (with Availability determined as if the
amount of the Revolving Loans, the undrawn amount of Letters of Credit
and the amount of unreimbursed drawings under Letters of Credit were
zero).
(b) On each applicable Interest Payment Date until the
Termination Date, the Borrower shall pay to the Agent, for the account
of each Lender in accordance with its Pro Rata Share (but subject as to
distribution among the Lenders to the provisions of the Inter-Lender
Agreement), interest on each Revolving Loan (as determined under Section
3.1).
(c) The Borrower shall pay to the Agent, for distribution
among the Agent and/or the Lenders in accordance with the provisions of
this Agreement, all fees required to be paid from time to time hereunder
or under any Loan Documents as and when such fees are due and payable.
4.2 Manner, Time and Apportionment of Payments.
(a) Place and Form of Payments. All payments made hereunder
or under any Loan Document by or in respect of the Borrower shall be
made to the Agent. The Borrower shall give the Agent written notice of
each payment of principal, interest, fees, premiums and other sums
payable hereunder no later than 12:00 Noon (New York City time) on the
date such payment is to be made. Each such notice shall be irrevocable.
All payments of principal, interest, fees, premiums and other sums
payable hereunder to the Agent and/or any Lender shall be made without
condition or reservation of right and in same day funds and delivered to
the Agent not later than 12:00 Noon (New York City time) on the date due
to such account of the Agent as the Agent may designate, for the account
of the Agent and/or such Lender, as the case may be. Funds received by
the Agent after that time shall be deemed to have been paid on the next
succeeding Business Day. If any payment of principal, interest, fees,
premiums of other sums payable hereunder becomes due and payable on a
day other than a Business Day, the due date of such payment shall
(except, in the case of Eurodollar Rate Loans, as otherwise required by
virtue of the definition of "Interest Period") be extended to the next
succeeding Business Day and interest thereon shall be payable at the
applicable interest rate during such extension.
(b) Payments as Revolving Loans. The Borrower hereby
irrevocably authorizes the Agent to charge the Loan Account for the
purpose of paying principal, interest, amounts drawn under Letters of
Credit, fees, premiums and other sums payable hereunder, including,
without limitation reimbursing expenses pursuant to Section 2.2A, 6.14
or 15.8, and agrees that amounts so charged shall be deemed to
constitute Reference Rate Loans and that all such Reference Rate Loans
so made shall be deemed to have been requested by it pursuant to Section
2.2, as of the date such amounts are so charged.
(c) Application of Certain Payments. All payments made to
the Agent hereunder that do not constitute payments in respect of the
principal of or interest on Revolving Loans and do not constitute
payment of fees, and all proceeds of Accounts, Inventory or other assets
and/or Property of any Loan Party received by the Agent from or as
to the Borrower or any Guarantor, shall be applied, ratably, subject to
the provisions of this Agreement, first, to pay any fees, expense
reimbursements or indemnities then due to the Agent from the Borrower;
second, to pay any fees, expense reimbursements or indemnities then due
to the Lenders from the Borrower; third, to pay interest due in respect
of the BankAmerica Revolving Loans and Agent Advances; fourth, to pay
interest due in respect of the Revolving Loans (other than the
BankAmerica Revolving Loans and Agent Advances); fifth, to pay or prepay
principal of the Agent Advances; sixth, to pay or prepay principal of
the BankAmerica Revolving Loans; seventh, to pay or prepay principal of
Revolving Loans (other than the BankAmerica Revolving Loans and Agent
Advances); and eighth, to the payment of any other Obligation then due
as the Agent shall determine. The Agent shall promptly distribute to
each Lender at its address set forth on the appropriate signature page
hereof, or at such other address as such Lender may request in writing,
such funds as it may be entitled to receive. Notwithstanding anything
to the contrary contained herein or elsewhere, all amounts distributed
by the Agent under this Agreement shall be subject to the provisions of
Section 4.2(d).
(d) Defaulting Lenders. Notwithstanding anything contained
in this Agreement to the contrary (including, without limitation, in
Section 2.2(h) or 4.2(c)), in the event that (i) the Agent would
otherwise be required under this Agreement to distribute any amount (a
"Distribution Amount") to a Defaulting Lender, the Agent shall, to the
extent of all amounts then due and owing by such Defaulting Lender to
the Agent or BankAmerica (a "Defaulted Amount"), distribute such
Distribution Amount to the party or parties to which such Defaulted
Amount is due and owing for application to such Defaulted Amount, or
(ii) the Agent would otherwise be required under this Agreement to
distribute any Distribution Amount to a Defaulting Lender and at such
time there is no Defaulted Amount of such Defaulting Lender, or the
Borrower would otherwise be required to make a payment under the Loan
Documents for the account of a Defaulting Lender (whether or not there
is a Defaulted Amount of such Defaulting Lender), the Agent shall hold
in escrow or the Borrower shall deliver to the Agent to be held by the
Agent in escrow, as the case may be, such Distribution Amount or payment
and, as and when any Defaulted Amount becomes due and owing to any party
or parties the Agent shall distribute such escrowed amount to such party
or parties for application to such Defaulted Amount (and if such
escrowed amount is less than such Defaulted Amount, shall apply and
distribute such escrow in the same priorities as set forth in clauses
"first" through "seventh" of Section 4.2(c) (provided that in
determining such priorities, such Defaulting Lender shall be deemed not
to be a Lender under such clauses)) and prior to making any such
application the Agent shall deposit such escrowed amounts in an interest
bearing deposit account in the name and under the control of the Agent
(the Agent having no responsi-bility or liability for the collectibility
of any amounts so deposited), subject to the terms of this Section
4.2(d) and all earnings on such amounts so deposited shall be added to
such escrowed amount. No escrowed amounts shall be released to the
Lender which was such Defaulting Lender unless such Lender is no longer
a Defaulting Lender. To the extent that any Distribution Amount is paid
to the Borrower in respect of a Revolving Loan with respect to which a
Defaulting Lender was in default, the distribution to the Borrower of
such Distribution Amount shall be treated as the making by such
Defaulting Lender of a portion of such Revolving Loan as of the date
such Distribution Amount is paid to the Borrower, provided that such
deemed portion shall be a Reference Rate Loan, until conversion, if any,
to a Eurodollar Rate Loan in accordance with this Agreement.
4.3 Indemnity for Returned Payments. If after receipt of
the payment of, all or any part of the Obligations, the Agent or any
Lender is compelled to surrender such payment to any Person, because
such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for
any other reason, then the Obligations or part thereof intended to be
satisfied shall be revived and continue and this Agreement shall
continue in full force as if such payment or proceeds had not been
received by the Agent or such Lender and the Borrower shall be liable to
pay to the Agent or such Lender, and hereby indemnifies the Agent or
such Lender and holds the Agent or such Lender harmless for, the amount
of such payment or proceeds surrendered. The provisions of this Section
4.3 shall be and remain effective notwithstanding any contrary action
which may have been taken by the Agent or such Lender in reliance upon
such payment or application of proceeds, and any such contrary action so
taken shall be without prejudice to the Agent's or such Lender's rights
under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and
irrevocable. The provisions of this Section 4.3 shall survive the
termination of this Agreement.
4.4 Application and Reversal of Payments. At all times
after and during the continuation of an Event or an Event of Default,
the Agent shall determine in its sole discretion the order and manner in
which Proceeds of Property and other payments that the Agent receives
are applied to the Revolving Loans, interest thereon, and the other
Obligations, and the Borrower hereby irrevocably waives the right to
direct the application of any payment or Proceeds. At all times after
and during the continuation of an Event or an Event of Default, the
Agent shall have the continuing and exclusive right to apply and reverse
and reapply any and all such Proceeds and payments to any portion of the
Obligations. At all times prior to an Event or an Event of Default,
Proceeds of Property and other payments that the Agent receives shall be
applied pursuant to Section 4.1 of this Agreement, with any excess to be
applied pursuant to the written instructions of Borrower (and in all
other instances, such excess is to be applied at the discretion of
Agent).
5. AGENT'S AND LENDERS' BOOKS AND RECORDS; MONTHLY
STATEMENTS.
The Borrower agrees that the Agent's books and records showing
the Obligations and the transactions pursuant to this Agreement and the
other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute prima facie proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory
note or other instrument. The Agent will provide to the Borrower a
monthly statement of the Revolving Loans, payments, and other
transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrower, absent manifest error,
and as an account stated (except for returned payments made as provided
in Section 4.2 and corrections of errors discovered by the Agent),
unless the Borrower notifies the Lenders in writing to the contrary
within thirty (30) days after such statement is delivered, sent or
mailed to the Borrower. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent may charge the Loan Account with
all customary fees, charges and expenses (including any increases in
such fees and charges which occur after the Closing Date) owing to or
incurred by the Agent in connection with the administration of this
Agreement, the Revolving Loans or the Loan Documents; provided, however,
that the Agent shall give Borrower notice of such charge. In the event
a timely written notice of objections is given by the Borrower, only the
items to which exception is expressly made will be considered to be
disputed by the Borrower.
6. SUPERPRIORITY.
6.1 Superpriority. (a) The Borrower and the Guarantors
each hereby agrees that the Obligations shall constitute allowed claims
in the Chapter 11 Case having priority over all administrative expense
claims and unsecured claims against the Borrower and/or any Guarantor
now existing or hereafter arising, of any kind or nature whatsoever,
including without limitation all administrative expense claims of the
kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code,
subject, as to priority, only to the Carve-Out Expenses, the
establishment of which "superpriority" shall have been approved and
authorized by the Bankruptcy Court.
(b) The administrative expense claim priority granted
pursuant to (a) above, this Agreement, the other Loan Documents, the
Interim Bankruptcy Court Order and the Final Bankruptcy Court Order
supplement each other, and the grants, priorities, rights and remedies
of the Lenders and the Agent hereunder and thereunder are cumulative.
In the event of a direct conflict between the Interim Bankruptcy Court
Order or the Final Bankruptcy Court Order, on the one hand, and any Loan
Document, on the other hand, the Interim Bankruptcy Court Order or the
Final Bankruptcy Court Order, as the case may be, shall control.
6.2 Protection of Superpriority. The administrative expense
claim priorities and other rights and remedies granted to the Agent and
the Lenders pursuant to this Agreement, the other Loan Documents, the
Interim Bankruptcy Court Order or the Final Bankruptcy Court Order
(specifically including but not limited to the existence of the
administrative expense claim priority provided herein and therein) shall
not be modified, altered or impaired in any manner by any other
financing or extension of credit or incurrence of debt by the Borrower
(pursuant to Section 364 of the Bankruptcy Code or otherwise), or by
dismissal or conversion of the Chapter 11 Case, or by any other act or
omission whatsoever. Without limiting the generality of the foregoing,
notwithstanding any such order, financing, extension, incurrence,
dismissal, conversion, act or omission except for Priority Professional
Expenses, no costs or expenses of administration which have been or may
be incurred in the Chapter 11 Case or any conversion of the same or in
any other proceedings related thereto, and no priority claims, are or
will be prior to or on a parity with any claim of any Lenders or the
Agent against the Borrower or any Guarantor in respect of any
Obligation.
6.3 Location of Assets. Each Loan Party represents and
warrants to the Agent and the Lenders that: on the Closing Date,
Schedule 6.3 hereto is a correct and complete list of such Loan Party's
chief executive office, the location of its books and records, the
locations of its assets and properties (other than deposit accounts and
in-transit inventory), and the locations of all of its other places of
business. Each Loan Party agrees that it will not maintain any assets
or properties at any location other than those listed in Schedule 6.3
hereto, unless it gives the Agent at least 30 days' prior written
notice. The Borrower represents and warrants that all apparel, footwear
and other merchandise inventory (including related accessories) owned by
the Parent and its Subsidiaries and located in the United States is
owned by a Loan Party.
6.4 Title to, Liens on, and Sale and Use of Assets and
Properties. Each Loan Party represents and warrants to the Agent and
the Lenders and agrees with the Agent and the Lenders that: (a) all of
its assets and properties are and will continue to be owned by a Loan
Party or a Subsidiary of the Parent free and clear of all Liens
whatsoever, except for Liens permitted by Section 9.15; (b) each Loan
Party will use, store, and maintain its assets and properties with all
reasonable care and will use its assets and properties for lawful
purposes only; and (c) no Loan Party will, without the prior written
approval of the Agent and the Majority Lenders, sell or dispose of or
permit the sale or disposition of any of its assets and properties,
except as permitted by Section 9.6 and/or Section 9.13.
6.5 Reimbursement for Appraisals. The Borrower shall,
within three Business Days after demand therefor by the Agent, reimburse
the Agent for any and all costs and expenses incurred by the Agent with
respect to appraisals or updates thereof of any or all of the Property
of the Loan Parties from time to time conducted or ordered by the Agent,
such appraisals or updates to include, without limitation, any of the
foregoing required under any applicable laws or regulations or any
internal policies of the Agent or any of its affiliates. The Borrower
shall promptly furnish Agent with any and all subsequent appraisals or
updates of appraisals that the Borrower has requested with respect to
the Property of the Loan Parties.
6.6 Access and Examination. The Agent, accompanied by any
Lender that so elects, may at all reasonable times and upon reasonable
notice (or at any time during the continuance of an Event or an Event of
Default) have access to, examine, audit, make extracts from and inspect
any Loan Party's records, files and books of account and its assets and
properties and to discuss the Loan Party's affairs with the Loan Party's
officers and management. Each field examination conducted by the Agent
pursuant to this Section 6.6 shall be at the Borrower's expense, it
being understood that the Borrower shall be obligated to pay the
expenses of four such field examinations per Fiscal Year unless an Event
or Event of Default shall be continuing, in which case such limitation
shall not apply. The Borrower will deliver to the Agent any instrument
necessary for the Agent to obtain records from any service bureau
maintaining records for the Loan Party. The Agent may, and at the
direction of the Majority Lenders shall, at any time and at the
Borrower's expense, make copies of all of the Loan Parties' books and
records, or require the Loan Parties to deliver such copies to the
Agent. The Agent shall have the right, at any time, in the Agent's name
or in the name of a nominee of the Agent, to verify the validity, amount
or any other matter relating to the Accounts, by mail, telephone, or
otherwise.
6.7 Insurance. (a) Each Loan Party shall insure all
tangible Property of such Loan Party (other than tangible property
located in retail stores) against loss or damage by fire with extended
coverage, theft, burglary, pilferage, loss in transit, and such other
hazards as the Agent shall specify and shall also maintain, and cause
each of its Subsidiaries to maintain, such other insurance as the Agent
may reasonably require, including, without limitation, liability
insurance, in each case in amounts, under policies and by insurers
acceptable to the Lender.
(b) Each Loan Party shall cause the Agent (for the ratable
benefit of the Lenders) to be named in each such policy as additional
insured, as appropriate, in a manner acceptable to the Agent.
