CREDIT AGREEMENT
between
PIER 1 IMPORTS, INC.,
as Borrower,
NATIONSBANK, N.A.,
as Administrative Agent,
BANK ONE, TEXAS, N.A., and
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
as Co-Agents,
and
CERTAIN LENDERS,
as Lenders
as arranged by
NATIONSBANC XXXXXXXXXX SECURITIES LLC,
as Lead Arranger
$125,000,000
November 12, 1998
NationsBank
PREPARED BY XXXXXX AND XXXXX, L.L.P.
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND TERMS........................................ 1
1.1 Definitions.................................................. 1
1.2 Time References..............................................12
1.3 Other References.............................................12
1.4 Accounting Principles........................................12
SECTION 2 COMMITMENTS..................................................13
2.1 Revolving Credit Facility....................................13
2.2 Swing Subfacility............................................14
2.3 Competitive-Bid Subfacility..................................15
2.4 Effect of Requests...........................................17
2.5 Termination..................................................17
SECTION 3 TERMS OF PAYMENT.............................................17
3.1 Notes and Payments...........................................17
3.2 Interest and Principal Payments..............................18
3.3 Interest Options.............................................18
3.4 Quotation of Rates...........................................19
3.5 Default Rate.................................................19
3.6 Interest Recapture...........................................19
3.7 Interest Calculations........................................19
3.8 Maximum Rate.................................................19
3.9 Interest Periods.............................................19
3.10 Conversions..................................................20
3.11 Order of Application.........................................20
3.12 Sharing of Payments, Etc. ...................................21
3.13 Discharge and Reinstatement..................................21
3.14 Booking Borrowings...........................................21
3.15 Basis Unavailable or Inadequate for Eurodollar Rate..........21
3.16 Additional Costs.............................................22
3.17 Change in Legal Requirements.................................23
3.18 Funding Loss.................................................23
3.19 Foreign Lenders, Participants, and Assignees.................23
SECTION 4 FEES.........................................................23
4.1 Treatment of Fees............................................23
4.2 Fees to Administrative Agent and Arranger....................23
4.3 Commitment Fee...............................................24
4.4 Up-front Fee.................................................24
SECTION 5 GUARANTIES...................................................24
SECTION 6 CONDITIONS PRECEDENT.........................................24
SECTION 7 REPRESENTATIONS AND WARRANTIES...............................24
7.1 Purpose and Regulation U.....................................24
7.2 Companies....................................................24
7.3 Organization and Good Standing...............................25
7.4 Authorization and Power......................................25
7.5 Conflicts or Consents........................................25
7.6 Enforceable Obligations......................................25
7.7 Liens........................................................25
7.8 Financial Condition..........................................25
7.9 Full Disclosure..............................................25
7.10 Default......................................................25
7.11 Litigation...................................................25
7.12 Regulatory Defects...........................................25
7.13 Taxes........................................................26
7.14 ERISA........................................................26
7.15 Compliance...................................................26
7.16 Government Regulation........................................26
7.17 Insider......................................................26
7.18 Environmental Matters........................................26
7.19 Labor Matters................................................26
7.20 Intellectual Property........................................27
7.21 Y2K Issue....................................................27
SECTION 8 AFFIRMATIVE COVENANTS........................................27
8.1 Certain Items Furnished......................................27
8.2 Use of Credit................................................28
8.3 Y2K Issue....................................................28
8.4 Maintain Books and Reserves..................................28
8.5 Inspection of Property.......................................28
8.6 Compliance with Laws, Etc....................................28
8.7 Maintenance of Existence and Qualifications..................29
8.8 Maintenance of Properties; Insurance.........................29
8.9 Primary Business.............................................29
8.10 Transactions With Affiliates.................................29
8.11 Compliance with Material Agreements..........................29
8.12 Operations and Properties....................................29
8.13 Access and Inspection........................................29
8.14 Additional Guaranties........................................30
8.15 Further Assurances...........................................30
8.16 Expenses.....................................................30
8.17 INDEMNIFICATION..............................................30
SECTION 9 NEGATIVE COVENANTS...........................................31
9.1 Payroll Taxes................................................31
9.2 Restricted Payments..........................................31
9.3 Lien.........................................................31
9.4 Subsidiary Debt..............................................32
9.5 Guaranteed Debt..............................................32
9.6 Sales of Assets..............................................32
9.7 Mergers and Consolidations...................................33
9.8 Employee Plans...............................................33
9.9 Assignment...................................................33
9.10 Accounting Methods...........................................33
9.11 Change in Nature of Business.................................33
9.12 Government Regulations.......................................33
SECTION 10 FINANCIAL COVENANTS..........................................33
10.1 Tangible-Net Worth...........................................33
10.2 Current Ratio................................................33
10.3 Leverage Ratio...............................................33
10.4 Fixed-Charge Coverage........................................33
SECTION 11 EVENTS OF DEFAULT............................................33
11.1 Payment of Obligation........................................34
11.2 Covenants....................................................34
11.3 Debtor Relief................................................34
11.4 Judgments and Attachments....................................34
11.5 Government Action............................................34
11.6 Misrepresentation............................................34
11.7 Ownership of Restricted Companies............................34
11.8 Change of Control of Borrower................................34
11.9 Other Obligations............................................35
11.10 SEC Reporting Requirements...................................35
11.11 Validity and Enforceability..................................35
SECTION 12 RIGHTS AND REMEDIES......................................... 35
12.1 Remedies Upon Event of Default...............................35
12.2 Company Waivers..............................................36
12.3 Performance by Administrative Agent..........................36
12.4 Not in Control...............................................36
12.5 Course of Dealing............................................36
12.6 Cumulative Rights............................................36
12.7 Application of Proceeds......................................36
12.8 Certain Proceedings..........................................36
12.9 Expenditures by Lenders......................................37
12.10 Limitation of Liability......................................37
SECTION 13 ADMINISTRATIVE AGENT AND LENDERS.............................37
13.1 Administrative Agent.........................................37
13.2 Expenses.....................................................38
13.3 Proportionate Absorption of Losses...........................38
13.4 Delegation of Duties; Reliance...............................39
13.5 Limitation of Administrative Agent's Liability...............39
13.6 Event of Default.............................................40
13.7 Limitation of Liability......................................40
13.8 Relationship of Lenders......................................40
13.9 Co-Agents....................................................40
13.10 Benefits of Agreement........................................40
SECTION 14 MISCELLANEOUS................................................40
14.1 Nonbusiness Days.............................................40
14.2 Communications...............................................40
14.3 Form and Number..............................................41
14.4 Exceptions...................................................41
14.5 Survival.....................................................41
14.6 Governing Law................................................41
14.7 Invalid Provisions...........................................41
14.8 Amendments, Supplements, Waivers, Consents, and Conflicts....41
14.9 Counterparts.................................................42
14.10 Parties......................................................42
14.11 Venue, Service of Process, and Jury Trial....................44
14.12 Entirety.....................................................44
SCHEDULES AND EXHIBITS
----------------------
Schedule 1.1 - Fiscal-Month Ends
Schedule 2 - Lenders and Commitments
Schedule 6 - Closing Documents
Schedule 7.2 - Companies
Schedule 9.3 - Existing Liens
Exhibit A-1 - Ratable Note
Exhibit A-2 - Swing Note
Exhibit A-3 - Master Competitive-Bid Note
Exhibit B - Guaranty
Exhibit C-1 - Borrowing Request
Exhibit C-2 - Conversion Notice
Exhibit C-3 - Competitive-Bid Request
Exhibit C-4 - Notice of Competitive-Bid Request
Exhibit C-5 - Competitive Bid
Exhibit D - Compliance Certificate
Exhibit E - Opinion of Counsel to Companies
Exhibit F - Assignment and Assumption Agreement
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of November 12, 1998 between PIER 1
IMPORTS, INC., a Delaware corporation ("Borrower"), Lenders (defined below),
NATIONSBANK, N.A., as Administrative Agent for Lenders, and BANK ONE, TEXAS,
N.A., and XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as Co-Agents for
Lenders.