Schedule 6.7 is a certificate of insurance certified by the Borrower's
insurer as to the insurance maintained by the Borrower and its
Subsidiaries as of the date hereof naming the Agent as additional
insured as and to the extent herein required. Each policy of insurance
shall contain a clause or endorsement requiring the insurer to give not
less than thirty (30) days prior written notice to the Agent in the
event of cancellation of the policy for any reason whatsoever and a
clause or endorsement stating that the interest of the Agent shall not
be impaired or invalidated by any act or neglect of a Loan Party or the
owner of any premises where assets and/or properties are located nor by
the use of such premises for purposes more hazardous than are permitted
by such policy.
(c) All premiums for such insurance shall be paid by the
applicable Loan Party when due, and certificates of insurance and, if
requested, photocopies of the policies shall be delivered to the Agent
(with copies for each of the Lenders). If a Loan Party fails to procure
such insurance or to pay the premiums therefor when due, the Agent may
(but shall not be required to) do so and charge the costs thereof to a
Loan Account.
(d) Each Loan Party shall promptly notify the Agent of any
loss, damage, or destruction to any of the tangible Property of such
Loan Party or any of its Subsidiaries or arising from its use, whether
or not covered by insurance, to the extent that the fair market value of
such Property exceeds $1,000,000.
(e) The Agent is hereby authorized to collect directly all
insurance proceeds with respect to liability insurance for which the
Agent is named as beneficiary or additional insured.
6.8 Asset Reporting. Each Loan Party will provide the Agent
(with copies for each of the Lenders) with the following documents at
the following times in form satisfactory to the Lender:
(a) weekly roll-forward inventory reports and monthly stock
ledger inventory reports;
(b) on a monthly basis, reconciliations of all amounts
listed in the reports delivered pursuant to subsection (a) hereof
with the general ledger of each Loan Party;
(c) on a weekly basis, a duly executed borrowing base
certificate substantially in the form of Exhibit H hereto certified
by an officer of the Borrower or another designated employee of the
Borrower acceptable to the Agent;
(d) such other reports with respect to Property of the Loan
Parties (other than Equipment) as the Agent shall reasonably
request from time to time; and
(e) certificates of an officer of the Borrower certifying as
to the foregoing.
If any Loan Party's records or reports are prepared by an accounting
service or other agent, each Loan Party hereby authorizes such service
or agent to deliver such records, reports, and related documents to the
Agent.
6.9 [Intentionally Omitted].
6.10 Collection of Accounts; Payments. (a) Each Loan Party
shall make collection of all Accounts, Inventory and other assets and
Properties for the Agent and shall immediately deliver all payments in
their original form duly endorsed in blank into a Payment Account
(either directly or following deposit thereof in a deposit account
maintained by each Loan Party at a bank acceptable to the Agent). Each
Loan Party shall irrevocably direct each of the banks at which deposit
accounts are established by such Loan Party to transfer, by same-day
depositary transfer, ACH Transfer or Fed Wire Transfer, on a daily basis
into a Payment Account all amounts on deposit in such deposit account.
Notwithstanding the foregoing sentence, each Loan Party shall be
entitled to retain cash at each store operated by such Loan Party (or at
the respective operating bank account(s) for each such store) in amounts
as are necessary for the day-to-day operation of each such store
consistent with past practices in respect of each such store. Each
Payment Account shall be maintained pursuant to an agreement (the
"Payment Account Agreement") among the Borrowers, the Agent and the
relevant financial institution substantially in the form of Exhibit G
hereto, which shall provide, among other things, that amounts on deposit
in the Payment Account may not be withdrawn by Parent or on behalf of
any Borrower until such time as such financial institution shall have
received written notice from the Agent and that all collected amounts in
each Payment Account shall be transferred on a daily basis to the
Agent's account for application to such Loans and/or other Obligations
(and, on and after an Event or Event of Default, upon notice by the
Agent to the Borrower, to be held as cash collateral for Letters of
Credit in an amount equal to 105% of the undrawn amount of outstanding
Letters of Credit). All funds in the Payment Account are subject to the
sole dominion and control of the Agent. On or before the Closing Date,
the Borrowers shall deliver to the Agent a Payment Account Agreement
relating to the Payment Account. Each Borrower agrees to indemnify the
Agent and each Lender against, and reimburse each on demand for, all
costs incurred by the Agent and/or each Lender in connection with the
Payment Account Agreement. Notwithstanding the termination of this
Agreement, until all of the Obligations shall have been fully paid and
satisfied, the Borrowers shall continue to deposit, or cause to be
deposited, into the Payment Account all collections of Accounts,
Inventory and other cash proceeds of the assets and Properties of any
Loan Parties.
(b) Upon sales of Inventory for cash, each Loan Party shall
promptly deposit the proceeds thereof into a depository account in
compliance with Section 6.10(a) (and until so delivered or deposited,
such payment shall be received by such Loan Party in trust for the
Agent).
(c) All payments received by the Agent on account of
Accounts, Inventory or as proceeds of the assets and Properties of any
Loan Parties will be credited to a Loan Account on the date of receipt
of good funds by the Agent at its bank account in New York City if such
good funds are received by the Agent by 12:00 noon (New York time) and
otherwise on the first Business Day thereafter.
(d) In the event the Borrower repays all of the Obligations
upon the termination of this Agreement, other than through the Agent's
receipt of payments on account of Accounts or proceeds of Inventory,
such payment will be credited to a Loan Account on the Business Day of
receipt of good funds by the Agent at its bank account in New York City
if such good funds are received by the Agent by 12:00 noon (New York
time).
6.11 Inventory; Perpetual Inventory. Each Loan Party
represents and warrants to the Agent and the Lenders that all of the
Inventory is and will be held for sale or lease, or to be furnished in
connection with the rendition of services in the ordinary course of such
Loan Party's business, and is and will be fit for such purposes (other
than a de minimis quantity of items customary for the Borrower's
industry). Each Loan Party will keep the Inventory in good and
marketable condition (other than a de minimis quantity of items
customary for the Borrower's industry), at its own expense. Except as
set forth on Schedule 6.11, no Loan Party will, without prior written
notice to the Agent, acquire or accept any inventory on consignment or
approval. Each Loan Party agrees that any Inventory manufactured by a
Loan Party will be manufactured in accordance with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations, and
orders thereunder. The Loan Parties will conduct a physical count of
the Inventory at least once per Fiscal Year, and after and during the
continuation of an Event of Default, at such other times as the Agent
requests, and shall promptly supply the Agent (with copies for the
Lenders) with a copy of such count accompanied by a report of the value
of such Inventory (valued at the lower of cost, determined on a first-
in-first-out basis, or market value). Each Loan Party will maintain a
perpetual inventory reporting system at all times. No Loan Party will,
without the Agent's written consent, sell any Inventory on a xxxx-and-
hold, guaranteed sale, sale and return (other than in the ordinary
course of Borrower's business consistent with Borrower's past practice),
sale on approval, consignment, or other repurchase or return basis.
6.12 Equipment. Each Loan Party represents and warrants to
the Agent and the Lenders and agrees with the Agent and the Lenders that
all of the Equipment is and will be used or held for use in such Loan
Party's business. Each Loan Party shall keep and maintain the Equipment
in good operating condition and repair (ordinary wear and tear excepted)
and shall make all necessary replacements thereof.
6.13 [Intentionally Omitted].
6.14 Right to Perform or Cure. The Agent (i) may in its sole
discretion and (ii) shall, when instructed in writing by the Majority
Lenders, in each case, pay any amount in order to preserve, protect,
maintain or enforce the Obligations and which a Loan Party fails to pay
or do, including, without limitation, payment of any claim or debt which
may, in the judgment of the Agent, be prior to the Obligations. All
payments that the Agent makes under this Section and all out-of-pocket
costs and expenses (including Attorney Costs) that the Agent pays or
incurs in connection with any action taken by it hereunder shall be
charged to the Loan Account and be deemed to constitute a Reference Rate
Loan in accordance with Section 4.2(b). Any payment made or other
action taken by the Agent under this Section shall be without prejudice
to any right to assert an Event of Default hereunder and to proceed
accordingly.
6.15 [Intentionally Omitted]
6.16 Agent's Rights, Duties, and Liabilities. Each Loan
Party assumes all responsibility and liability arising from or relating
to the use, sale, or other disposition of its assets and properties.
Neither the Agent nor any of its officers, directors, employees, and
agents shall be liable or responsible in any way for the safekeeping of
any of the assets or properties of any Loan Party, or for any loss or
damage thereto, or for any diminution in the value thereof, or for any
act of default by any warehouseman, carrier, forwarding agency or other
person whomsoever, all of which shall be at the Loan Party's sole risk.
Notwithstanding the foregoing, the Agent agrees to use reasonable care
in the custody and preservation of the assets or properties of any Loan
Party in its possession.
7. BOOKS AND RECORDS; FINANCIAL INFORMATION;
NOTICES.
7.1 Books and Records. At all times Parent shall maintain
for itself and each of its Subsidiaries on a consolidated basis, correct
and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP and
consistent with its past practice (including, to the extent consistent
with its past practice, on a Loan Party-by-Loan Party basis). Each Loan
Party shall, by means of appropriate entries, reflect, or cause to be
reflected by Parent, in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of Property and bad debts, all in
accordance with GAAP. At all times Parent shall maintain for each Loan
Party books and records pertaining to the assets and properties of any
Loan Party in such detail, form, and scope as the Agent shall reasonably
require, including without limitation records of: (a) all payments
received and all credits and extensions granted with respect to the
Accounts; (b) the return, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory; and (c) all other dealings
affecting the assets and properties of any Loan Party.
7.2 Financial Information. The Borrower shall promptly
furnish to the Agent and each Lender all such financial information as
any such Person shall reasonably request. The Borrower hereby
authorizes the Agent and the Lenders to meet with and/or contact the
Borrower's auditors and accountants regarding the financial condition of
the Borrower and its Subsidiaries. The Borrower will authorize its
accountants and auditors to cooperate with the Agent and the Lenders.
Without limiting the foregoing, the Borrower will furnish to the Agent
and the Lenders, in such detail as the Agent or the Majority Lenders
shall request, the following:
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, (i) consolidated
audited balance sheets of the Parent and its Subsidiaries as of the end
of such Fiscal Year and (ii) consolidated audited statements of income
and expense, retained earnings and cash flow for the Parent and its
Subsidiaries for such Fiscal Year, and the accompanying notes thereto,
setting forth in each case in comparative form figures for the previous
Fiscal Year, all in reasonable detail, fairly presenting the financial
position and the results of operations of the Parent and its
Subsidiaries as at the date thereof and for the Fiscal Year then ended,
and prepared in accordance with GAAP. Such statements shall be examined
in accordance with generally accepted auditing standards by and
accompanied by a report thereon unqualified as to scope of Ernst & Young
or such other independent certified public accountants selected by the
Parent and reasonably satisfactory to the Lender.
(b) As soon as available, but in any event not later than
forty-five (45) days after the close of each fiscal quarter of the
Parent other than the fourth quarter of a Fiscal Year, (i) consolidated
unaudited balance sheets of the Parent and its Subsidiaries as at the
end of such quarter and (ii) consolidated unaudited statements of
income and expense and cash flow for the Parent and its Subsidiaries for
such quarter and for the period from the beginning of the Fiscal Year to
the end of such quarter, in each instance setting forth next to such
quarterly figures and year to end of quarter figures, the budgeted
figures for such periods, respectively, together with the accompanying
notes thereto, all in reasonable detail, fairly presenting the financial
position and results of operation of the Parent and its Subsidiaries as
at the date thereof and for such periods, and prepared in accordance
with GAAP consistent with the audited Financial Statements required
pursuant to Section 7.2(a). The Parent shall certify, by a certificate
signed by its chief financial officer, that all such statements have
been prepared in accordance with GAAP and present fairly, subject to
normal year-end adjustments, the Parent's consolidated financial
position as at the dates thereof and its results of operations for the
periods then ended.
(c) As soon as available, but in any event not later than
twenty-five (25) days after the close of each fiscal month of the
Parent, (i) consolidated unaudited balance sheets of the Parent and its
Subsidiaries as at the end of such fiscal month and (ii) consolidated
unaudited statements of income and expense and cash flow for the Parent
and its Subsidiaries for such fiscal month and for the period from the
beginning of the Fiscal Year to the end of such fiscal month, together
with comparable store information by division for the corresponding
portion of the Parent's previous Fiscal Year, all in reasonable detail.
The Parent shall certify, by a certificate signed by its chief financial
officer, that all such statements have been prepared in accordance with
GAAP and present fairly, subject to normal year-end adjustments, the
Parent's consolidated financial position as at the dates thereof and its
results of operations for the periods then ended.
(d) With each of the audited Financial Statements delivered
pursuant to Section 7.2(a), a certificate of the independent certified
public accountants that examined such statements to the effect that they
have reviewed and are familiar with the Loan Documents and that, in the
course of examining such Financial Statements, they did not become aware
of any fact or condition which then constituted an Event or Event of
Default, except for those, if any, described in reasonable detail in
such certificate.
(e) With each of the annual audited, quarterly and monthly
unaudited Financial Statements delivered pursuant to Sections 7.2(a),
7.2(b) and 7.2(c), a certificate of the chief financial officer of the
Parent (i) setting forth in reasonable detail the calculations required
to establish that the Borrower was in compliance with its covenants set
forth in Sections 9.19 and 9.20 during the period covered in such
Financial Statements; (ii) stating that, except as explained in
reasonable detail in such certificate, (A) all of the representations,
warranties and covenants of the Borrower contained in this Agreement and
the other Loan Documents are correct and complete in all material
respects as at the date of such certificate, and (B) no Event of Default
then exists or existed during the period covered by such Financial
Statements, (iii) describing and analyzing in reasonable detail all
material trends, changes and developments in each and all Financial
Statements and (iv) explaining the variances of the figures in such
Financial Statements from those figures in the corresponding budgets and
prior Fiscal Year financial statements. If such certificate discloses
that a representation or warranty is not correct or complete, or that a
covenant has not been complied with, or that an Event of Default existed
or exists, such certificate shall set forth what action the Borrowers
have taken or proposes to take with respect thereto.
(f) No sooner than 60 days prior to and no later than the
beginning of each Fiscal Year, annual forecasts (to include forecasted
consolidated balance sheets, statements of income and expenses and
statements of cash flow) for the Borrower and its Subsidiaries on a
consolidated basis as at the end of and for each month of such Fiscal
Year.
(g) Promptly upon their becoming available, copies of each
proxy statement, financial statement, and report which the Parent makes
available to its stockholders.
(h) Promptly after filing with the PBGC and the IRS a copy
of each annual report or other filing filed with respect to each Plan of
the Borrower or any Related Company.
(i) Promptly upon the filing thereof, copies of all reports,
if any, to or other documents filed by the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission under the
Securities Act of 1933 or the Securities Exchange Act of 1934, and all
reports, notices or statements sent or received by the Borrower or any
of its Subsidiaries to or from the holders of any equity interests of
the Borrower (other than routine non-material correspondence sent by
shareholders of the Parent to the Parent) or any such Subsidiary or of
any Debt for borrowed money of the Borrower or any of its Subsidiaries
registered under the Securities Act of 1933 or to or from the trustee
under any indenture under which the same is issued.
(j) As soon as available, but in any event not later than 15
days after the Borrower's receipt thereof, a copy of all management
reports and management letters prepared for the Borrower by Ernst &
Young or any other independent certified public accountants of the
Borrower.
(k) (i) Copies of all pleadings, motions, applications,
financial information and other materials and documents filed by the
Borrower or any Subsidiary thereof in connection with the Chapter 11
Case promptly following the filing thereof and (ii) copies of all
written reports given by the Borrower or any Subsidiary to any official
or unofficial creditors' committee in the Chapter 11 Case promptly after
the sending thereof.
(l) Such additional information as the Agent or any Lender
(through the Agent) may from time to time reasonably request regarding
the financial and business affairs of the Borrower or any Subsidiary of
the Borrower.
7.3 Notices to the Agent and the Lenders. The Borrower
shall notify the Agent and the Lenders in writing of the following
matters at the following times:
(a) Immediately after becoming aware of the existence of any
Event or Event of Default.
(b) Within two (2) Business Days after becoming aware that
the holder of any capital stock of the Borrower or of any Debt incurred
after the Filing Date in excess of $2,000,000 owing by the Borrower or
any Subsidiary has given notice or taken any action with respect to a
claimed default or of becoming aware of the existence of a default or an
event of default under or with respect to any such Debt.
(c) Within two (2) Business Days after becoming aware of any
material adverse change in the Property, business, operations, prospects
or condition (financial or otherwise) of the Borrower and its
Subsidiaries.
(d) Within two (2) Business Days after becoming aware of any
pending or threatened action, proceeding, or counterclaim by any Person,
or any pending or threatened investigation by a Public Authority, which
in either case may reasonably be expected to have a Material Adverse
Effect.
(e) Within two (2) Business Days after becoming aware of any
pending or threatened strike, work stoppage, unfair labor practice
claim, or other labor dispute affecting the Borrower or any of its
Subsidiaries in a manner which could reasonably be expected to have a
Material Adverse Effect.
(f) Within two (2) Business Days after becoming aware of any
violation of any law, statute, regulation, or ordinance of a Public
Authority applicable to Borrower which may reasonably be expected to
have a Material Adverse Effect.
(g) Within two (2) Business Days after becoming aware of any
material violation by the Borrower of any Environmental Law or that its
compliance is being investigated.
(h) Immediately after becoming aware of any Termination
Event with respect to a Retrement Plan subject to Title VII of ERISA, or
any other Reportable Event with respect to a Retirement Plan subject to
Title VII of ERISA, accompanied by any materials required to be filed
with the PBGC with respect thereto; within 60 days following the
establishment of any Retirement Plan not existing at the date hereof or
the commencement of contributions by the Borrower to any Plan or
Multiemployer Plan to which the Borrower was not contributing at the
date hereof; immediately upon becoming aware that an application is to
be or has been made to the Secretary of the Treasury for a waiver of the
minimum funding standard under the provisions of Section 412 of the
Internal Revenue Code, together with a copy of such application; and
immediately upon becoming aware of any other event or condition
regarding a Plan or the Borrower's or a Related Company's compliance
with ERISA which may reasonably be expected to have a Material Adverse
Effect.
(i) Thirty (30) days prior to the Borrower or any Subsidiary
thereof changing its name, state of incorporation or form of
organization.
Each notice given under this Section shall describe the
subject matter thereof in reasonable detail and shall set forth the
action that the Borrower or the relevant Subsidiary of the Borrower, as
the case may be, has taken or proposes to take with respect thereto.
For purposes of Section 7.3(h), the Borrower and any Related Company
shall be deemed to know all facts known by the administrator of any Plan
of which the Borrower or any Related Company is the plan sponsor.
8. GENERAL WARRANTIES AND REPRESENTATIONS.
Each Loan Party, jointly and severally continuously represents
and warrants to the Agent and the Lenders (and, except with respect to
any representation or warranty which is stated to be made as of a
specific date which shall be deemed repeated as of such date, shall be
deemed to have repeated each such representation and warranty on each
date that any Obligations remain outstanding) that, except as hereafter
disclosed to and accepted by the Agent and the Majority Lenders in
writing as required under Section 9.25.
8.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents. Each Loan Party has the corporate
power and authority to execute, deliver and perform this Agreement and
the other Loan Documents and to incur the Obligations. Each Loan Party
has taken all necessary corporate action (including, without limitation,
obtaining approval of its stockholders if necessary) to authorize its
execution, delivery, and performance of this Agreement and the other
Loan Documents. No consent, approval, or authorization of, or filing
with, any Public Authority, and no consent of any other Person, is
required in connection with the Loan Party's execution, delivery, and
performance of this Agreement and the other Loan Documents, except for
the Interim Bankruptcy Court Order and the Final Bankruptcy Court Order.
This Agreement and the other Loan Documents have been duly executed and
delivered by the Loan Parties and constitute legal, valid and binding
obligations of the Loan Parties, enforceable against each Loan Party in
accordance with their respective terms without defense, setoff, or
counterclaim except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of
equity. Each Loan Party's execution, delivery, and performance of this
Agreement and the other Loan Documents do not and will not conflict
with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon the
Property of the Borrower or any of its Subsidiaries (except as
contemplated by this Agreement and the other Loan Documents) by reason
of the terms of (x) any mortgage, lease, agreement or instrument to
which the Borrower or any of its Subsidiaries is a party or which is
binding upon it (except to the extent that such conflicts, violations,
breaches or defaults and any enforcement actions in respect thereof are
stayed by virtue of the filing of the Chapter 11 Case), (y) any
judgment, law, statute, rule, court order (including, without
limitation, any court order entered in the Chapter 11 Case) or
governmental regulation applicable to the Borrower or any of its
Subsidiaries, or (z) the Certificate or Articles of Incorporation or By-
Laws or other charter documents of the Borrower or any of its
Subsidiaries.
8.2 [Intentionally Omitted].
8.3 Organization and Qualification. Each Loan Party: (a)
is duly incorporated and organized and validly existing in good standing
under the laws of the state of its incorporation; (b) is qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the failure to so qualify or be in good standing
could reasonably be expected to have a material adverse effect on the
Loan Party's Property, business, operations, prospects or condition
(financial or otherwise); and (c) has all requisite corporate power and
authority to conduct its business and to own its Property.
8.4 Corporate Name; Prior Transactions. No Loan Party has,
during the past five years, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or
acquired any of its Property out of the ordinary course of business,
except as otherwise set forth in Schedule 8.4 hereto.
8.5 Subsidiaries and Affiliates. Schedule 8.5 hereto is a
correct and complete list of the name and relationship to the Borrower
of each and all of the Borrower's Subsidiaries. Each such Subsidiary
(a) is duly incorporated and organized and validly existing in good
standing under the laws of its jurisdiction of incorporation set forth
in Schedule 8.5 hereto, (b) is qualified to do business as a foreign
corporation and in good standing in the jurisdictions set forth opposite
its name on Schedule 8.5 hereto, which are the only jurisdictions in
which the failure to so qualify or be in good standing could reasonably
be expected to have a Material Adverse Effect and (c) has all requisite
power and authority to conduct its business and own its Property.
8.6 Financial Statements and Forecasts. (a) The
projections for the Parent and its Subsidiaries for the period through
January 31, 1997 heretofore submitted to the Agent and the Lenders
represent the Parent's best estimate of the future financial performance
of the Parent's and its Subsidiaries for the periods set forth therein.
The foregoing projections have been prepared on the basis of the
assumptions set forth therein, which the Borrower believes are fair and
reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Agent and the Lenders.
(b) The Borrower has delivered to the Agent and the Lenders
on or prior to the date hereof the audited balance sheet and related
statements of income and expense, retained earnings, changes in
financial position, changes in stockholders equity and cash flow for the
Parent and its Subsidiaries (and related footnotes), as of January 28,
1995 and for the Fiscal Year then ended, accompanied by the report
thereon of Ernst & Young, the Parent's independent certified public
accountants. The Parent has also delivered to the Agent and the Lenders
the unaudited balance sheet and related statements of income and
expense, retained earnings, changes in financial position, changes in
stockholders equity and cash flow for the Parent and its Subsidiaries,
as of September 30, 1995 and for the eight months then ended. Since the
date of such unaudited financial statements, no material adverse change
has occurred in the Borrower's business, operations, prospects,
condition (financial or otherwise), performance or properties, except as
set forth on Schedule 8.24 and other than those which customarily occur
as a result of events following the commencement of a proceeding under
Chapter 11 of the Bankruptcy Code and the commencement of the Chapter 11
Cases. All such financial statements have been prepared in accordance
with GAAP and present fairly the Parent's financial position as at the
dates thereof and its results of operations for the periods then ended.
8.7 Capitalization and Corporate Structure. The Parent's
capitalization and the corporate structure of the Parent and the
Guarantors is accurately described in on Schedule 8.7 hereto.
8.8 Reorganization Matters. (a) After the Entry Date and
pursuant to and to the extent permitted in the Interim Bankruptcy Court
Order and the Final Bankruptcy Court Order, the Obligations will
constitute allowed administrative expense claims in the Chapter 11 Case
having priority over all administrative expense claims and unsecured
claims against the Borrower and its Subsidiaries now existing or
hereafter arising, of any kind whatsoever, including, without
limitation, all administrative expense claims of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code, subject, as to
priority, only to Carve-Out Expenses.
(b) The Interim Bankruptcy Court Order (with respect to the
period prior to the Final Bankruptcy Court Order Date) or (with respect
to the period on and after the Final Bankruptcy Court Order Date) the
Final Bankruptcy Court Order, as the
case may be, is in full force and effect and has not been reversed,
stayed, modified or amended absent express written joinder and consent
of the Majority Lenders and the Agent.
8.9 Title to Property. The Borrower has such title to its
real property and title to all of its other Property, in each case
necessary to operate its business.
8.10 [Intentionally Omitted].
8.11 Proprietary Rights. Schedule 8.11 hereto is a correct
and complete list of all patents, trademarks and copyrights owned by the
Loan Parties. None of the Proprietary Rights is subject to any
licensing agreement or similar arrangement except as set forth on
Schedule 8.11. None of the Proprietary Rights, to the best of the Loan
Parties' knowledge, infringes on any other Person's Property. The
Proprietary Rights constitutes all of the Property of such type
necessary to the current and anticipated future conduct of the Loan
Parties' business.
8.12 Trade Names and Terms of Sale. All trade names or
styles under which the Loan Parties will do business or sell Inventory
or create Accounts, or to which instruments in Payment of Accounts may
be made payable, are listed in Schedule 8.12 hereto.
8.13 Litigation. Except as set forth on Schedule 8.13 and
except for the Chapter 11 Case, there is no pending or, to the best of
the Loan Parties' knowledge, threatened suit, proceeding, or
counterclaim by any Person, or investigation by any Public Authority, or
any basis for any of the foregoing, which is reasonably likely to have a
Material Adverse Effect or in which there is a reasonable likelihood of
recovery of an amount in excess of $5,000,000.
8.14 Restrictive Agreements. Except as set forth on Schedule
8.14, no Loan Party is a party to any agreement, or subject to any
corporate restriction, which is reasonably likely to have a Material
Adverse Effect.
8.15 Labor Disputes. Within the United States: (a) there is
no collective bargaining agreement or other labor contract covering
employees of the Borrower or any of its Subsidiaries; (b) no such
collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement; (c) to the best of the
Borrower's knowledge, no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of
employees of the Borrower or any of its Subsidiaries; and (d) there is
no pending or, to the best of the Borrower's knowledge, threatened
strike, work stoppage, material unfair labor practice claims, or other
material labor dispute against or affecting the Borrower or any of its
Subsidiaries, or any of its employees.
8.16 Environmental Laws. Except as set forth on Schedule
8.16, no Loan Party has generated, handled, used, stored, or disposed of
any hazardous or toxic waste or substance, as defined pursuant to
Environmental Laws, on or off its premises (whether or not owned by it),
except to the extent any of the foregoing would not result in a Material
Adverse Effect, and each Loan Party has complied with all Environmental
Laws applicable to transfer, construction on, and operation of its
Property and business, except to the extent such non-compliance would
not result in a Material Adverse Effect. No Loan Party has any
liability with respect to non-compliance with Environmental Laws or the
generation, handling, use, storage, or disposal of hazardous or toxic
wastes or substances, except to the extent any of the foregoing would
not result in a Material Adverse Effect. No Loan Party has received any
summons, complaint or order, which would be reasonably likely to result
in a Material Adverse Effect, from a Governmental Authority that such
Loan Party is not in compliance with, or that any Public Authority is
investigating its compliance with, Environmental Laws.
8.17 No Violation of Law. No Loan Party is in violation of
any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation would be reasonably likely to have a
Material Adverse Effect.
8.18 No Default. Other than as set forth on Schedule 8.18,
no Loan Party is in default with respect to any note, loan agreement,
mortgage, lease, or other agreement entered into on or after the Filing
Date (or assumed on or after the Filing Date or effective thereafter in
accordance with applicable law) to which a Loan Party is a party or
bound, which default would be reasonably likely to have a Material
Adverse Effect.
8.19 ERISA. Neither the Borrower nor any Related Company
maintains or contributes to any Plan other than those listed on Schedule
8.19. The Borrower has given to the Agent (i) a copy of the Plan
document of each Plan in existence as of the date of this Agreement and
(ii) a list designating each Multiemployer Plan to which the Borrower or
any Related Company is obligated to make an annual contribution and a
copy of the collective bargaining agreement pursuant to which such
contribution is required to be made. Each Retirement Plan which is
intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined to be qualified under Sec-
tion 401(a) of the Code and the trust related thereto is exempt from
federal income tax under Section 501(a) of the Code. Except as would
not reasonably be expected to result in a Material Adverse Effect, (i)
no Retirement Plan has incurred any "accumulated funding deficiency", as
defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code,
whether or not waived, nor has any Reportable Event occurred with
respect to any Retirement Plan for which any liability remains
outstanding; (ii) neither the Borrower nor any Related Company has
incurred any liability to the PBGC other than the payment of premiums,
and there are no premiums payments which have become due which are
unpaid; (iii) neither the Borrower nor any of its Subsidiaries has
breached any of the responsibilities, obligations or duties imposed on
it by ERISA with respect to any Plan; (v) neither the Borrower nor any
Related Company nor any fiduciary of or any trustee to any Plan has
engaged in a nonexempt "prohibited transaction" described in Section 406
of ERISA or Section 4975 of the Code nor taken any action which would
constitute or result in a Termination Event with respect to any such
Plan which is subject to ERISA; and (vi) there are no actions, suits or
claims pending (other than routine claims for benefits) or, to the
knowledge of the Borrower, which could reasonably be expected to be
asserted against any Plan, or the assets of any such Plan. No Plan has
been terminated by the plan administrator thereof or by the PBGC. At
this time, the current value of the assets of each Plan exceeds the
present value of the Plan's "benefit liabilities" (within the meaning of
Section 4001(a)(16) of ERISA), of such Plan, and the Borrower knows of
no facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities. Neither the
Borrower nor any Related Company has suffered a complete or partial
withdrawal from a Multiemployer Plan.