Borrower has requested that Lenders extend credit to Borrower not to
exceed a total outstanding principal amount of $125,000,000 (as that amount
may be reduced or cancelled under Section 2.5 and other provisions of this
agreement) to be used by Borrower as provided in Section 7.1 and to be funded
by Lenders from time to time in a combination of Ratable Borrowings, Swing
Borrowings, and Competitive-Bid Borrowings (as described below). Lenders are
willing to extend the requested credit on the terms and conditions of this
agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrower,
Lenders, and Administrative Agent agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 Definitions. As used in the Credit Documents:
"Actual-Termination Date" means the earlier of either (a) the Stated-
Termination Date or (b) the effective date that Lenders' commitments to lend
under this agreement are fully cancelled or terminated.
"Administrative Agent" means, at any time, NationsBank, N.A. (or its
successor appointed under Section 13), acting as administrative, managing,
and syndication agent for Lenders under the Credit Documents.
"Advance Deficiency" is defined in Section 2.1(d).
"Affiliate" of a Person means any other individual or entity who (a)
directly or indirectly controls, is controlled by, or is under common control
with that Person or (b) holds or beneficially owns 5% or more of any class of
voting securities of that Person. For purposes of this definition (i)
"control" means the power, direct or indirect, of one Person to direct or
cause direction of the management and policies of another, whether by
contract, through voting securities, or otherwise, (ii) no Person shall be
deemed to be an Affiliate of another solely by reason of that Person being a
participant in a joint operating group or joint undivided ownership group,
and (iii) the Companies are Affiliates of each other.
"Applicable Percentage" means -- for any day and for calculation of the
interest rate for Eurodollar-Rate Borrowings or the fees payable under
Section 4.3, as the case may be -- means (except as provided below) the
lowest percentage determined in accordance with in the following table, based
in each case upon the better of either the Leverage Ratio or Borrower's
conformity with the higher rating established by either S&P or Moody's
applicable to Borrower's senior, unsecured, non-credit-enhanced long-term
indebtedness for borrowed money (the "index debt"), which percentage is
subject to adjustment upward and downward throughout the term of this
agreement.
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Based Upon the Better of Applicable Percentage
--------------------------------- --------------------------
Commitment
Higher of Debt Fees Under
Ratings by Eurodollar-Rate Paragraph
Category Leverage Ratio S&P/Moody's Borrowings 4.3
----------------------------------------------------------------------------
1 N/A BBB/Baa2 or higher 0.400% 0.15%
2 Less than 1.5 to
1.0 BBB-/Baa3 0.500% 0.17%
3 Greater than or
equal to 1.5 to
1.0 but less
than 2.0 to 1.0 BB+/Ba1 0.625% 0.20%
4 Greater than or
equal to 2.0 to
1.0 but less
than 2.5 to 1.0 BB/Ba2 0.750% 0.25%
5 Greater than or
equal to 2.5 to
1.0 but less
than 3.0 to 1.0 BB-/Ba3 1.000% 0.30%
6 Greater than or
equal to 3.0 to
1.0 NA 1.250% 0.35%
(a) As an illustration, a Leverage Ratio of 2.25 is better than
a debt rating of BB-/Ba3, in which event Category 4 in the above table would
be applicable.
(b) The Applicable Percentage in effect at any time (whether in
the middle of an Interest Period or otherwise) is determined with reference
to the Leverage Ratio as reflected in the Current Financials and related
Compliance Certificate then most recently received by Administrative Agent,
effective as of the date received by Administrative Agent.
(c) If Borrower fails to timely furnish to Administrative Agent
any Financials and related Compliance Certificate as required by this
agreement, then Category 6 in the above table is applicable (without regard
to debt ratings) until the date on which Borrower furnishes the required
Financials and related Compliance Certificate to Administrative Agent.
(d) For purposes of determining the Applicable Percentage with
respect to the debt ratings criteria (i) if neither Moody's nor S&P shall
have in effect a rating for index debt (other than by reason of the
circumstances referred to in the last sentence of this clause), then both
such rating agencies will be deemed to have established ratings for index
debt in Category 6 in the above table, (ii) if only one of Moody's or S&P
shall have in effect a rating for index debt, then Borrower and Lenders shall
negotiate in good faith to agree upon another rating agency to be substituted
by an agreement for the rating agency which shall not have a rating in
effect, and, in the absence of such agreement, the Applicable Percentage will
be determined by reference to the available rating, (iii) if the ratings
established by Moody's and S&P shall differ by one Category, then the
Applicable Percentage shall be determined by reference to the numerically
lower Category (for example, if the rating from S&P is in Category 1 and the
rating from Xxxxx'x is in Category 2, then the Applicable Percentage shall be
determined by reference to Category 1), (iv) if any rating established by
Moody's or S&P changes (other than as a result of a change in the rating
system of either Moody's or S&P), that change is effective as of the date on
which that change is first announced by the rating agency making that change,
(v) if the rating system of either Moody's or S&P changes before the payment
in full of the Obligation and the cancellation of all commitments to lend
under this agreement, then Borrower and Lenders shall negotiate in good faith
to amend the references to specific ratings in this definition to reflect
that changed rating system, and (vi) if both Moody's and S&P cease to be in
the business of rating corporate debt obligations, then Borrower and Lenders
shall negotiate in good faith to agree upon a substitute rating agency and to
amend the references to specific ratings in this definition to reflect the
ratings used by that substitute rating agency.
"Arranger" means NationsBanc Xxxxxxxxxx Securities LLC.
"Assignee" is defined in Section 14.10(d).
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"Assignments" is defined in Section 14.10(d).
"Base Rate" means, for any day, the greater of either (a) the annual
interest rate most recently established by Administrative Agent as its
general reference rate (which may not necessarily represent the lowest or
best rate actually charged to any customer) in effect at its principal office
in Dallas, Texas, which may automatically fluctuate upward and downward
without special notice to Borrower or any other Person, or (b) the sum of the
Fed-Funds Rate plus 0.5%.
"Base-Rate Borrowing" means a Borrowing bearing interest at the Base
Rate.
"Borrower" is defined in the preamble to this agreement.
"Borrowing" means any amount disbursed under the Credit Documents by one
or more Lenders to or on behalf of Borrower under the Credit Documents,
either as an original disbursement of funds or a renewal, extension, or
continuation of an amount outstanding.