8.20 Taxes. Each Loan Party has filed all tax returns and
other reports which it was required by law to file on or prior to the
date hereof and has paid all taxes, assessments, fees, and other
governmental charges, and penalties and interest, if any, against it or
its Property, income, or franchise, that are due and payable (except to
the extent that (i) (a) any such taxes, assessments, fees, and other
governmental charges, and penalties and interests are diligently
contested in good faith by appropriate proceedings and proper reserves
are established on the books of the applicable Loan Party as provided in
GAAP and (b) a stay of enforcement of any Liens arising from the
nonpayment thereof when due is in effect or (ii) such Loan Party is not
required to pay the foregoing as a result of the commencement of the
Chapter 11 Case).
8.21 Use of Proceeds. None of the transactions contemplated
in this Agreement (including, without limitation, the use of certain
proceeds from the Loans) will violate or result in the violation of Sec-
tion 7 of the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System ("Federal Reserve Board"), 12 C.F.R., Chapter II. The
Borrower does not own or intend to carry or purchase any "margin stock"
within the meaning of said Regulation G. None of the proceeds of the
Loans will be used, directly or indirectly, to purchase or carry (or
refinance any borrowing, the proceeds of which were used to purchase or
carry) any "security" within the meaning of the Securities Exchange Act
of 1934, as amended. The Agent, the Lenders, the Borrower and the Loan
Parties each agree that the restrictions as to use of the funds under
the Agreement are commercially reasonable and are made in good faith.
8.22 Private Offerings. The Borrower hereby agrees that
neither it nor anyone acting on its behalf has offered or will offer the
Revolving Loans or any part thereof or any similar securities for issue
or sale to or solicit any offer to acquire any of the same from anyone
so as to bring the issuance thereof within the provisions of Section 5
of the Securities Act of 1933, as amended.
8.23 Broker's Fees. The Borrower represents that it has not
made any commitment or taken any action which will result in a claim for
any finders' or similar fees or commitments in respect to the
transaction described in this Agreement. The Borrower agrees to defend
the Agent and the Lenders and save each of them harmless from all claims
of any Person for any such fees and this indemnity shall include
reasonable attorneys' fees and legal expenses. This indemnity shall
survive the repayment of the Obligations and the termination of this
Agreement.
8.24 No Material Adverse Change. Except as disclosed in
Schedule 8.24 hereof and other than as customarily occurs as a result of
events following the commencement of a proceeding under Chapter 11 of
the Bankruptcy Code and the commencement of the Chapter 11 Case, no
material adverse change has occurred in the Property, business,
operations, prospects or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, since September 30,
1995.
8.25 Disclosure. Neither this Agreement nor any document or
statement furnished to the Agent or any Lender by any Loan Party
hereunder contains any untrue statement by a Loan Party of a material
fact or omits to state any material fact necessary in order to make the
statements by a Loan Party contained herein or therein not misleading.
9. AFFIRMATIVE AND NEGATIVE COVENANTS.
The Borrower covenants that, so long as any of the Obligations
remain outstanding or this Agreement is in effect:
9.1 Taxes and Other Obligations. The Borrower shall, and
shall cause each of its Subsidiaries to: (a) file when due all tax
returns and other reports which it is required to file, pay when due
(except to the extent such payment is not required to be made by reason
of the commencement of the Chapter 11 Case) all taxes, fees, assessments
and other governmental charges against it or upon its Property, income
and franchises, make all required withholding and other tax deposits,
and establish adequate reserves for the payment of all such items, and
shall provide to the Agent or any Lender, upon request, satisfactory
evidence of its timely compliance with the foregoing; and (b) to the
extent permitted under Section 9.10, pay when due (except to the extent
such payment is not required to be made by reason of the commencement of
the Chapter 11 Case) all Debt owed by it and all claims of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, and
perform and discharge in a timely manner all other obligations
undertaken by it; provided, however, that, so long as the Borrower has
notified the Agent in writing, the Borrower or its Subsidiary, as the
case may be, need not pay any tax, fee, assessment, governmental charge,
or Debt, or perform or discharge any other obligation, that (i) it is
contesting in good faith by appropriate proceedings diligently pursued,
(ii) the Borrower or its Subsidiary, as the case may be, has established
proper reserves for as provided in GAAP and (iii) a stay of enforcement
is in effect with respect to any Lien arising or securing the non-
payment thereof.
9.2 Corporate Existence and Good Standing. The Borrower
shall, and shall cause each of its Subsidiaries to, maintain its
corporate existence. The Borrower shall, and shall cause each of its
Subsidiaries to, maintain its qualification and good standing in all
jurisdictions in which the failure to maintain such qualification or
good standing could reasonably be expected to have a Material Adverse
Effect, and shall, and shall cause each of its Subsidiaries to, obtain
and maintain all licenses, permits, franchises and governmental
authorizations the failure of which to obtain or maintain could
reasonably be expected to have a material adverse effect on the
Borrower's or such Subsidiary's Property, business, operations,
prospects or condition (financial or otherwise).
9.3 Compliance with Law and Agreements; Maintenance of
Licenses. Except to the extent compliance therewith is not required by
reason of the Chapter 11 Case, the Borrower shall and shall cause each
of its Subsidiaries to, comply with the terms and provisions of each
judgment, law, statute, rule and governmental regulation applicable to
it and each contract, mortgage, lien, lease, indenture, order,
instrument, agreement, or document to which it is a party or by which it
is bound, except where the failure to so comply could not reasonably be
expected to result in a Material Adverse Effect. The Borrower shall,
and shall cause each of its Subsidiaries to, obtain and maintain all
licenses, permits, franchises and governmental authorizations necessary
to own its Property and to conduct its business as conducted on the
Closing Date, except where the failure to so obtain or maintain could
not reasonably be expected to result in a Material Adverse Effect.
9.4 Maintenance of Property and Insurance. (a) Except with
respect to property sold or otherwise disposed of as permitted under
Section 9.6, the Borrower shall, and shall cause each of its
Subsidiaries to, maintain all of its Property necessary and useful in
its business in good operating condition and repair, ordinary wear and
tear excepted; and (b) in addition to the insurance required by Section
6.7, the Borrower shall, and shall cause each of its Subsidiaries to,
maintain such other insurance (which may be self-insurance) with respect
to its Property and business against casualties and contingencies of
such types (including, without limitation, business interruption,
environmental liability, public liability, product liability, and
larceny, embezzlement or other criminal misappropriation) and in such
amounts as is customary for Persons of established reputation engaged in
the same or a similar business and similarly situated. All of the
insurance of the Borrower and its Subsidiaries shall require at least
thirty (30) days (or, in the case of nonpayment of premiums, ten (10)
days) prior written notice to the Agent of any cancellation, non-renewal
or material change.
9.5 Environmental Laws. Except for any violation of
Environmental Laws disclosed on Schedule 8.16, the Borrower shall, and
shall use its best efforts to cause each of its Subsidiaries to, conduct
its business in compliance with all Environmental Laws applicable to it,
including, without limitation, those relating to the Borrower's or such
Subsidiary's generation, handling, use, storage, and disposal of
hazardous and toxic wastes and substances. The Borrower shall, and
shall use its best efforts to cause each of its Subsidiaries to,
consistent with good business practices, take prompt and appropriate
action to respond to any non-compliance with Environmental Laws and
shall, upon the reasonable request of the Agent, report to the Agent on
such response. Without limiting the generality of the foregoing,
whenever there is potential for non-compliance with any Environmental
Law which would be likely to result in a Material Adverse Effect, the
Borrower shall, at the Agent's request and the Borrower's expense:
(a) retain an independent environmental engineer acceptable to the Agent
and the Borrower to conduct such tests of the site where the Borrower's
or such Subsidiary's non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Agent a
report setting forth the results of such tests, a proposed plan for
responding to any environmental problems described therein if so
recommended by the environmental engineer and accepted by the Agent and
the Borrower, and an estimate of the costs thereof; and (b) upon the
reasonable request of Agent, provide to the Agent a supplemental report
of such engineer whenever the scope of the environmental problems, or
the Borrower's or the Subsidiary's response thereof or the estimated
costs thereof, shall, in the Borrower's business judgment, materially
change from the initial report.
9.6 Mergers, Consolidations, Acquisitions, or Sales. The
Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction of merger, reorganization, or consolidation,
or transfer, sell, assign, lease, or otherwise dispose of all or any
part of its Property, or wind up, liquidate or dissolve, or agree to do
any of the foregoing, except (i) sales of Inventory in the ordinary
course of business, (ii) sales of other assets and properties (other
than inventory) not exceeding $25,000,000 in the aggregate during the
term of this Agreement, (iii) sales of assets in connection with store
closings in connection with the closing of not more than 850 stores
during the term of this Agreement and (iv) leases of real property among
the Parent and its Subsidiaries or between Subsidiaries.
9.7 Distributions; Issuance of Shares; Etc. (a) The
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly declare or make, or incur any liability to make,
any Distribution, except Distributions to the Borrower or any Loan Party
by any of its Subsidiaries.
(b) The Borrower shall not after the Closing Date authorize
or issue any shares of its capital stock other than capital stock issued
pursuant to stock option plans of the Borrower existing on the Closing
Date as such plans are in effect on the Closing Date.
(c) The Borrower shall not after the Closing Date amend or
modify its certificate of incorporation or bylaws in any manner which
could reasonably be expected to have a Material Adverse Effect without
the prior written consent of the Agent and the Majority Lenders;
provided that the Borrower may change its name upon thirty (30) days'
prior written notice to the Agent.
9.8 Transactions Affecting Obligations. The Borrower shall
not, and shall not permit any of its Subsidiaries to, enter into any
transaction which could reasonably be expected to have a Material
Adverse Effect.
9.9 Guaranties. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make, issue, or become liable on any
Guaranty, except
(a) Guaranties in favor of the Agent and/or the Lenders;
(b) endorsements of instruments for deposit;
(c) Guaranties of real property leases of the Parent and its
Subsidiaries;
(d) Guaranties in existence on the Filing Date; and
(e) Guaranties of Debt of the Parent and its Subsidiaries to
the extent such Debt is permitted under Section 9.10.
9.10 Debt. The Borrower shall not, and shall not permit any
of its Subsidiaries to, incur or maintain any Debt, other than:
(a) the Obligations;
(b) trade payables and other contractual obligations to
suppliers and customers incurred in the ordinary course of business
(subject, in the case of any such trade payables and other
contractual obligations owing by the Borrower to Affiliates of the
Borrower, to Section 9.12);
(c) Debt incurred to finance the purchase of Equipment
constituting Capital Expenditures permitted by Section 9.19, so
long as the principal amount of Debt incurred for any such purchase
of Equipment does not exceed 100% of the cost of such Equipment;
(d) Debt incurred in the ordinary course of business under
operating leases;
(e) Debt permitted under Section 9.9;
(f) Debt existing on the Filing Date, but not any extension
of any thereof or any increase in the principal amount of any
thereof;
(g) (x) in the case of any Subsidiary that is a Loan Party,
Debt to the Borrower or to a wholly-owned Subsidiary that is a Loan
Party incurred in the ordinary course of business of such
Subsidiary consistent with the past practices of the Borrower and
its Subsidiaries provided that any such Debt is subordinated in
right of payment to the Obligations and (y) in the case of all
Subsidiaries that are not Loan Parties, Debt to the Borrower or a
wholly-owned Subsidiary incurred in the ordinary course of business
of any such non-Loan Party Subsidiary consistent with the past
practices of the Borrower and its Subsidiaries in a net aggregate
outstanding principal amount not exceeding $2,000,000 at any time;
(h) Debt of the Borrower to any wholly-owned Subsidiary that
is a Loan Party incurred in the ordinary course of the business of
the Borrower and its Subsidiaries consistent with their past
practice, provided that any such Debt is subordinated in right of
payment to the Obligations; and
(i) Debt incurred in the ordinary course of business under
employee benefit plans.
9.11 Debt Payments and Prepayments; Modification of Debt
Terms. The Borrower shall not, and shall not permit any of its
Subsidiaries to, make payments of principal or interest with respect to
the Debt listed on Schedule 9.10 hereof or to prepay any other Debt
(other than (w) payments to Mercantile required under the Mercantile
Letter of Credit Facility in order for the Loan Parties to obtain
ownership of goods subject to the letters of credit issued thereunder
free and clear of all Liens (to the extent such payments are otherwise
authorized by the Bankruptcy Court), (x) Debt described on Schedule
9.11, (y) the Obligations in accordance with their terms and (z) trade
payables in order to obtain the benefits of discounts on such payables).
The Borrower shall not, and shall not permit any of its Subsidiaries to,
amend or modify any of the Debt listed on Schedule 9.10 hereto.
9.12 Transactions with Affiliates. Except as expressly
permitted herein, the Borrower shall not, and shall not permit any of
its Subsidiaries to, sell, transfer, distribute, or pay any money or
Property to any Affiliate, or lend or advance money or Property to any
Affiliate, or invest in (by capital contribution or otherwise) or
purchase or repurchase any stock or indebtedness, or any Property, of
any Affiliate, or become liable on any Guaranty of the indebtedness,
dividends, or other obligations of any Affiliate, or otherwise become
indebted to any Affiliate, other than (i) upon terms (including, without
limitation, pricing) no less favorable to it than it would be able to
obtain in a comparable arm's length transaction with a third party who
is not an Affiliate and (ii) salaries and other compensation and
advances and reimbursement for business related expenses to employees of
the Borrower who are Affiliates.
9.13 Non-Loan Party Subsidiaries. The Loan Parties shall not
enter into transactions with Subsidiaries of Parent who are not Loan
Parties (other than transactions in the ordinary course of business
consistent with past practices). Without in any manner limiting the
foregoing, no Loan Party shall transfer or convey Inventory to any
Subsidiary of the Parent who is not a Loan Party, other than in the
ordinary course of business consistent with past levels and practice of
such Loan Party.
9.14 Business Conducted. The Borrower shall not, and shall
not permit any of its Subsidiaries to, engage, directly or indirectly,
in any line of business other than the businesses in which they are
engaged on the date hereof.
9.15 Liens. The Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur or assume, or permit to exist, any
Lien on any Property now owned or hereafter acquired by any of them,
except Permitted Liens.
9.16 Sale and Leaseback Transactions. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into any arrangement with any Person providing for the
Borrower or a Subsidiary to lease or rent Property that the Borrower or
Subsidiary has or will sell or otherwise transfer to such Person.