"Borrowing Date" means the date a Borrowing is funded under this
agreement.
"Borrowing Request" means a request substantially in the form of
Exhibit C-1.
"Business Day" means (a) for purposes of any Eurodollar-Rate Borrowing,
a day when commercial banks are open for international business in London,
England, and (b) for all other purposes, any day other than Saturday, Sunday,
and any other day that state or national banks are lawfully authorized to be
closed in Texas.
"Capital Lease" means any lease or sublease that is required by GAAP to
be capitalized on a balance sheet.
"Closing Date" means the date agreed to by Borrower and Administrative
Agent for the initial Borrowing, which may not be before the conditions
precedent in Section 6 have been satisfied for the initial Borrowing under
this agreement and must be, if at all, a Business Day occurring no later than
November 30, 1998.
"Commitment" means, at any time and for any Lender, the amount stated
beside that Lender's name on the most-recently amended Schedule 2 (which
amount is subject to reduction and cancellation as provided in this
agreement).
"Commitment Percentage" means, for any Lender, the proportion (stated as
a percentage) that its Commitment bears to the total Commitments of all
Lenders.
"Companies" means, at any time, Borrower and each of its Subsidiaries.
"Competitive Bid" means an offer by a Lender to fund a Competitive-Bid
Borrowing substantially in the form of Exhibit C-5.
"Competitive-Bid Borrowing" means any Borrowing under the Competitive-
Bid Subfacility.
"Competitive-Bid Rate" means, as to any Competitive Bid made by a
Lender, (a) in the case of a Eurodollar-Rate Borrowing, the margin which
shall be added to or subtracted from the Eurodollar Rate, and (b) in the case
of a fixed-rate Borrowing, the fixed rate of interest, in each case, offered
by the Lender making that Competitive Bid.
"Competitive-Bid Request" means a request for Competitive Bids
substantially in the form of Exhibit C-3.
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"Competitive-Bid Subfacility" means the subfacility described in, and
subject to the limitations of, Section 2.3.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D and signed by Borrower's chief executive officer, chief
financial officer, treasurer, or assistant treasurer.
"Constituent Documents" means, for any Person, the documents for its
formation and organization, which, for example, for a (a) corporation are its
corporate charter and bylaws, (b) partnership is its partnership agreement,
(c) limited-liability company are its certificate of organization and
regulations, and (d) trust is the trust agreement or indenture under which it
is created.
"Controlled Group" means the "controlled group of corporations" (as
defined in Section 1563 of IRC) or "the group of trades or business under
common control" (as defined in Section 414(c) of IRC) of which Borrower is
part or may become a part.
"Conversion Notice" means a request, subject to Section 3.10,
substantially in the form of Exhibit C-2.
"Credit Documents" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
(b) all agreements, documents, and instruments in favor of Administrative
Agent or Lenders (or Administrative Agent on behalf of Lenders) ever
delivered under this agreement or otherwise delivered in connection with all
or any part of the Obligation, and (c) all renewals, extensions, and
restatements of, and amendments and supplements to, any of the foregoing.
"Current Financials," unless otherwise specified means either (i) the
Companies' consolidated Financials for the year ended February 28, 1998,
together with the Companies' Financials for the six months ended on August
29, 1998, or (ii) at any time after annual Financials are first delivered
under Section 8.1, the Companies' annual Financials then most recently
delivered to Lenders under Section 8.1(a), together with the Companies'
quarterly Financials then most recently delivered to Lenders under Section
8.1(b).
"Debt" means -- for any Company, at any time, and without duplication --
the sum of (a) all obligations for borrowed money (excluding obligations
pursuant to an accounts receivable financing or securitization facility),
plus (b) all obligations to pay the deferred purchase price of property or
services (except trade accounts payable and other trade finance arrangements
arising in the ordinary course of business), plus (c) Capital Leases.
"Debtor Law" means the Bankruptcy Code of the United States of America
and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar Legal Requirements affecting creditors'
Rights.
"Default Condition," in respect of any action or event, means that an
Event of Default or Potential Default exists immediately before, or will
occur as a result of (or otherwise will exist immediately after), the
occurrence of that action or event.
"Default Percentage" means, at any time and for any Lender, the
proportion (stated as a percentage) that the total Principal Debt directly or
indirectly owed to that Lender bears to the total Principal Debt directly or
indirectly owed all Lenders.
"Default Rate" means, for any day, an annual interest rate equal from
day to day to the lesser of either (a) the then-existing Base Rate plus 2% or
(b) the Maximum Rate.
"Distribution" means, with respect to any shares of any capital stock or
other equity securities issued by a Person (a) the retirement, redemption,
purchase, or other acquisition for value of those securities, (b) the
declaration or payment of any dividend on or with respect to those
securities, (c) any loan or advance by that
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Person to, or other investment by that Person in, the holder of any of those
securities, and (d) any other payment by that Person with respect to those
securities.
"EBITDA," for any period of computation thereof and any Company, means
(a) the sum, without duplication, of (i) Net Income, plus (ii) Interest
Expense, plus (iii) provision for income Taxes, plus (iv) depreciation,
depletion, and amortization of tangible and intangible assets; provided that
(b) extraordinary charges and non-recurring, non-cash losses shall be
excluded from the computation of Net Income.
"Environmental Claim" means any written notice by any Person alleging
potential liability or responsibility for (a) any removal or remedial action,
including any clean-up, removal, or treatment of any Hazardous Material or
any action to prevent or minimize the release or movement of any Hazardous
Materials through or in the air, soil, surface water, ground water, or other
property, (b) damage to the environment or costs with respect thereto, or (c)
personal injury (including sickness, disease, or death), resulting from or
based upon (i) the presence, release, or movement (including sudden or
nonsudden, accidental or nonaccidental, leaks or spills) of any Hazardous
Material at, in, or from the environment or any property, whether or not
owned by any Company, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or any permit
issued to any Company under any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 as amended by the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. Paragraph 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Paragraph 1801
et seq.), the Resource Conservation and Recovery Act of 1976 as amended by
the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. Paragraph 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Paragraph 1251 et
seq.), the Clean Air Act as amended by the Clean Air Act Amendments of 1990
(42 U.S.C. Paragraph 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Paragraph 2601 et seq.), the Clean Water Act (33 U.S.C. Paragraph 1251
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Paragraph 136 et seq.), the Emergency Planning and Community Right-to-Know
Act (42 U.S.C. Paragraph 11001 et seq.), the Safe Drinking Water Act (42
U.S.C. Paragraph 201 and Paragraph 300f et seq.), the Rivers and Harbors Act
(33 U.S.C. Paragraph 401 et seq.), the Oil Pollution Act (33 U.S.C. Paragraph
2701 et seq.), and the Occupational Safety and Health Act (29 U.S.C.
Paragraph 651 et seq.), and all analogous future federal, or present and
future state or local Legal Requirements and similar Legal Requirements of
jurisdictions other than the United States to which any Company or its
properties are subject.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Eurodollar Rate" means, for any Eurodollar-Rate Borrowing and its
Interest Period, the annual interest rate (rounded upwards, if necessary, to
the nearest 0.001%) determined by Administrative Agent to be equal to the
quotient obtained by dividing:
(a) the annual interest rate either (i) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate
for deposits in dollars at approximately 11:00 a.m. (London time) two
Business Days before the first day of that Interest Period for a term
comparable to that Interest Period, or (ii) either (A) if for any reason
that rate is not available, appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days before the first day of that
Interest Period for a term comparable to that Interest Period or (B) if
more than one rate is specified on Reuters Screen LIBO Page, the
arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 0.001%); by
(b) one minus the Reserve Requirement for that Eurodollar-Rate
Borrowing and that Interest Period.
"Eurodollar-Rate Borrowing" means a Borrowing bearing interest at the
sum of the Eurodollar Rate plus the Applicable Percentage.
-5-
"Event of Default" is defined in Section 11.
"Fed-Funds Rate" means, for any day, the annual interest rate (rounded
upwards, if necessary, to the nearest 0.001%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on that day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding that day; provided that (a) if that day is not a Business Day, the
Fed-Funds Rate for that day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on the next succeeding Business
Day, the Fed-Funds Rate for that day shall be the average rate charged to
Administrative Agent (in its individual capacity) on that day on such
transactions as determined by Administrative Agent.
"Financials" of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus, and statements of cash
flow prepared (a) according to GAAP (subject to year end audit adjustments
with respect to interim Financials) and (b) except as stated in Section 1.4,
in comparative form to prior year-end figures or corresponding periods of the
preceding fiscal year or other relevant period, as applicable.
"fiscal month" means a period of four, five, or six weeks having seven
days in each week ending on a Saturday and that otherwise approximates a
calendar-monthly period. The fiscal-month ends for 1998 through 2003 are
described on Schedule 1.1. Reference to a fiscal month by the name of a
calendar month means the fiscal month that encompasses the most of that
calendar month (e.g., the fiscal month of March 1999 ends on April 3, 1999).
"fiscal quarter" means any quarter of a fiscal year ending on the last
day of a fiscal month (e.g., the third fiscal quarter in 1999 ends on
November 28, 1998). The fiscal-quarter ends for 1998 through 2003 are
indicated on Schedule 1.1 by asterisks.
"Fixed-Charge-Coverage Ratio" at any time of determination means -- for
the Companies and for the 12-month period ending as of the last day of a
fiscal quarter preceding the time of determination -- the ratio of (a) the
sum of EBITDA, plus Lease Expense, minus Maintenance-Capital Expenditures of
fixed assets to (b) the sum of Interest Expense plus Lease Expense.
"Funded Debt" means -- for any Company, at any time, and without
duplication -- the sum of (a) the principal amount of all Debt for borrowed
money, plus (b) Capital Leases, plus (c) the face amount of all issued and
outstanding standby letters of credit (other than standby letters of credit
issued to support industrial development revenue bonds), plus (d) all
obligations arising under such standby letters of credit, plus (e) Debt under
banker's acceptances.
"Funding Loss" means any loss, expense, or reduction in yield (but not
any Applicable Percentage) that any Lender reasonably incurs because (a)
Borrower fails or refuses (for any reason whatsoever other than a default by
Administrative Agent or that Lender claiming that loss, expense, or reduction
in yield) to take any non-Base-Rate Borrowing that it has requested under
this agreement, or (b) Borrower prepays any non-Base-Rate Borrowing or
converts any non-Base-Rate Borrowing to a Borrowing of another Type, in each
case, other than on the last day of the applicable Interest Period.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and the Financial Accounting Standards Board that are applicable from time to
time.
"Governmental Authority" means any (a) local, state, territorial,
federal, or foreign judicial, executive, regulatory, administrative,
legislative, or governmental agency, board, bureau, commission, department,
or other instrumentality, (b) private arbitration board or panel, or (c)
central bank.
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"Government Securities" means (to the extent they mature within one year
from the date in question) readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations guaranteed
by the full faith and credit of the United States of America, and (b)
obligations of an agency or instrumentality of, or corporation owned,
controlled, or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the
United States of America.
"Guarantor" means, at any time, a Subsidiary who has executed and
delivered to Administrative Agent a Guaranty that is then in full force and
effect.
"Guaranty" means a guaranty substantially in the form of the attached
Exhibit B.
"Hazardous Materials" means those substances that are regulated by, or
form the basis of liability under, any Environmental Laws.
"Hedging Agreement" means, for any Company, any present or future,
whether master or single, agreement, document or instrument providing for --
or constituting an agreement to enter into (a) commodity hedge in the normal
course of business in accordance with prior practices of that Person before
the date of this agreement for purposes of hedging material purchases, (b)
any arrangement for foreign-currency-exchange protection, and (c) any
interest-rate swap, cap, collar, or similar arrangement.
"Interest Expense" means -- for any Company, for any period, and without
duplication -- gross interest expense, including (i) the amortization of debt
discounts, (ii) the amortization of all fees (including fees in respect to
interest-rate-protection agreements) payable in connection with the
incurrence of Debt to the extent included in interest expense, and (iii) the
portion of any payments made in connection with Capital Leases allocable to
interest expense, all determined in accordance with GAAP applied on a
consistent basis.
"Interest Period" is determined under Section 3.9.
"IRC" means the Internal Revenue Code of 1986.
"Investment" means, in respect of any Person, any loan, advance,
extension of credit, or capital contribution to that Person, any investment
in that Person, or any purchase or commitment to purchase any equity
securities or Debt issued by that Person or substantially all of the assets
or a division or other business unit of that Person.
"Lease Expense" means -- for any Company, for any period, and without
duplication -- lease, rental, and all other payments made in respect of or in
connection with operating leases to the extent deducted in arriving at
EBITDA.
"Legal Requirements" means all applicable statutes, laws, treaties,
ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, and interpretations of any Governmental Authority.
"Lenders" means the financial institutions -- including, without
limitation, Administrative Agent in respect of its share of Borrowings --
named on Schedule 2 or on the most-recently-amended Schedule 2, if any,
delivered by Administrative Agent under this agreement, and, subject to this
agreement, their respective successors and permitted assigns (but not any
Participant who is not otherwise a party to this agreement).
"Leverage Ratio" means, for the Companies and at any time of
determination, the ratio of (a) the Funded Debt of the Companies as of the
last day of a fiscal quarter of the Companies preceding that time of
determination to (b) EBITDA of the Companies for the 12-month period ending
on that last day.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from
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assets or proceeds prior to the claims of other creditors or the owners
(other than title of the lessor under an operating lease).
"Litigation" means any action by or before any Governmental Authority.
"Maintenance-Capital Expenditures" means, for any fiscal quarter of
Borrower, an amount equal to the greater of either (a) the product of $4,500
times the average number of Company-operated retail stores open during the
immediately preceding four fiscal quarters or (b) the actual capital
expenditures incurred by the Companies during that fiscal quarter for the
maintenance and improvement of the Company-operated retail stores -- other
than capital expenditures incurred in connection with (i) new store openings
and (ii) the Companies' reported store-remodeling program (not to exceed
$10,000,000).
"Master Competitive-Bid Note" means a promissory note in substantially
the form of Exhibit A-3.
"Material-Adverse Event" means any circumstance or event that,
individually or collectively (a) results (or reasonably could be expected to
result) in an Event of Default or (b) materially and adversely affects (or is
reasonably expected to materially and adversely affect) the financial
condition or business operations of the Companies on a consolidated basis.