9.17 New Subsidiaries. The Borrower shall not, directly or
indirectly, organize or acquire any Subsidiary other than those existing
on the Closing Date.
9.18 Restricted Investments. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Restricted
Investment.
9.19 Capital Expenditures. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make or incur any Capital Expen-
diture during the term of this Agreement if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by the
Borrower and its Subsidiaries during any Fiscal Year shall exceed
$35,000,000 (provided, however, that amounts permitted but not expended
in one Fiscal Year may be expended in the immediately succeeding Fiscal
Year, but in no other Fiscal Year).
9.20 Minimum EBITDA. The Borrower shall not permit EBITDA
for the Borrower and its Subsidiaries on a consolidated basis, as at the
end of each month, to be less than negative $15,000,000 for the twelve
month period ending on each such date. With respect to any month ending
after the one-year anniversary of the Closing Date through and including
any month ending before the two-year anniversary of the Closing Date
(such period, "Year Two"), the foregoing minimum EBITDA of negative
$15,000,000 shall be further reduced on a dollar-for-dollar basis by the
amount that EBITDA for the Borrower and its Subsidiaries for the twelve-
month period commencing at the beginning of the Parent s fourth fiscal
quarter in 1995 (on or about November 1, 1995) through the end of the
Parent s third fiscal quarter in 1996 (on or about October 31, 1996)
exceeds $18,000,000 (provided that such minimum EBITDA for Year Two
shall at no time be less than negative $25,000,000).
9.21 Termination of Liens. At the request of the Agent, the
Borrower shall obtain and deliver to the Agent duly executed UCC-3
Termination Statements from such parties who maintain Liens (other than
Permitted Liens) on the property of any Loan Party, together with such
other instruments, in form and substance satisfactory to the Agent and
the Majority Lenders, in each instance, as shall be necessary to
terminate and satisfy all such Liens on the property of any Loan Party.
9.22 Fiscal Year. The Borrower shall not change its Fiscal
Year.
9.23 ERISA. (a) For each Plan adopted by the Borrower or
any Subsidiary with the intent that it be qualified under Section 401(a)
of the Code, the Borrower shall (i) use its best efforts to seek and
receive a determination letter from the IRS that such Plan is qualified
under Section 401(a) of the Code, and (ii) from and after the adoption
of any such Plan, use its best efforts to cause such Plan to be
qualified under Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and
Section 401(a) of the Code, and (iii) not take any action which would
cause such Plan not to be qualified under Section 401(a) of the Code or
not to be administered in all material respects in accordance with the
requirements of ERISA and Section 401(a) of the Code.
(b) The Borrower shall not, and shall not permit any Related
Company to:
(i) Engage in any transaction for which an exemption
is not available or has not been previously obtained from the DOL
in connection with which the Borrower or any Related Company could
be subject to either a civil penalty assessed pursuant to Section
502(i) of ERISA or tax imposed by Section 4975 of the Code with
respect to the period following the commencement of the Chapter 11
Case;
(ii) Permit to exist any accumulated funding
deficiency (whether or not waived), as defined in Section 302 of
ERISA and Section 412 of the Code;
(iii) Fail to pay timely required contributions or
annual installments due with respect to any waived funding
deficiency to any Plan;
(iv) Fail to make any payments to any Multiemployer
Plan the Borrower or any Related Company may be required to make
under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(v) Terminate, or permit a Related Company to
terminate, any Plan which would result in any liability of the
Borrower or a Related Company under Title IV of ERISA;
(vi) Fail to pay any required installment under
section (m) of Section 412 of the Code or any other payment
required under Section 412 of the Code on or before the due date
for such installment or other payment with respect to the period
following the commencement of the Chapter 11 Case; or
(vii) Amend a Retirement Plan resulting in an increase
in current liability for the plan year such that the Borrower or a
Related Company is required to provide security to such Plan under
Section 401(a)(29) of the Code.
9.24 Interim Bankruptcy Court Order; Final Bankruptcy Court
Order; Administrative Expense Claim Priority. (a) None of the Borrower
or any of its Subsidiaries shall at any time seek or consent to any
modification, stay, vacation or amendment of the Interim Bankruptcy
Court Order or the Final Bankruptcy Court Order, as the case may be,
except for modifications and amendments mutually agreed to by the
Majority Lenders, the Borrower and the Agent.
(b) Neither the Borrower nor any of its Subsidiaries shall at
any time seek or consent to a priority for any administrative expense
claim or unsecured claim against the Borrower or any of its Subsidiaries
(now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense claim of the
kind specified in Section 507(b) of the Bankruptcy Code) equal or
superior to the priority of the Lenders and the Agent in respect of the
Obligations, except for the Carve-Out Expenses.
9.25 Supplemental Disclosure. From time to time as may be
necessary (in the event that such information is not otherwise delivered
by the Borrower to the Agent and the Lenders pursuant to this
Agreement), the Borrower will promptly supplement or amend each Schedule
or representation herein with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Schedule or as
an exception to such representation or which is necessary to correct any
information in such Schedule or representation which has been rendered
inaccurate thereby in any material respect. No such supplement shall
cure any Event or Event of Default arising from any misrepresentation
being corrected, unless such supplement has been approved in writing by
the Agent and the Majority Lenders.
9.26 Further Assurances. The Borrower shall execute and
deliver, or cause to be executed and delivered, to the Agent and the
Lenders such documents and agreements, and shall take or cause to be
taken such actions, as the Agent and/or any Lender may, from time to
time, reasonably request to carry out the terms and conditions of this
Agreement and the other Loan Documents.
10. CONDITIONS OF LENDING.
10.1 Conditions Precedent to Revolving Loans on the Closing
Date. The obligation of the Lenders to make the Revolving Loans on the
Closing Date or to arrange for the issuance of any Letter of Credit on
the Closing Date is subject to the following conditions precedent having
been satisfied on or prior to the Closing Date in a manner satisfactory
to the Agent (unless waived by the Majority Lenders):
(a) Representations and Warranties; Covenants; Events. Each
Loan Party's representations and warranties contained in this Agreement
and the other Loan Documents shall be correct and complete in all
material respects as of the Closing Date; each Loan Party shall have
performed and complied with all covenants, agreements, and conditions
contained herein and in the other Loan Documents which are required to
have been performed or complied with on or before the Closing Date; and
there shall exist no Event or Event of Default on the Closing Date.
(b) Delivery of Documents. The Borrower shall have
delivered, or caused to be delivered, to the Agent and the Lenders this
Agreement and the other documents listed in Schedule 10.1(b) hereto and
such other documents, instruments and agreements as the Agent or any
Lender shall reasonably request in connection herewith, duly executed by
all parties thereto other than the Agent and/or the Lenders and, in each
instance, in form and substance satisfactory to the Agent, the Lenders
and their respective counsel.
(c) Interim Bankruptcy Court Order. The Interim Bankruptcy
Court Order shall have been entered by the Bankruptcy Court and the
Agent shall have received a copy of same, and such order shall be in
full force and effect and shall not have been reversed, stayed, modified
or amended absent prior written consent of the Agent, the Majority
Lenders, and the Borrower.
(d) Fees. The Borrower shall have paid in full to the Agent
and the Lenders all fees due hereunder to such Persons on or prior to
the Closing Date.
(e) Required Approvals. The Agent and the Lenders shall
have received certified copies of all consents or approvals of the
Bankruptcy Court and any other Public Authority or other Person which
the Agent determines is required in connection with the transactions
contemplated by this Agreement.
(f) No Material Adverse Change. Except as set forth on
Schedule 8.24 and other than as customarily occurs as a result of events
following the commencement of a proceeding under Chapter 11 of the
Bankruptcy Code and the commencement of the Chapter 11 Case, there shall
not have occurred since Septem-
ber 30, 1995 any event or state of facts that could reasonably be
expected to have a Material Adverse Effect and the Agent and the Lenders
shall have received a certificate of the Borrower's chief financial
officer to such effect.
(g) Proceedings. All proceedings to be taken in connection
with the transactions contemplated by this Agreement, the Loan Documents
and other documents, contemplated in connection herewith, shall be
satisfactory in form, scope and substance to the Agent, the Lenders and
their respective counsel.
(h) Opinions of Counsel. The Agent and the Lenders shall
have received such opinions of counsel for the Borrower and its
Subsidiaries as the Agent or any Lender shall request, each such opinion
to be in form, scope and substance satisfactory to the Agent, the
Lenders and their respective counsel.
(i) Evidence of Insurance. The Agent and each Lender shall
have received evidence, in form, scope and substance reasonably
satisfactory to each such Person, of all insurance coverage as required
pursuant to Sections 6.7 and 9.4.
(j) Absence of Litigation. Except as disclosed in Schedule
8.13 hereto and except for the Chapter 11 Case, there shall exist no
action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries pending or threatened before any
court, governmental agency or arbitrator that might reasonably be
expected to have a Material Adverse Effect or that purports to affect
the legality, validity or enforceability of this Agreement or any other
Loan Document or the consummation of the transactions contemplated
hereby and the Agent and the Lenders shall have received a certificate
of the Borrower's chief financial officer to such effect.
(k) Minimum Availability. Giving effect to the Revolving
Loans and Letters of Credit to be made or issued on the Closing Date,
there shall be at least $30,000,000 of Availability (determined as if
the amount of Revolving Loans and Letters of Credit were zero) and the
chief financial officer of the Parent shall deliver a certificate to the
Agent and the Lenders to such effect.
(l) Accounts. The Loan Parties shall have established the
Payment Accounts for depositing their collections and/or proceeds of
Property and the Agent shall have received the Payment Account
Agreements restricting the Loan Parties' access to funds deposited in
such Payment Accounts, each in form and substance acceptable to the
Agent.
(m) Trustee or Examiner. No order shall have been entered
or requested by any Person (i) for appointment of a trustee or examiner
with enlarged powers with respect to the operation of the Borrower's or
any Loan Party's business beyond those set forth in
subsections 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code, or (ii) to
convert the Chapter 11 Case to a Chapter 7 case or to dismiss the
Chapter 11 Case.
(n) Repayment of Pre-Petition Loans. All Pre-Petition
Revolving Loans (including principal, accrued interest and fees) and all
other Obligations then due and payable pursuant to the Pre-Petition Loan
Documents shall have been paid in full with the proceeds of the initial
Loans and the commitment of BankAmerica under the Pre-Petition Loan
Agreement shall have been terminated.
Execution and delivery to the Agent by a Lender of a
counterpart to this Agreement shall be deemed confirmation by such
Lender that (i) all conditions precedent in this Section 10.1 have been
fulfilled to the satisfaction of such Lender and (ii) the decision of
such Lender to execute and deliver to the Agent an executed counterpart
to this Agreement was made by such Lender independently and without
reliance on the Agent or any other Lender as to the satisfaction of any
condition precedent set forth in this Section 10.1.
10.2 Conditions Precedent to Each Revolving Loan and Each
Letter of Credit. The obligation of the Lenders to make each Revolving
Loan or arrange for the issuance of any Letter of Credit on the Closing
Date or on any subsequent date shall be subject to the further
conditions precedent that on and as of any such date:
(a) Notice of Borrowing or Request for Letter of Credit.
With respect to a request for Revolving Loans, the Agent shall have
received a duly executed Notice of Borrowing, or Notice of Conversion,
as the case may be, as and when required pursuant to Section 2.2(b).
With respect to a request for Letters of Credit, the Agent shall have
received a duly executed request for issuance as and when requested
pursuant to Section 2.2A(d)(1).
(b) Representations and Warranties; Defaults. The following
statements shall be true, and the acceptance by the Borrower of any
Revolving Loan and/or the request for any Letter of Credit shall each be
deemed to be a statement to the effect that the following statements are
true, with the same effect as the delivery to the Agent and the Lenders
of a certificate signed by the chief financial officer of the Borrower,
dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in
this Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though
made on and as of such date, except to the extent the Agent and the
Lenders have been notified by the Borrower that any representation or
warranty is not correct and the Majority Lenders have explicitly waived
in writing compliance with such representation or warranty;
(ii) No event has occurred and is continuing, or would
result from such extension of credit, which constitutes an Event or an
Event of Default;
(iii) no order, judgment or decree of any Public
Authority and no law, rule or regulation applicable to the Borrower
shall purport by its terms to enjoin, restrain or otherwise prohibit the
making of such Revolving Loan or issuance of Letter of Credit, as the
case may be; and
(iv) except as set forth on Schedule 8.24 to this
Agreement on the Closing Date and other than as customarily occurs as a
result of events following the commencement of a proceeding under
Chapter 11 of the Bankruptcy Code and the commencement of the Chapter 11
Case, there shall not have occurred since September 30, 1995 any set of
facts or circumstances that could reasonably be expected to result in a
Material Adverse Effect.
(c) No Adverse Litigation. Except as disclosed in Schedule
8.13 hereto on the Closing Date and except for the Chapter 11 Case,
there shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that
might reasonably be expected to have a Material Adverse Effect or that
purports to affect the legality, validity or enforceability of this
Agreement or any other Loan Document or the consummation of the
transactions contemplated hereby or which shall seek to enjoin, restrain
or otherwise adversely affect the making of the Revolving Loan or the
use of proceeds thereof or the issuance of the Letter of Credit, as the
case may be.
(d) Availability. Without limiting clause (b) above, the
amount of the requested Revolving Loan and/or Letter of Credit shall not
be in excess of the Availability at such time.
(e) Other Documents. The Agent shall have received such
other approvals, opinions or documents as the Agent or the Majority
Lenders may reasonably request.
provided, however, that the foregoing conditions precedent are not
conditions to each Lender participating in or reimbursing BankAmerica or
the Agent for such Lender's Pro Rata Share of any Revolving Loan deemed
to be made pursuant to Section 4.2(b), BankAmerica Revolving Loan or
Agent Advance.