"Material Subsidiary" means, at any time, either:
(a) Any Subsidiary of Borrower (other than a securitization
Subsidiary) that has (or, in respect of a newly formed or acquired
Subsidiary, would have on a pro forma basis) contributed at least 5% of
either (i) the gross revenues of the Companies for the immediately
preceding fiscal year of the Companies, or (ii) the Net Income of the
Companies for the immediately preceding fiscal year of the Companies, or
(iii) the Tangible-Net Worth of the Companies as of the last day of the
immediately preceding fiscal year of the Companies; or
(b) All Subsidiaries of Borrower at any time when all Companies
that would not otherwise be Material Subsidiaries according to clause
(a) above shall have (or, in respect of newly formed or acquired
Subsidiaries, would have on a pro forma basis) collectively contributed
more than 25% of either (i) the gross revenues of the Companies for the
immediately preceding fiscal year of the Companies, or (ii) the Net
Income of the Companies for the immediately preceding fiscal year of the
Companies, or (iii) the Tangible-Net Worth of the Companies as of the
last day of the immediately preceding fiscal year of the Companies.
"Maximum Amount" and "Maximum Rate" respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest
that, under applicable law, that Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, for any period and any Company, net income
determined on a consolidated basis in accordance with GAAP applied on a
consistent basis, but excluding as income (a) net gains on the sale,
conversion, or other disposition of capital assets and net gains on the
acquisition, retirement, sale, or other disposition of capital stock and
other securities of the Companies, (b) any write-up of any assets, and (c)
any other net gain or credit of an extraordinary nature.
"Non-Funding Lender" is defined in Section 2.1(d).
"Notes" means the Ratable Notes, Swing Note, and Master Competitive-Bid
Notes.
"Obligation" means all present and future (a) Debts, liabilities, and
obligations of any Company to Administrative Agent, any Lender, Swing Lender,
or Arranger related to any Credit Document, whether
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principal, interest, fees, costs, attorneys' fees, or otherwise, and (b)
renewals, extensions, and modifications of any of the foregoing.
"OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C.
Paragraph 651 et seq.
"Participant" is defined in Section 14.10(c).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Distributions" means Distributions that are declared, made,
or paid (a) in the form of additional equity that is not mandatorily
redeemable, (b) to Borrower by any of its Subsidiaries, (c) to any Guarantor
by any of its Subsidiaries, (d) to any Unrestricted Company by any other
Unrestricted Company, (e) in the form of Borrower's redemption of its own
stock for vested but unexercised employee stock options and employee stock
options vesting within one year and the requirements of the Pier 1 Imports
Employee Stock Purchase Plan and the Pier 1 Imports Direct Stock Purchase and
Dividend Reinvestment Plan, and (f) otherwise by Borrower in cash if (i) the
total of such Distributions does not exceed $12,000,000 actually paid during
any fiscal year of Borrower, (ii) paid within 90 days after being declared,
and (iii) not declared while a Default Condition existed.
"Permitted Guaranties" is defined in Section 9.5.
"Permitted Investment" means the following:
(a) Government Securities.
(b) Readily marketable direct obligations of any state of the
United States of America given on the date of such investment a credit
rating of at least Aa by Moody's or AA by S&P, in each case due within
one year from the making of the investment.
(c) Certificates of deposit issued by, bank deposits in,
eurocurrency deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by (i) any Lender or
(ii) any bank organized and existing under the laws of the United States
of America or any of its states and having on the date of the investment
a short-term certificate of deposit credit rating of at least P-2 by
Moody's or A-2 by S&P, in each case due within one year after the date
of the making of the investment.
(d) Repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934 and having on the date of the investment
capital of at least $100,000,000, due within 30 days after the date of
the making of the investment, so long as the maker of the investment
receives written confirmation of the transfer to it of record ownership
of the Government Securities on the books of a "primary dealer" in the
Government Securities as soon as practicable after the making of the
investment.
(e) Readily marketable commercial paper of corporations
organized and existing under the laws of the United States of America or
any of its states and doing business in the United States of America or
any of its states or of any corporation that is the holding company for
a bank described in clause (c) above and having on the date of the
investment a credit rating of at least P-1 by Moody's or A-1 by S&P, in
each case due within 90 days after the date of the making of the
investment.
(f) "Money market preferred stock" and tax exempt preferred
stock issued by a corporation organized and existing under the laws of
the United States of America or any of its states and given on the date
of the investment a credit rating of at least Aa by Moody's and AA by
S&P, in each case having an investment period not exceeding 50 days, so
long as (i) the amount of all of
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those investments issued by the same issuer does not exceed $5,000,000
and (ii) the total amount of all of those investments does not exceed
$10,000,000.
(g) A readily redeemable "money market mutual fund" sponsored
by a bank described in clause (c) above, or a registered broker or
dealer described in clause (d) above, that has and maintains an
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (f) above and has on the date
of those investment total assets of at least $1,000,000,000.
(h) Purchases of a majority of the outstanding capital stock of
any corporation.
(i) Investments by any one or more Companies in Borrower or any
Guarantor if there is no related Default Condition.
(j) Working-capital advances from Borrower to The Pier Retail
Group Limited that are not outstanding more than 90 days and that never
exceed a total of $5,000,000 principal amount outstanding at any time.
(k) Borrower's ownership of beneficial interests in securitized
receivables or in any master trust established in connection with the
sale of accounts receivable for an accounts receivable financing or
securitization facility.
(l) Loans or advances to directors, officers, and employees of
the Companies that never exceed a total of $10,000,000 outstanding for
all of the Companies.
(m) Indebtedness of customers created in any Company's ordinary
course of business in a manner consistent with its present practices.
(n) Hedging Agreements.
"Permitted Liens" is defined in Section 9.3.
"Person" means any individual, entity, or Governmental Authority.
"Plan" means an employee benefit plan or other plan maintained by
Borrower for employees of any Company and covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the IRC.
"Potential Default" means any event's occurrence or any circumstance's
existence that would -- upon any required notice, time lapse, or both --
become an Event of Default.
"Predecessor" means any Person for whose obligations and liabilities any
Company is reasonably expected to be liable as the result of any merger, de
facto merger, stock purchase, asset purchase or divestiture, combination,
joint venture, investment, reclassification, or other similar business
transaction.
"Principal Debt" means, at any time, the unpaid principal balance of all
Borrowings.
"Ratable Borrowing" means any Borrowing funded by Lenders under Section
2.1 according to their respective Commitment Percentages.
"Ratable Note" means one of the promissory notes substantially in the
form of Exhibit A-1.
"Refinanced Credit Agreement" means the Revolving Credit Agreement dated
as of December 15, 1995, between Borrower as Borrower, certain of its
Subsidiaries as Guarantors, certain lenders, and Xxxxx
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Fargo Bank (Texas), N.A. (formerly First Interstate Bank of Texas, N.A.), as
Agent for those lenders, as that agreement has been renewed, extended, and
amended through the date of this agreement.
"Regulatory Defect" means, to the extent that it would be a Material-
Adverse Event (a) any failure of any Restricted Company to comply with any
Legal Requirement applicable to it or (b) any unfavorable examination report
is received by any Restricted Company from any regulatory or similar
Governmental Authority regarding any of the businesses or activities in which
any Restricted Company is engaged.
"Reportable Event" means a "reportable event" described in Section
4043(b) of ERISA.
"Representatives" means, for any Person, its representatives, officers,
directors, employees, accountants, attorneys, and agents.
"Required Lenders" means, at any time, any combination of Lenders
directly or indirectly holding at least either (a) more than 50% of the total
Commitments at any time when any Commitments remain in effect or (b) more
than 50% of the total Principal Debt at any time when all Commitments have
been terminated or cancelled.
"Reserve Requirement" means, for any Eurodollar-Rate Borrowing and for
the relevant Interest Period, the total reserve requirements (including all
basic, supplemental, emergency, special, marginal, and other reserves
required by applicable Legal Requirement) actually applicable to
Administrative Agent's eurocurrency fundings or liabilities as of the first
day of that Interest Period.
"Responsible Officer" means (to the extent that such Person's name,
title, and signature have been properly certified to Administrative Agent)
any (a) of Borrower's chairman, president, chief executive officer, chief
financial officer, or treasurer, or (b) other representative of Borrower
designated as a Responsible Officer for purposes of the Credit Documents by
any officer designated in clause (a) preceding.
"Restricted Companies" means Borrower and each other Company that is not
an Unrestricted Company.
"Restricted Payment" means (a) Distributions that are not Permitted
Distributions, (b) Investments that are not Permitted Investments, and (c)
prepayments or purchases of any subordinated Debt of the Companies before the
respective scheduled maturity dates that exceed a total of $50,000,000.
"Rights" means rights, remedies, powers, privileges, and benefits.
"S&P" means Standard & Poor's Rating Services, a division of The XxXxxx-
Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Stated-Termination Date" means November 12, 2003.
"Subsidiary" of any Person means any entity of which more than 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person. Unless otherwise
specified or the context otherwise requires, "Subsidiary" refers to a
Subsidiary of Borrower.
"Swing Borrowing" means any Borrowing under the Swing Subfacility.
"Swing Lender" means NationsBank, N.A., as the lender of Swing
Borrowings under this agreement.
"Swing Note" means a promissory note in substantially the form of
Exhibit A-2.
"Swing Subfacility" means the subfacility described in, and subject to
the limitations of, Section 2.2.
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"Tangible Assets" means, at any time and for any Person, the sum of (a)
the book value of all assets, minus (b) all assets treated as intangible
assets under GAAP (including goodwill, trademarks, trade names, copyrights,
patents, and unamortized debt discount and expense).
"Tangible-Net Worth" means, at any time and for any Person, the sum of
(i) its stockholders' equity, minus (ii) the total (without duplication of
deductions already made in arriving at stockholders' equity) of the book
value of all assets treated as intangible assets under GAAP, including
goodwill, trademarks, trade names, copyrights, patents, and unamortized debt
discount and expense.
"Taxes" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"Type" means any type of Borrowing determined with respect to the
applicable interest option.
"Unrestricted Company" means, at any time, any Company (other than
Borrower) that is (a) not a Material Subsidiary, (b) a controlled foreign
corporation under Section 956 of the IRC, the earnings of which (i) is not
then included in Borrower's gross income for purposes of federal income Taxes
but (ii) would be so included if it were to execute a Guaranty, or (c) is
otherwise designated on Schedule 7.2 or in a consent or waiver executed by
Borrower and Required Lenders as not being a Restricted Company.
"Y2K Issue" means the risk that computer applications used by any
Company or by any of its suppliers or vendors may be unable properly to
recognize and perform date-sensitive functions.
1.2 Time References. Unless otherwise specified, in the Credit
Documents (a) time references (e.g., 10:00 a.m.) are to time in Dallas,
Texas, on the applicable date, and (b) in calculating a period from one date
to another, the word "from" means "from and including" and the word "to" or
"until" means "to but excluding."
1.3 Other References. Unless otherwise specified, in the Credit
Documents (a) where appropriate, the singular includes the plural and vice
versa, and words of any gender include each other gender, (b) where
appropriate, words include their respective cognate expressions, (c) heading
and caption references may not be construed in interpreting provisions, (d)
monetary references are to currency of the United States of America, (e)
section, paragraph, annex, schedule, exhibit, and similar references are to
the particular Credit Document in which they are used, (f) references to
"telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy
transmissions, (g) references to "including" mean including without limiting
the generality of any description preceding that word, (h) the rule of
construction that references to general items that follow references to
specific items are limited to the same type or character of those specific
items is not applicable in the Credit Documents, (i) references to "writing"
include printing, typing, lithography, and other means of reproducing words
in a tangible, visible form, (j) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers,
and permitted assigns, (k) references to any Legal Requirement include every
amendment or supplement to it, rule and regulation adopted under it, and
successor or replacement for it, (l) references to any Governmental Authority
include any Person succeeding to its relevant function, and (m) references to
any Credit Document or other document include (to the extent not prohibited
by the terms of the Credit Documents) every renewal and extension of it,
amendment and supplement to it, and replacement or substitution for it.
1.4 Accounting Principles. Unless otherwise specified, in the
Credit Documents (a) GAAP determines all accounting and financial terms and
compliance with financial covenants, (b) GAAP in effect on the date of this
agreement determines calculation of financial covenants, (c) otherwise, all
accounting principles applied in a current period must be comparable in all
material respects to those applied during the preceding comparable period,
and (d) all financial terms and compliance with reporting and financial
covenants must be on a consolidated basis, as applicable.
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SECTION 2 COMMITMENTS.
2.1 Revolving Credit Facility. Subject to the following specific
conditions and other conditions and provisions in the Credit Documents, each
Lender severally but not jointly agrees to lend to Borrower that Lender's
Commitment Percentage of requested or required Ratable Borrowings under this
Section 2.1, which Borrower may borrow, repay, and reborrow under this
agreement.
(a) Conditions. Ratable Borrowings are subject to the
following specific conditions:
* Each Ratable Borrowing may only occur on a Business Day on
or after the Closing Date and before the Actual-Termination
Date.
* Each Ratable Borrowing may only be $500,000 or a greater
integral multiple of $100,000 if a Base-Rate Borrowing or
$1,000,000 or a greater integral multiple of $1,000,000 if
a Eurodollar-Rate Borrowing.
* The total Principal Debt may never exceed the total
Commitments.
(b) Borrowing Request. Borrower may request a Ratable
Borrowing by executing and delivering a Borrowing Request to
Administrative Agent, which is irrevocable and binding on Borrower,
stating the Type, amount, and Interest Period for each Borrowing and
which must be received by Administrative Agent no later than (i) 10:00
a.m. on the second Business Day before the relevant Borrowing Date for
any Eurodollar-Rate Borrowing (which may be before the date of this
agreement in respect of the initial Borrowing), or (ii) 11:00 a.m. on
the Borrowing Date for any Base-Rate Borrowing. Administrative Agent
shall, promptly on the day received, notify each Lender of any Borrowing
Request.
(c) Funding. Each Lender shall remit its Commitment Percentage
of each requested Ratable Borrowing to Administrative Agent's principal
office in Dallas, Texas, in funds that are available for immediate use
by Administrative Agent by 2:00 p.m. on the relevant Borrowing Date.