11. DEFAULT; REMEDIES.
11.1 Events of Default. It shall constitute an event of
default ("Event of Default") if any one or more of the following shall
occur for any reason:
(a) any failure to make payment of principal, interest, fees
or premium on any of the Obligations when due;
(b) any representation or warranty made by any Loan Party in
this Agreement, any of the other Loan Documents, any Financial
Statement, or any certificate furnished by the Borrower or any
Subsidiary thereof in connection with any of the foregoing at any time
to the Agent or any Lender shall prove to be untrue in any material
respect as of the date when made or furnished;
(c) (i) any default shall occur in the observance or
performance by the Parent or any of its Subsidiaries of any of the
covenants and agreements contained in Section 6.1, 6.2, 6.6, 6.10,
7.3(a), 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13, 9.15, 9.16, 9.18,
9.19, 9.20 or 9.24 of this Agreement;
(ii) any default shall occur in the observance or
performance by the Parent or any of its Subsidiaries of any of the
covenants and agreements contained in Section 7.2, 7.3(d) or 7.3(h) of
this Agreement and such default shall continue for two (2) days after
such default first occurs; or
(iii) any default shall occur in the observance or
performance by the Parent or any of its Subsidiaries of any of the
covenants and agreements contained in this Agreement, any other Loan
Documents, or any other agreement entered into at any time to which the
Borrower or any Subsidiary and the Lender are party (other than as set
forth in clauses (a), (b), (c)(i) and (c)(ii) above) and such default
shall continue for five (5) days after the earlier of (i) written notice
of default being given to the Borrower by the Agent and (ii) a
responsible officer of the Borrower obtaining knowledge of such default,
or if any such agreement or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written
consent of the Agent) or become void or unenforceable without the
written consent of the Agent;
(d) any default by the Borrower or any Subsidiary under any
agreement or instrument (other than an agreement or instrument
evidencing the lending of money) entered into after the Filing Date (or
assumed on or after the Filing Date or effective thereafter in
accordance with applicable law), which default continues for twenty (20)
days after such default first occurs and which default could reasonably
be expected to have a Material Adverse Effect; provided, however, that
such grace period shall not apply, and an Event of Default shall exist
promptly upon such default, if (i) parties other than the Agent commence
to pursue remedies against the Borrower or such Subsidiary, or (ii) such
default may not, in the Agent's reasonable determination, be cured by
the Borrower or such Subsidiary during such twenty (20) day grace
period;
(e) any default by the Borrower or any Subsidiary in any
payment of principal of or interest on any indebtedness (other than the
Obligations) for borrowed money of greater than $1,000,000 under an
agreement entered into after the Filing Date (or assumed on or after the
Filing Date or effective thereafter in accordance with applicable law)
(including, without limitation, any guarantee thereof) beyond any period
of grace provided with respect thereto or in the performance of any
other agreement, term or condition contained in any agreement under
which any such obligation is created if the effect of such default is to
cause, or permit the holder or holders of such obligation to cause, such
obligation to become due prior to its stated maturity, unless in each
instance any such default is unconditionally waived in writing by the
necessary party and such written waiver is in form and substance
satisfactory to the Agent;
(f) there occurs any loss, theft, damage or destruction of
any item or items of Property of the Borrower or any Subsidiary thereof
(i) which could reasonably be expected to have a Material Adverse
Effect; or (ii) which is in an amount in excess of $5,000,000 and is not
adequately covered by insurance;
(g) any event or condition shall occur or exist with respect
to a Plan that could in the judgment of the Majority Lenders reasonably
be expected to subject the Borrower or any Subsidiary to any tax,
penalty or other liabilities under ERISA or the Code, which in each
instance could have a Material Adverse Effect;
(h) except as set forth on Schedule 8.24 and other than as
customarily occurs as a result of events following the commencement of a
proceeding under Chapter 11 of the Bankruptcy Code and the commencement
of the Chapter 11 Case, there occurs any Material Adverse Effect;
(i) with respect to any Loan Party, an order with respect to
the Chapter 11 Case of such Loan Party shall be entered by the
Bankruptcy Court, (i) appointing a trustee or (ii) appointing an
examiner with enlarged powers relating to the operation of the
Borrower's or any Loan Party's business beyond those set forth in sub-
sections 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code;
(j) an order with respect to the Chapter 11 Case shall be
entered by the Bankruptcy Court converting such Chapter 11 Case to a
Chapter 7 case, dismissing such Chapter 11 Case or terminating such
Chapter 11 Case;
(k) an order shall be entered by the Bankruptcy Court
confirming a plan of reorganization in the Chapter 11 Case which does
not contain a provision for termination of all of the Lenders'
Commitments and payment in full in cash of all Obligations and the cash
collateralization of all Letters of Credit in a manner satisfactory to
the Agent and the Lenders on or before the effective date of such plan
or plans;
(l) an order shall be entered by the Bankruptcy Court
dismissing the Chapter 11 Case which does not contain a provision for
termination of all of the Lenders' Commitments and payment in full in
cash of all Obligations and the cash collateralization of all Letters of
Credit in a manner satisfactory to the Agent and the Lenders;
(m) an order with respect to the Chapter 11 Case shall be
entered and is not stayed pending appeal with respect to the Chapter 11
Case, in each case without the express prior written consent of the
Agent and the Majority Lenders, (i) to revoke, reverse, stay, modify,
supplement or amend the Interim Bankruptcy Court Order or the Final
Bankruptcy Court Order, as the case may be, or (ii) to permit any admin-
istrative expense claim or any claim (now existing or hereafter arising,
of any kind or nature whatsoever) to have administrative priority as to
the Borrower or any of its Subsidiaries equal or superior to the
priority of the Lenders and the Agent in respect of the Obligations,
except for allowed administrative expense claims having priority over
the Obligations to the extent set forth in the definition of the term
"Agreed Administrative Expense Claim Priorities," or (iii) to grant or
permit the grant of a Lien on any Property, other than Permitted Liens;
(n) an application for any of the orders described in clause
(i), (j), (k), (l) or (m) above shall be made by the Borrower or any
other Person and such application (if made by any Person other than the
Borrower) is not contested by the Borrower in good faith or the relief
requested is granted in an order that is not stayed pending appeal;
(o) an order shall be entered by the Bankruptcy Court that
is not stayed pending appeal granting relief from the automatic stay to
the holder or holders of any Liens on or security interests in any
assets of the Borrower or any Loan Party and (i) the Agent and the
Majority Lenders shall determine that a Material Adverse Effect is
reasonably likely to result from the entry of such order or (ii) the
aggregate value or property subject to such Liens is greater than
$5,000,000;
(p) (i) the Interim Bankruptcy Court Order Date shall not
have occurred on or prior to November 11, 1995 or (ii) the Final
Bankruptcy Court Order Date shall not have occurred on or prior to
January 2, 1996;
(q) any Person files a plan of reorganization in the Chapter
11 Case which does not contain a provision for termination of all
Lenders Commitments, payment in full in cash of all Obligations and the
cash collateralization of all Letters of Credit in a manner satisfactory
to the Agent and the Lenders;
(r) all or any material part of the Property of the Borrower
or any Subsidiary shall be nationalized, expropriated or condemned,
seized or otherwise appropriated, or custody or control of such Property
or of the Borrower or any Subsidiary shall be assumed by any Public
Authority or any court of competent jurisdiction at the instance of any
Public Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;
(s) one or more final judgments entered after the Filing
Date for the payment of money aggregating in excess of $1,000,000
(whether or not covered by insurance) shall be rendered against the
Borrower or any Subsidiary and the Borrower or such Subsidiary shall
fail to discharge the same within twenty (20) days from the date of
notice of entry thereof or to appeal therefrom and a stay of execution
shall not then be in effect pending determination of such appeal; or
(t) a Change of Control occurs.
11.2 Remedies. If an Event of Default exists, the Agent may,
in its discretion, and at the direction of the Majority Lenders shall,
without notice to or demand on the Borrower or any Loan Party and
without further order of the Bankruptcy Court, do one or more of the
following at any time or times and in any order: (i) reduce the amount
of or refuse to make Revolving Loans, refuse to arrange for the issuance
of Letters of Credit and/or reduce the Availability; (ii) terminate this
Agreement and/or the Commitments of the Lenders; (iii) declare any or
all Obligations to be immediately due and payable; (iv) apply any funds
at any time in any Payment Account or otherwise in the possession of the
Agent or any Affiliate of the Agent to the payment, in whole or in part,
of the Obligations (including the cash collateralization of all Letters
of Credit in a manner satisfactory to the Agent); and (v) pursue its
other rights and remedies under the Loan Documents and applicable law.
The foregoing shall not be construed to limit the discretion of the
Agent or any Lender to take the actions described in clause (i) at any
other time.
12. TERM AND TERMINATION.
This Agreement shall terminate on the Termination Date. The
Borrower may terminate this Agreement at any time if: (a) it gives the
Agent and the Lenders at least thirty (30) days' prior written notice of
termination by registered or certified mail and (b) it pays and performs
all Obligations on or prior to the effective date of termination and all
Letters of Credit are canceled on or prior to the effective date of
termination. The Agent or the Majority Lenders may terminate this
Agreement upon an Event of Default and shall give the Borrower notice of
such termination. Upon the effective date of termination of this
Agreement for any reason whatsoever, all Obligations shall become
immediately due and payable. Notwithstanding the termination of this
Agreement, until all Obligations are paid and performed in full, the
Agent and the Lenders shall retain all of their respective rights and
remedies hereunder. Upon the indefeasible payment in full of all
Obligations and the termination of this Agreement, the Agent shall, at
the Borrower's cost and expense, execute and deliver to the Borrower
such releases and terminations as the Borrower may reasonably request to
evidence the payment in full of the Obligations.
13. WAIVER, AMENDMENTS; ASSIGNMENTS; SUCCESSORS.
13.1 No Waiver. Failure by the Agent or any Lender to
exercise any right, remedy or option under this Agreement or any present
or future supplement thereto, or in any other agreement between or among
the Loan Parties and the Agent and/or any Lender, or delay by the Agent
or any Lender in exercising the same, will not operate as a waiver
thereof. No waiver by the Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No
waiver by the Agent or any Lender on any occasion shall affect or
diminish the Agent's or any Lender's right thereafter to require strict
performance by the Loan Parties of any provision of this Agreement. The
Agent's and each Lender's rights and remedies under this Agreement will
be cumulative and not exclusive of any other right or remedy which the
Agent or any Lender may have.
13.2 Amendments and Waivers. No amendment or modification of
any provision of this Agreement shall be effective without the written
agreement of the Majority Lenders and the Borrower, and no termination
or waiver of any provision of this Agreement, or consent to any
departure by the Borrower therefrom, shall in any event be effective
without the written concurrence of the Majority Lenders, which the
Majority Lenders shall have the right to grant or withhold at their sole
discretion. Notwithstanding the immediately preceding sentence, any
amendment, modification, or waiver of (a) any provision of Article 2,
2A, 3, or 4, which amendment, modification or waiver relates solely to
any increase of the Commitments, extending the Termination Date,
deferring the date for payment of interest or fees, the reduction of the
interest rates applicable to any Revolving Loans or the Letters of
Credit and/or the amount of fees payable hereunder (other than fees
payable to the Agent solely for its account), shall be effective if, and
only if, evidenced by a writing signed by all Lenders and the Borrower,
(b) the definitions of "Majority Lenders" and "Pro Rata Share", shall be
effective only if evidenced by a writing signed by all Lenders and the
Borrower, (c) the definition of Availability or (d) Section 4.2(c)
and/or Section 6.1 shall only be effective if evidenced by a writing
signed by all Lenders and the Borrower and (e) the provisions contained
in this Section 13.2 shall be effective only if evidenced by a writing
signed by all Lenders; and no amendment, modification, termination, or
waiver of any provision of Article 14 or any other provision referring
to the Agent shall be effective without the written concurrence of the
Agent. The Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on the Borrower or any other
Loan Party in any case shall entitle the Borrower or any other Loan
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent effected
in accordance with this Section 13.2 shall be binding on the Agent and
each Lender, each future Agent and Lender, and, if signed by the
Borrower, on the Borrower, the Loan Parties and the Guarantors.
13.3 Assignments; Participations. (a) Each Lender shall
have the right, with the Agent's consent, at any time to assign to one
or more commercial banks or other financial institutions all or a
portion of its Commitment (including, without limitation, regarding
Letters of Credit) and the Revolving Loans owing to it; provided,
however, that (i) each such assignment shall be a constant, and not a
varying, percentage of all of the assigning Lender's corresponding
rights and obligations under this Agreement (including, without
limitation, with respect to the Letters of Credit) and the assignment
shall apply the same percentage to such Lender's Commitment and
Revolving Loans, (ii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in substantially the form
attached hereto as Exhibit J]("Assignment and Acceptance"), and with a
processing and recordation fee of $2,500, and (iii) any assignee shall
be (x) a Lender or Affiliate of a Lender or (y) a commercial bank or
other financial institution which has combined capital, surplus and
undivided profits of not less than $100,000,000. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall
be at least two (2) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, shall have such rights and obligations
and (B) the assigning Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall
cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Loan Document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Borrower or the performance or observance by the Borrower of any of
its obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(c) The Agent shall maintain at its address set forth in
Section 15.9 a copy of each Assignment and Acceptance delivered to and
accepted by it and books and records, including computer records, in
which it shall promptly record the names and addresses of the Lenders
and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries on the Register
shall constitute rebuttably presumptive evidence, absent manifest error
but subject to the Borrower's right to review under Section 5, of the
accuracy of the information contained therein, and the Borrower, the
Agent and the Lenders may treat each Person the name of which is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, the Agent shall, if it
consents to the contemplated assignment as contemplated under Section
13.3(a) and if such Assignment and Acceptance has been completed and is
in substantially the form attached hereto as Exhibit J, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein
in the Register, and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may, with the Agent's consent, grant
participations in all or any part of its rights and obligations under
this Agreement (including, without limitation, all or any part of its
Commitment (including, without limitation, regarding Letters of Credit)
or the Revolving Loans, as applicable) to one or more other Persons;
provided, however: that (i) any such disposition shall not, without the
consent of the Borrower, require the Borrower to file a registration
statement with the Securities and Exchange Commission or apply to
qualify the Loans under the blue sky law of any state; (ii) such Lender
shall make and receive all payments for the account of its participants
and shall retain exclusively, and shall continue to exercise
exclusively, all rights of approval and administration available
hereunder with respect to such Lender's Commitment and Pro Rata Share of
the Revolving Loans, as applicable, even after giving effect to the sale
of any such participation, and such Lender shall make such arrangements
with its participants as may be necessary to accomplish the foregoing;
and (iii) any such disposition shall be to (x) a Lender or an Affiliate
of a Lender, or (y) a commercial bank or other financial institution
which has combined capital, surplus and undivided profits of not less
than $100,000,000. Notwithstanding anything to the contrary in the
foregoing sentence, any participant may be given the right to require
the Lender granting such participant's participation to vote against any
amendment, modification or waiver of any provision of Article 2, 2A, 3
or 4, relating to the principal amount of the Revolving Loans, the
maturity dates of the Revolving Loans, the interest rates borne by the
Revolving Loans and the Letters of Credit and the amounts of any fees
payable under Sections 3.3, 3.4 and 3.6. No holder of a participation in
all or any part of the Loans shall be a "Lender" for any purpose under
this Agreement; provided, however, that each holder of a participation
shall have the rights of a Lender (including any right to receive
payment) under Sections 2.7, 14.5 and 15.8; provided, further, that all
requests for any such payments shall be made by participation through
the Lender granting such participation. The right of each holder of a
participation to receive payment under Sections 2.7, 14.5 and 15.8 shall
be limited to the lesser of (i) the amounts actually incurred by such
holder for which payment is provided under such Sections and (ii) the
amounts that would have been payable under such Sections by the Borrower
to the Lender granting the participation to such holder had such
participation not been granted.