Subject to receipt of those funds, Administrative Agent shall (unless to
its actual knowledge any of the applicable conditions precedent have not
been satisfied by Borrower or waived by the requisite Lenders) make
those funds available to Borrower by (at Borrower's option) (i) wiring
the funds to or for the account of Borrower at the direction of Borrower
or (ii) depositing the funds in Borrower's account with Administrative
Agent.
(d) Non-Funding Lender. The failure of any Lender to remit its
Commitment Percentage of any requested Ratable Borrowing shall not
relieve any other Lender of its obligation to remit its Commitment
Percentage of that Ratable Borrowing. If any Lender wrongfully fails to
so remit that Commitment Percentage (that Lender is referred to as "Non-
Funding Lender," and the amount of Commitment Percentage is referred to
as the "Advance Deficiency"), all conditions to the related Ratable
Borrowing have been satisfied, and that related Ratable Borrowing is in
compliance with Section 2.1, then:
(i) Administrative Agent shall make available such funds
as shall have been received by it from the other Lenders in
accordance with clause (c) above;
(ii) If the Principal Debt of Ratable Borrowings and
Swing Borrowings owed to a Lender will not then exceed its
Commitment, then within two Business Days following that failure of
Non-Funding Lender, each other Lender shall remit to Administrative
Agent that Lender's proportionate share (stated as a percentage
determined by dividing that Lender's Commitment by the remainder of
the total Commitments minus the Non-Funding Lender's Commitment) of
the Advance Deficiency, which Administrative Agent shall either
fund to
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Borrower as provided in clause (c) above or retain as provided in
clause (e) below, to the extent either is applicable.
(iii) Administrative Agent shall use good faith efforts to
obtain one or more lenders, reasonably acceptable to Borrower, to
replace Non-Funding Lender, but neither Administrative Agent nor
any other Lender shall have any liability or obligation whatsoever
as a result of the failure to obtain a replacement for Non-Funding
Lender; and
(iv) Unless and until the Non-Funding Lender shall have
cured any Advance Deficiency (A) its share of any fees paid by
Borrower under Section 4.3 shall be paid to the other Lenders that
are not Non-Funding Lenders, and (B) the other Lenders may recover
and collect from that Non-Funding Lender any amounts loaned by
those other Lenders to fund any Advance Deficiency resulting from
that Non-Funding Lender's wrongful failure to remit its share of
the requested Ratable Borrowing.
IN ANY EVENT, NON-FUNDING LENDER SHALL INDEMNIFY, DEFEND, AND HOLD
ADMINISTRATIVE AGENT AND EACH OTHER LENDER HARMLESS FROM AND AGAINST ANY
AND ALL LOSSES, DAMAGES, LIABILITIES, OR EXPENSES (INCLUDING, BUT NOT
LIMITED TO, REASONABLE ATTORNEYS' FEES AND INTEREST AT THE FED-FUNDS
RATE FOR FUNDS ADVANCED BY ADMINISTRATIVE AGENT OR ANY OTHER LENDER ON
ACCOUNT OF NON-FUNDING LENDER) WHICH THEY MAY SUSTAIN OR INCUR BY REASON
OF OR IN CONSEQUENCE OF NON-FUNDING LENDER'S FAILURE OR REFUSAL TO ABIDE
BY ITS OBLIGATIONS UNDER THIS AGREEMENT. ADMINISTRATIVE AGENT MAY SET
OFF AGAINST PAYMENTS DUE TO NON-FUNDING LENDER UNDER THE TERMS OF THIS
AGREEMENT FOR THE CLAIMS OF ADMINISTRATIVE AGENT AND OTHER LENDERS
AGAINST NON-FUNDING LENDER.
(e) Funding Assumed. Absent contrary written notice from a
Lender, Administrative Agent may assume that each Lender has made its
Commitment Percentage of the requested Ratable Borrowing available to
Administrative Agent on the relevant Borrowing Date, and Administrative
Agent may, in reliance upon such assumption (but shall not be required
to), make available to Borrower a corresponding amount. If a Lender
fails to make its Commitment Percentage of any requested Ratable
Borrowing available to Administrative Agent on the relevant Borrowing
Date, Administrative Agent may recover the applicable amount -- less
amounts remitted to it by the other Lenders and retained by
Administrative Agent pursuant to clause (d) above -- on demand (i) from
that Lender together with interest, commencing on the relevant Borrowing
Date and ending on (but excluding) the date Administrative Agent
recovers the amount from that Lender, at an annual interest rate equal
to the Fed-Funds Rate, or (ii) if that Lender fails to pay its amount
upon demand, then from Borrower together with interest, commencing on
the relevant Borrowing Date and ending on (but excluding) the date
Administrative Agent recovers the amount from Borrower, at an annual
interest rate equal to the rate applicable to that Ratable Borrowing.
2.2 Swing Subfacility. For the convenience of the parties, as an
integral part of the transactions contemplated by the Credit Documents, and
subject to the following specific conditions and other conditions and
provisions in the Credit Documents, Swing Lender may (but is not obligated
to) make any requested Borrowing to Borrower under this Section 2.2 without
requiring any other Lender to fund any part of it at the time of the
Borrowing.
(a) Conditions. Swing Borrowings are subject to the following
specific conditions:
* Each Swing Borrowing may only occur on a Business Day on or
after the Closing Date and before the Actual-Termination
Date.
* Each Swing Borrowing may only be $250,000 or a greater
integral multiple of $100,000.
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* The total Principal Debt of Swing Borrowings may never
exceed $10,000,000.
* The total Principal Debt may never exceed the total
Commitments.
* No additional Swing Borrowing shall be made at any time
while any Lender has refused, notwithstanding the
requirements of clause (c) below, to purchase a
participation in any Swing Borrowing as provided in that
clause until that purchase shall occur or until that Swing
Borrowing has been repaid.
(b) Requests for Swing Borrowings. Borrower may request a
Swing Borrowing by submitting a telephonic or written request to Swing
Lender by no later than 1:00 p.m. on the relevant Borrowing Date.
(c) Payment and Participations. If Borrower fails to repay any
Swing Borrowing and accrued interest on it within three Business
Days after demand by Swing Lender (and in any event upon the
earlier to occur of an Event of Default or the Actual-Termination
Date), Swing Lender shall timely notify each Lender of that failure
and of the date and amount not paid. No later than the close of
business on the date that notice is given (if that notice was given
by 12:00 Noon on any Business Day, or, if made at any other time,
on the next Business Day following the date of that notice), each
Lender shall be deemed to have irrevocably and unconditionally
purchased and received from Swing Lender an undivided interest and
participation in that Swing Line Borrowing to the extent of such
Lender's Commitment Percentage of it, and each Lender shall make
available to Swing Lender in immediately available funds that
Lender's Commitment Percentage of it. All such amounts payable by
any Lender shall include interest thereon from the date on which
such payment is payable by that Lender to, but not including, the
date such amount is paid by that Lender to Swing Lender, at the
Fed-Funds Rate. If that Lender does not promptly pay that amount
upon Swing Lender's demand therefor, and until such time as that
Lender makes the required payment, Swing Lender shall be deemed to
continue to have outstanding a Swing Borrowing in the amount of
that unpaid obligation. Each payment by Borrower of all or any
part of any Swing Borrowing shall be paid to Swing Lender for the
ratable benefit of Swing Lender and those Lenders who have funded
their participations in that Swing Borrowing. However, with
respect to any such participation, all interest accruing on the
Principal Debt of Swing Borrowings to which such participation
relates prior to the date of funding such participation shall be
payable solely to Swing Lender for its own account.