(f) It is expressly agreed that, in connection with
prospective offers for the sale and transfer of any assignment or any
participation pursuant to this Section 13.3, subject to Section 13.3(h),
each Lender may provide to such prospective assignees and participants
such information pertaining to the Borrower and its Subsidiaries as such
Lender may deem appropriate, including, without limitation, any
information previously furnished to such Lender by the Borrower on a
confidential basis.
(g) Notwithstanding the foregoing provisions of this Section
13.3, each Lender may at any time sell, assign, transfer, or negotiate
all or any part of its rights and obligations under this Agreement to
any Affiliate of such Lender.
(h) Each Lender agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" by the Borrower and provided to
it by the Borrower or any Subsidiary of the Borrower, or by the Agent on
the Borrower's or such Subsidiary's behalf, in connection with this
Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement;
except to the extent that the Borrower consents in writing to such
disclosure or that such information (i) was or becomes generally
available to the public other than as a result of a disclosure by the
Agent or any Lender, or (ii) was or becomes available on a non-
confidential basis from a source other than the Borrower or a Subsidiary
of the Borrower, provided that such source is not bound by a written
confidentiality agreement with the Borrower or a Subsidiary of the
Borrower actually known to the Agent or such Lender, or (iii) was
available to the Agent or such Lender on a non-confidential basis prior
to its disclosure to the Agent or the Lender by the Borrower or a
Subsidiary of the Borrower; provided further, however, that the Agent
and any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Public Authority to which the Agent
or such Lender is subject; (B) pursuant to subpoena or other similar
legal process (provided, however, that Lenders shall make reasonable
efforts (if permitted under applicable law) to give the Parent prompt
written notice of such subpoena or requirement and shall make such
disclosure only to the extent its counsel has advised that such
disclosure is necessary under applicable law); (C) when required to do
so in accordance with the provisions of any applicable requirement of
law (provided, however, that Lenders shall make reasonable efforts (if
permitted under applicable law) to give the Parent prompt written notice
of such requirement and shall make such disclosure only to the extent
its counsel has advised that such disclosure is necessary under
applicable law); (D) to the extent reasonably required in connection
with any litigation or proceeding to which the Agent, any Lender or
their respective Affiliates may be party (provided, however, that
Lenders shall make reasonable efforts (if permitted under applicable
law) to give the Parent prompt written notice of such subpoena or
requirement and shall make such disclosure only to the extent its
counsel has advised that such disclosure is necessary under applicable
law); (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; and
(F) to such Person's outside auditors, counsel, consultants, appraisers
and other professional advisors, subject to the provisions of this
Section 13.3(h). Notwithstanding the foregoing, the Borrower authorizes
each Lender to disclose to any participant or assignee (each, a
"Transferee") and to any prospective transferee, such financial and
other information in such Lender's possession concerning the Borrower or
its Subsidiaries which has been delivered to Agent or any Lender
pursuant to this Agreement or which has been delivered to the Agent or
any Lender by the Borrower or any Subsidiary thereof in connection with
the credit evaluation by any Lender of the Borrower prior to entering
into this Agreement; provided that, unless otherwise agreed by the
Borrower, such Transferee agrees in writing to such Lender to keep such
information confidential to the same extent required of the Lenders
hereunder. The Loan Parties agree to cooperate with Agent and
BankAmerica in order to effectuate the syndication of the Commitment
under this Agreement and to do all acts reasonably requested by the
Agent and BankAmerica in connection therewith (including attendance at
syndication meetings and preparation of offering memoranda, but
specifically excluding any federal securities laws filings or State
"blue-sky" filings).
14. THE AGENT.
14.1 Appointment. Each Lender hereby designates and appoints
BankAmerica as its Agent under this Agreement and the other Loan
Documents, and each Lender hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such on the
express conditions contained in this Article 14. The provisions of this
Article 14 are solely for the benefit of the Agent and the Lenders, and
the Borrower and its Subsidiaries shall not have any rights as a third
party beneficiary of any of the provisions hereof (other than as
expressly set forth in Section 14.7). In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the
Borrower or any of its Subsidiaries. The Agent may perform any of its
duties under this Agreement, or under the other Loan Documents, by or
through its agents or employees.
14.2 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or
in the other Loan Documents. Except as expressly provided herein, the
Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or
taking or refraining from taking any action which the Agent is expressly
entitled to take or assert under this Agreement and the other Loan
Documents, including, without limitation, (a) the determination of the
applicability of the ineligibility criteria with respect to the
calculation of the Availability, (b) the making of Agent Advances and
(c) the right to elect remedies under Section 11.2, and any action so
taken or not taken shall be deemed consented to by the Lenders. The
Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender. Nothing in this Agreement or any
of the other Loan Documents, express or implied, is intended to or shall
be construed to impose upon the Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set
forth therein. Each Lender shall make its own independent investigation
of the financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of the
Revolving Loans hereunder and the arrangement of Letters of Credit
hereunder, and shall make its own appraisal of the creditworthiness of
the Borrower and its Subsidiaries, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto,
whether coming into its possession before the date of this Agreement or
at any time or times thereafter; provided, that at the request of any
Lender, the Agent shall request information of the Borrower on behalf of
such Lender to the extent that such Lender does not independently have
the right to make such request of the Borrower. The Agent shall
promptly notify each Lender any time that the Majority Lenders have
instructed the Agent to act or refrain from acting pursuant hereto. The
Agent may employ agents and attorneys-in-fact and shall not be
responsible to the Lenders or the Borrower and its Subsidiaries, for the
gross negligence or willful misconduct of any such agents or attorneys-
in-fact selected by it with reasonable care.
14.3 Rights, Exculpation, Etc. Neither the Agent nor any of
its officers, counsel, directors, employees or agents shall be liable to
any Lender for any action taken or omitted by it or any of them under
this Agreement or under any of the other Loan Documents, or in
connection herewith or therewith, except that (i) the Agent shall be
obligated on terms set forth herein for performance of its express
obligations under this Agreement, (ii) the Agent shall not be entitled
to exercise any of the powers granted to it under this Agreement in a
manner inconsistent with its express obligations to the Lenders under
this Agreement and (iii) no Person shall be relieved of any liability
imposed by law for willful misconduct or intentional tort. The Agent
shall not be liable for any apportionment or distribution of payments
made by it in good faith pursuant to Section 4.2(d), and if any such
apportionment or distribution is subsequently determined to have been
made in error, the sole recourse of any Lender to whom payment was due
but not made shall be to recover from other Lenders any payment in
excess of the amount to which they are determined to have been entitled.
The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties contained in this Agreement or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the other
Loan Documents or any of the transactions contemplated thereby, or for
the financial condition of the Borrower. The Agent shall not be
required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Agreement or any of the other Loan Documents or the financial condition
of the Borrower or any of its Subsidiaries, or the existence or
possible existence of any Event or Event of Default; provided, that at
the request of any Lender, the Agent shall request information of the
Borrower on behalf of such Lender to the extent that such Lender does
not independently have the right to make such request of the Borrower.
The Agent may at any time request instructions from the Lenders or
Majority Lenders with respect to any actions or approvals which by the
terms of this Agreement or of any of the other Loan Documents the Agent
is permitted or required to take or to grant, and if such instructions
are promptly requested, the Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not
be under any liability whatsoever to any Person for refraining from any
action or withholding any approval under any of the Loan Documents until
it shall have received such instructions from the Lenders or Majority
Lenders, as applicable. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting under this Agreement or any of
the other Loan Documents in accordance with the instructions of the
Lenders or Majority Lenders, as applicable.
14.4 Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person, and
with respect to all matters pertaining to this Agreement or any of the
other Loan Documents and its duties hereunder or thereunder, upon advice
of counsel selected by it.
14.5 Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse
and indemnify the Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs (including, without limitation, Attorney Costs), expenses,
advances or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by the Agent under this
Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, Agent Advances,
provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements resulting
from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Section 14.5 shall survive the
resignation of the Agent pursuant to Section 14.7, the payment in full
of the Revolving Loans and the termination of this Agreement.
14.6 Agent in Individual Capacity. BankAmerica 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 Borrower and Affiliates as though BankAmerica
were not the Agent hereunder, and without notice to or the consent of
the other Lenders. The Lenders acknowledge that, pursuant to such
activities, BankAmerica or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may
be subject to confidentiality obligations in favor of the Borrower or
any Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to this
Commitment and the Revolving Loans made by it, BankAmerica shall have
the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Agent.
14.7 Successor Agent. (a) The Agent may resign from the
performance of all of its functions and duties under this Agreement at
any time by giving at least thirty (30) Business Days' prior written
notice to the Borrower and each Lender. Such resignation shall take
effect upon the earlier of (i) acceptance by a successor Agent of
appointment pursuant to clause (b) or (c) below, (ii) thirty (30)
Business Days following the date of written notice by the Agent to the
Borrower and each Lender pursuant to the immediately preceding sentence.
(b) Upon any such notice of resignation, the Majority
Lenders shall appoint from among the Lenders a successor Agent who shall
be reasonably satisfactory to the Borrower.
(c) If a successor Agent shall not have been so appointed
within such thirty (30) Business Day period, the retiring Agent, with
the consent of the Borrower, shall then appoint a successor Agent who
shall serve as Agent until such time, if any, as the Majority Lenders
shall appoint a successor Agent as provided above. If the Borrower
shall not have consented to the appointment by the retiring Agent of a
successor Agent pursuant to the immediately preceding sentence, the
retiring Agent's resignation shall nevertheless become effective and the
Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Majority Lenders shall appoint a successor
Agent.
15. MISCELLANEOUS.
15.1 Cumulative Remedies. The enumeration herein of the
rights and remedies of the Agent and the Lenders is not intended to be
exclusive, and such rights and remedies are in addition to and not by
way of limitation of any other rights or remedies that such Persons may
have under the UCC or other applicable law. The Agent and the Lenders
shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The
exercise of one right or remedy shall not preclude the exercise of any
others, all of which shall be cumulative. The Agent and the Lenders
may, without limitation, proceed directly against the Borrower or any
Guarantor to collect the Obligations.
15.2 Severability. If any provision of this Agreement shall
be prohibited or invalid, under applicable law, it shall be ineffective
only to such extent, without invalidating the remainder of this
Agreement; provided, however, that if the Bankruptcy Court or any other
court of competent jurisdiction shall find any provision hereof to be
invalid or prohibited, the Agent and the Majority Lenders may terminate
this Agreement.
15.3 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF SUCH STATE, EXCEPT
THAT NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY THE LAWS OF ANY
OTHER STATE OR JURISDICTION.
15.4 Intentionally Omitted.
15.5 Waiver of Jury Trial, Etc. THE AGENT, EACH LENDER, THE
BORROWER AND EACH GUARANTOR EACH HEREBY WAIVES TRIAL BY JURY, RIGHTS OF
SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS (OTHER THAN THOSE RIGHTS
OF SETOFF AND COUNTERCLAIMS WHICH COULD NOT, BY REASON OF ANY APPLICABLE
FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN
ANY OTHER ACTION) IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL, OR ANY INSTRUMENT OR
DOCUMENT DELIVERED PURSUANT HERETO OR THERETO, OR ANY OTHER CLAIM OR
DISPUTE HOWSOEVER ARISING, BETWEEN THE BORROWER OR ANY GUARANTOR, ON THE
ONE HAND, AND THE AGENT AND/OR ANY LENDER(S), ON THE OTHER HAND. EACH
OF THE BORROWER AND GUARANTORS CONFIRMS THAT THE FOREGOING WAIVERS WERE
NEGOTIATED AND ARE INFORMED AND FREELY MADE. NO CLAIM MAY BE MADE
AGAINST THE AGENT OR ANY LENDER FOR ANY LOST PROFITS OR OTHER
CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR ANY WRONGFUL CONDUCT
IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED HEREBY, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH; AND EACH OF THE BORROWER AND THE
GUARANTORS HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY SUCH
CLAIM FOR ANY SUCH DAMAGES.
15.6 Survival of Representations and Warranties. All of the
Borrower's and the Guarantors representations and warranties contained
in this Agreement shall survive the execution, delivery and acceptance
thereof by the parties, notwithstanding any investigation by the Agent,
the Lenders or any of their respective agents.
15.7 General Indemnification. (a) The Borrower hereby
indemnifies, defends and holds the Agent and each Lender and their
respective Affiliates, and their respective directors, officers, agents,
employees, counsel and consultants (each, an "Indemnified Party"),
harmless from and against any and all losses, claims, damages,
liabilities, deficiencies, judgments, penalties, costs or expenses
(each, a "Claim"), imposed on, incurred by or asserted against any of
them, whether direct, indirect or consequential arising out of or by
reason of any litigation, investigations, claims, or proceedings
(whether based on any federal, state or local laws or other statutes or
regulations, including, without limitation, securities, environmental,
or commercial laws and regulations, under common law or at equitable
cause, or on contract or otherwise) commenced or threatened, which arise
out of or are in any way based upon the negotiation, preparation,
execution, delivery, enforcement, performance or administration of this
Agreement, any other Loan Document, or any undertaking or proceeding
related to any of the transactions contemplated hereby or any act,
omission to act, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs,
and the fees and expenses of counsel reasonably incurred in connection
with any such litigation, investigation, claim or proceeding. The
Borrower will not, however, be responsible to any Indemnified Party
hereunder for any Claim to the extent that a court having jurisdiction
shall have determined by a final non-appealable judgment that any such
Claim shall have arisen out of or resulted from actions taken or omitted
to be taken by such Indemnified Party which constitute the bad faith or
willful misconduct or gross negligence of such Indemnified Party.
Without limiting the foregoing, if, by reason of any suit or proceeding
of any kind, nature, or description against the Borrower or any
Subsidiary thereof, or by the Borrower, any Subsidiary thereof, or any
other party against the Agent or any Lender, which in the sole
discretion of the Agent or such Lender, as the case may be, makes it
advisable for the Agent or such Lender to seek counsel for protection
and preservation of its liens and security assets, or to defend its own
interest, such expenses and counsel fees shall be allowed to the Agent
or such Lender, as the case may be. The Borrower shall have the right
at any time during which a Claim is pending to select counsel reasonably
acceptable to the applicable Indemnified Party to defend and control the
defense thereof and settle any Claims for which it is an indemnitor
hereunder so long as in any such event (i) the Borrower shall have
stated in a writing delivered to the applicable Indemnified Party that,
as between the Borrower and such Indemnified Party, the Borrower is
responsible to such Indemnified Party with respect to such Claim and
(ii) the applicable Indemnified Party shall have determined, in its
reasonable judgment, that the Borrower has the financial ability to pay
adequately such Claim or has adequate insurance coverage to pay same;
provided, however, that the Indemnified Party (and not the Borrower)
shall, at the expense of the Borrower, be entitled to control the
defense of any Claim for which, in the reasonable opinion of counsel for
the Indemnified Party, there are material defenses available to the
Indemnified Party which are not available to the Borrower. In any other
case, the Indemnified Party shall have the right to select counsel and
control the defense of any Claims; provided, however, that no
Indemnified Party shall settle any Claim as to which it is controlling
the defense without the consent of the Borrower, which consent shall not
be unreasonably withheld or delayed. With respect to any Claim for
which the Borrower is entitled to select counsel, each Indemnified Party
shall have the right, at its expense, to participate in the defense of
such Claim. With respect to any Claim in which any Indemnified Party
shall be entitled to control the defense thereof, the Borrower shall
have the right, at its expense, to participate in the defense of such
Claim. The Indemnified Parties and the Borrower shall cooperate with
each other in all reasonable respects in any investigation, trial or
defense of any such Claim and any appeal arising therefrom.
(b) To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section may be unenforceable because it
is violative of any law or public policy, the Borrower shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all indemnified
matters incurred by Lender and the other Indemnified Parties. The
indemnity under this Section 15.7 shall survive the payment of the
Obligations and the termination of this Agreement. All of the foregoing
costs and expenses referred to in this Section 15.7 shall be part of the
Obligations.
15.8 Fees and Expenses. Whether or not any of the
transactions herein contemplated are consummated and regardless of the
reasons for which such transactions are not consummated, the Borrower
agrees to pay to the Agent (and where expressly provided herein, each
Lender) on demand all costs and expenses that Agent (or, if applicable,
such Lender) pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination
of this Agreement and the other Loan Documents, including, without
limitation: (a) reasonable attorneys' and paralegals' fees and
disbursements of counsel to the Agent and (in connection with the
enforcement and termination of the Loan Documents) each Lender
(including allocated in-house counsel fees and disbursements); (b) costs
and expenses (including reasonable attorneys and paralegals fees and
disbursements) of the Agent and (in connection with the enforcement and
termination of the Loan Documents, each Lender) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) the
Agent's costs and expenses of lien and title searches and title
insurance; (d) sums paid by the Agent or incurred by the Agent to pay
any amount or take any action required of the Borrower under the Loan
Documents that the Borrower fails to pay or take; (e) the Agent's costs
of appraisals, audits, inspections, and verifications of the Property of
any Loan Party, including, without limitation, travel, lodging, and
meals for inspections of the Property of any Loan Party and the
Borrower's operations by the Agent's agents plus the Agent's then
customary charge for field examinations and audits and the preparation
of reports thereof (such charge currently $750 per day (or portion
thereof) for each agent or employee of the Agent with respect to each
field examination or audit); (f) the Agent's costs and expenses of
forwarding loan proceeds, collecting checks and other items of payment
and establishing and maintaining any Payment Accounts and lock boxes;
(g) the Agent's and each Lender's costs and expenses of preserving and
protecting the Property of any Loan Party; and (h) the Agent's and each
Lender's costs and expenses (including attorneys' and paralegals' fees
and disbursements) paid or incurred to obtain payment of the Obligations
and otherwise enforce the provisions of the Loan Documents (including
without limitation, preparations for and consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be paid
by the Borrower.
15.9 Notices. All notices, demands and requests that either
party is required or elects to give to the other shall be in writing,
shall be delivered personally against receipt, or sent by recognized
overnight courier service, or mailed by registered or certified mail,
return receipt requested, postage prepaid, or sent by telecopy, and
shall be addressed to the party to be notified as follows:
If to the Agent or BankAmerica:
BankAmerica Business Credit, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Bank of America National Trust
and Savings Association
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
If to any Lender (other than BankAmerica):
At the address set forth in the Register maintained by the
Agent in accordance with Section 13.3 (c).
If to the Borrower or any other Loan Party:
Edison Brothers Stores, Inc.
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, Xx.
Telecopier: (000) 000-0000
with a copy to:
Edison Brothers Stores, Inc.
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
or to such other address as each party may designate for itself by like
notice. Any such notice, demand, or request shall be deemed given when
received if personally delivered or sent by overnight courier, or three
(3) Business Days after deposited in the United States mails, postage
paid, if sent by registered or certified mail, or when sent, if sent by
telecopy.
15.10 Waiver of Notices. Unless otherwise expressly provided
herein, the Borrower and each other Loan Party waive presentment,
protest and notice of demand or dishonor and protest as to any
instrument, as well as any and all other notices to which it might
otherwise be entitled. No notice to or demand on the Borrower or any
other Loan Party which the Agent or any Lender may elect to give shall
entitle the Borrower or any other Loan Party to any further notice or
demand in the same, similar or other circumstances.
15.11 Binding Effect; Disclosure. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
respective representatives, successors and assigns of the parties
hereto; provided, however, that no interest herein may be assigned by
the Borrower or any Guarantor without the prior written consent of the
Agent and each Lender. The rights and benefits of the Agent and the
Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof. The
Borrower agrees that, subject to the Borrower's prior consent for uses
other than in a traditional tombstone, the Agent and each Lender may use
the Borrower's name in advertising and promotional materials and in
conjunction therewith disclose the general terms of this Agreement.
15.12 Modification. This Agreement and the other Loan
Documents are intended by the Borrower and the Agent and the Lenders to
be the final, complete, and exclusive expression of the agreement
between them as to the subject matter hereof. This Agreement and the
other Loan Documents supersede any and all prior oral or written agree-
ments relating to the subject matter hereof.
15.13 Counterparts. This Agreement may be executed in any
number of counterparts, and by the Agent, each Lender, the Borrower and
each Guarantor in separate counterparts, each of which shall be an
original, but all of which shall together constitute one and the same
agreement.
15.14 Captions. The captions contained in this Agreement are
for convenience only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
15.15 Right of Setoff. Whenever an Event of Default exists,
the Agent and each Lender is hereby authorized at any time and from time
to time, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Person or any affiliate thereof
to or for the credit or the account of the Borrower or any Guarantor
against any and all of the Obligations, whether or not then due and
payable.
15.16 [Intentionally Omitted].
15.17 Liens in Favor of Federal Reserve Board.
Notwithstanding any other provision in this Agreement, any Lender may at
any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal
Reserve Bank, in accordance with Regulation A of the Federal Reserve
Board or U.S. Treasury Regulation 31 CFR section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
15.18 Other Security and Guaranties. The Agent and/or any
Lender may, without notice or demand and without affecting the
Borrower's obligations hereunder, from time to time: (a) take from any
Person and hold collateral for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment
of all or any part of the Obligations and release any such endorser or
guarantor, or any Person who has given any Lien in any other collateral
as security for the payment of all or any part of the Obligations, or
any other Person in any way obligated to pay all or any part of the
Obligations.
15.19 Field Audit and Examination Reports; Disclaimer by
Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit
or examination report (each a "Report" and collectively, "Reports")
prepared by the Agent or any Lender pursuant to Section 6.6 hereof;
(b) expressly agrees and acknowledges that neither
BankAmerica nor the Agent (i) makes any representation or warranty as to
the accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;
(c) expressly agrees and acknowledges that the Reports are
not comprehensive audits or examinations, that the Agent or other party
performing any audit or examination will inspect only specific
information regarding the Borrower and will rely significantly upon the
Borrower's books and records, as well as on representations of the
Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute or use any Report in any other
manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold BankAmerica and the Agent harmless from any action such Lender may
take or conclusion such Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that such
Lender has made or may make to the Borrower, or Lender's participation
in, or Lender's purchase of, a loan or loans of the Borrower; and (ii)
to pay and protect, and indemnify, defend and hold BankAmerica and the
Agent harmless from and against, the claims, actions, proceedings,
damages, costs, expenses and other amounts (including, without
limitation, reasonable attorneys' fees) incurred by BankAmerica and/or
the Agent as the direct or indirect result of any third parties who
might obtain all or part of any Report through such Lender.
15.20 Defaulting Lenders' Rights. (a) Notwithstanding
anything to the contrary contained herein, all rights and obligations
hereunder of each Defaulting Lender and of the other parties hereto
shall be modified to the extent set forth in this Section 15.20 and
Section 4.2(d) so long as such Defaulting Lender remains a Defaulting
Lender.
(b) A Defaulting Lender shall not be entitled to give
instructions to the Agent or to approve, disapprove, consent to or vote
on any matters relating to this Agreement or any Loan Document. All
amendments, waivers and other modifications of this Agreement or any
Loan Document may be made without regard to a Defaulting Lender and, for
purposes of the definition of "Majority Lenders", a Defaulting Lender
shall be deemed not to be a Lender, not to have a Commitment and not to
have Revolving Loans outstanding.
(c) No Commitment of any Lender shall be increased as a
result of any default by a Defaulting Lender and, except for purposes of
voting as described in Section 15.20(b) and without limiting the
provisions of Section 4.2(d), no Lender's Pro Rata Share shall be
affected as a result of any default by a Defaulting Lender. Other than
as expressly set forth in this Section 15.20 or Section 4.2(d), the
rights and obligations of a Defaulting Lender (including the obligation
to indemnify the Agent) and the other parties hereto shall remain
unchanged. Nothing in this Section 15.20 or Section 4.2(d) shall be
deemed to release any Defaulting Lender from its Commitment hereunder,
shall alter such Commitment, shall operate as a waiver of any default by
such Defaulting Lender hereunder, or shall prejudice any rights which
the Borrower, the Agent or any Lender may have against any Defaulting
Lender as a result of any default by such Defaulting Lender hereunder.
(d) In the event the Defaulting Lender is able to
retroactively cure to the satisfaction of the Agent the breach which
caused a Lender to become a Defaulting Lender, such Defaulting Lender
shall no longer be a Defaulting Lender and shall be treated as a Lender
hereunder.
16. GUARANTEES.
Each Guarantor unconditionally guarantees, as a primary
obligor and not merely as a surety, jointly and severally with each
other Guarantor, the due and punctual payment of the principal of and
interest on the Revolving Loans, when and as due, whether at maturity,
by acceleration, by notice or prepayment or otherwise, and the due and
punctual performance of all other Obligations. Each Guarantor further
agrees that the Obligations may be extended and renewed, in whole or in
part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal
of any Obligations.
Each Guarantor waives presentment to, demand of payment from
and protest to the Borrower of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for
nonpayment. The obligations of a Guarantor hereunder shall not be
affected by (a) the failure of the Agent or any Lender to assert any
claim or demand or to enforce any right or remedy against the Borrower
or any other Guarantor under the provisions of this Agreement or any of
the other Loan Documents or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of this
Agreement, any of the other Loan Documents, any guarantee or any other
agreement; (c) the release of any security held by the Agent or any
Lender for the Obligations or any of them; or (d) the failure of the
Agent or any Lender to exercise any right or remedy against any other
Guarantor of the Obligations.
Each Guarantor further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any
right to require that any resort be had by the Lender to any security
(if any) held for payment of the Obligations or to any balance of any
deposit account or credit on the books of the Agent or any Lender in
favor of the Borrower or any other person.
The obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the Agent
or any Lender to assert any claim or demand or to enforce any remedy
under this Agreement or under any other Loan Document, any guarantee or
any other agreement, by any waiver or modification of any provision
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission which
may or might in any manner or to any extent vary the risk of such
Guarantor or otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each Guarantor further agrees that its guarantee shall
continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal or of interest on any
Obligation is rescinded or must otherwise be returned by the Agent or
any Lender upon the bankruptcy or reorganization of the Borrower or
otherwise.
Each Guarantor hereby waives and releases all rights of
subrogation against the Borrower and its property and all rights of
indemnification, contribution and reimbursement from the Borrower and
its property, in each case in connection with this guarantee and any
payments made hereunder, and regardless of whether such rights arise by
operation of law, pursuant to contract or otherwise.
IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
EDISON BROTHERS STORES, INC.,
a Debtor in Possession, as Borrower
and as a Guarantor
By:/s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President
General Council and Secretary
EDISON BROTHERS APPAREL STORES, INC.,
a Debtor in Possession, as Borrower
and as a Guarantor
By:/s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President
General Council and Secretary
EDISON BROTHERS SHOE STORES, INC.
EDISON PAYMASTER, INC.
EDISON BROTHERS REDEVELOPMENT CORPORATION
EDBRO MISSOURI REALTY COMPANY, INC.
EDISON ALABAMA STORES, INC.
EDISON ARKANSAS STORES, INC.
EDISON COLORADO STORES, INC.
EDISON BROTHERS COMPANY
EDISON HAWAII STORES, INC.
EDISON ILLINOIS STORES, INC.
EDISON KANSAS STORES, INC.
EDISON KENTUCKY STORES, INC.
EDISON LOUISIANA STORES, INC.
EDISON MARYLAND STORES, INC.
EDISON MASSACHUSETTS STORES, INC.
EDISON MICHIGAN STORES, INC.
EDISON MINNESOTA STORES, INC.
EDISON MISSISSIPPI STORES, INC.
EDISON NEBRASKA STORES, INC.
EDISON NEW JERSEY STORES, INC.
EDISON NEW MEXICO STORES, INC.
EDISON NEW YORK STORES, INC.
EDISON OHIO STORES, INC.
EDISON OKLAHOMA STORES, INC.
EDISON OREGON STORES, INC.
EDISON PENNSYLVANIA STORES, INC.
EDISON TENNESSEE STORES, INC.
EDISON TEXAS STORES, INC.
EDISON UTAH STORES, INC.
EDBRO OHIO REALTY, INC.
EBSS-MONTANA, INC.
EBSS-NORTH CENTRAL, INC.
EBSS-INDIANA, INC.
EBSS-IOWA, INC.
EBSS-KANSAS, INC.
EBSS-WISCONSIN, INC.
EBSS-NORTHEAST, INC.
EBSS-SOUTH, INC.
EBSS-MIDEAST, INC.
EBSS-MICHIGAN, INC.
EBSS-EAST, INC.
EBSS-OHIO, INC.
EBSS-PENNSYLVANIA, INC.
EBSS-TEXAS, INC.
EBSS-WEST, INC.
EDISON PUERTO RICO STORES, INC.
EBSCAT, INC.
XXXXXXX CLOTHES, INC.
Z&Z FASHIONS, LTD.
XXXXXXX-ROSSVILLE, INC.
EDISON BROTHERS MALL ENTERTAINMENT, INC.
HORIZON ENTERTAINMENT
TIME-OUT FAMILY AMUSEMENT CENTERS, INC.
TOFAC OF PUERTO RICO, INC.
EDISON BROTHERS STORES INTERNATIONAL, INC.
EDISUR, INC.
EBS HOLDINGS CORP.
SACHA SHOES LTD.
XXXXXX S OF CALIFORNIA
XXXXXX XXXXXXXX WAREHOUSE, INC.
XXXXX XXXXXXXXXX XXX #0, INC.
EDBRO MISSOURI USG #2, INC.
XXXXX XXXXXXXXXX XXX #0, INC.
INDUSTRIAL DESIGN, INC.,
as debtors-in-possession and
as Guarantors
By:/s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President
General Council and Secretary
for all Guarantors
Commitment: $200,000,000
BANKAMERICA BUSINESS CREDIT, INC.,
as Agent and as a Lender
By:/s/Xxxxxx Xxxxxxxxx
Name: Vice President