2.3 Competitive-Bid Subfacility. Subject to the following specific
conditions and other conditions and provisions in the Credit Documents, each
Lender may elect (in its sole discretion) to make any requested Borrowing to
Borrower under this Section 2.3. No Lender is obligated to offer Borrower a
Competitive Bid, and Borrower is not obligated to accept any Competitive Bid
that it receives.
(a) Conditions. Competitive-Bid Borrowings are subject to the
following specific conditions:
* Each Competitive-Bid Borrowing may only occur on a Business
Day on or after the Closing Date and before the Actual-
Termination Date.
* Each Competitive-Bid Borrowing may only be $5,000,000 or a
greater integral multiple of $1,000,000.
* The total Principal Debt may never exceed the total
Commitments.
(b) Competitive-Bid Requests. Borrower may request Competitive
Bids by executing and delivering Competitive-Bid Request to
Administrative Agent by no later than (i) 10:00 a.m. on the fifth
Business Day before the relevant Borrowing Date for Eurodollar-Rate
Borrowings or (ii) 10:00 a.m. one Business Day before the Borrowing Date
for Base-Rate Borrowings. A
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Competitive-Bid Request that does not conform substantially to the
format of Exhibit C-3 may be rejected by Administrative Agent, and
Administrative Agent shall promptly notify Borrower of such rejection.
Each Competitive-Bid Request must be for an aggregate principal amount
of not less than $5,000,000 or a greater integral multiple of
$1,000,000. Promptly after its receipt of a Competitive-Bid Request
that is not rejected, Administrative Agent shall send to Lenders a
Notice of Competitive-Bid Request (substantially in the form of Exhibit
C-4) inviting Lenders to bid to extend Competitive-Bid Borrowings
pursuant to that Competitive Bid Request.
(c) Competitive-Bids. Each Lender may make one or more
Competitive Bids to Borrower responsive to each respective Competitive-
Bid Request. Each Competitive Bid by a Lender must be received by
Administrative Agent by no later than (i) 11:00 a.m. on the fourth
Business Day before the Borrowing Date for any requested Competitive-Bid
Borrowing that will be comprised of Eurodollar-Rate Borrowings, or (ii)
by 10:00 a.m. on the Borrowing Date for any requested Competitive-Bid
Borrowing that will be comprised of Base-Rate Borrowings. Competitive
Bids that do not conform substantially to the format of Exhibit C-5 may
be rejected by Administrative Agent after conferring with, and upon the
instruction of, Borrower, and Administrative Agent shall notify the
appropriate Lender of such rejection as soon as practicable. Each
Competitive Bid shall be for a principal amount of at least $5,000,000
or a greater integral multiple of $1,000,000, may equal the entire
principal amount of the Competitive-Bid Borrowing requested by Borrower,
and may exceed that Lender's Commitment, subject to the limitations set
forth in clause (a) above. A Competitive Bid submitted by a Lender
under this clause (c) is irrevocable.
(d) Notice of Bids. Administrative Agent shall promptly notify
Borrower of all Competitive Bids made, the relevant Competitive-Bid
Rates, the principal amount of each Competitive-Bid Borrowing in respect
of which a Competitive Bid was made, the identity of the Lender that
made each bid.
(e) Acceptance or Not. Borrower may, subject only to the
provisions of this clause (e), accept or reject any or all of the
Competitive Bids referred to in clause (c) above. However, the
aggregate amount of the Competitive Bids so accepted by Borrower may not
exceed the principal amount of the Competitive-Bid Borrowing requested
by Borrower (subject to the further limitations of clause (a) above).
Borrower shall notify Administrative Agent whether and to what extent it
has decided to accept or reject any or all of those bids, (i) not later
than 10:00 a.m. three Business Days before the Borrowing Date specified
for a proposed Competitive-Bid Borrowing that is deemed a Eurodollar-
Rate Borrowing or (ii) not later than 11:00 a.m. on the day specified
for a proposed Competitive-Bid Borrowing that is deemed a Base-Rate
Borrowing. However, (w) the failure by Borrower to give that notice
shall be deemed to be a rejection of all the bids referred to in clause
(c) above, (x) Borrower shall not accept a bid in the same or lower
principal amount made at a particular Competitive-Bid Rate if Borrower
has decided to reject a bid made at a lower Competitive-Bid Rate, (y) if
Borrower shall accept bids made at a particular Competitive-Bid Rate but
shall be restricted by other conditions hereof from borrowing the
principal amount of the Competitive-Bid Borrowing in respect of which
bids at that Competitive-Bid Rate have been made, then Borrower shall
accept a ratable portion of each bid made at such Competitive-Bid Rate
based as nearly as possible on the respective principal amounts of the
Competitive-Bid Borrowing for which such bids were made, and (z) no bid
shall be accepted for a Competitive-Bid Borrowing unless the aggregate
principal amount to be funded pursuant to all accepted bids shall be in
a minimum amount of $5,000,000 or a greater integral multiple of
$1,000,000 for each respective Lender whose bid is accepted.
Notwithstanding the foregoing, if it is necessary for Borrower to accept
a ratable allocation of the bids made in response to a Competitive-Bid
Request (whether pursuant to the events specified in clause (y) above or
otherwise) and the available principal amount of the Competitive-Bid
Borrowing to be allocated among the Lenders submitting Competitive Bids
is not sufficient to enable Competitive-Bid Borrowings to be allocated
to each such Lender in a minimum principal amount of $5,000,000 or a
greater integral multiple of $1,000,000, then Borrower shall select the
Lenders to be allocated such Competitive-Bid Borrowings and shall round
allocations up or down to the next higher or lower multiple of $500,000
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as it shall deem appropriate. A notice given by Borrower pursuant to
this clause (e) shall be irrevocable.
(f) Notice of Acceptance. Administrative Agent shall promptly
notify each bidding Lender whether or not its Competitive Bid has been
accepted (which notice to those Lenders whose Competitive Bids have been
accepted will be given within one hour from the time such bid was
accepted by Borrower and shall further indicate in what amount and at
what Competitive-Bid Rate), and each successful bidder will thereupon
become bound, subject to the other applicable conditions hereof, to
advance the Competitive-Bid Borrowing in respect of which its bid has
been accepted. After completing the notifications referred to in the
immediately preceding sentence, Administrative Agent shall notify each
bidding Lender of the aggregate principal amount of all Competitive Bids
accepted for, and the range of Competitive-Bid Rates submitted in
connection with, that Competitive-Bid Borrowing.
(g) Administrative Agent Bid. If Administrative Agent shall at
any time elect to submit a Competitive Bid in its capacity as a Lender,
it shall submit such bid directly to Borrower one-half hour earlier than
the latest time at which the other Lenders are required to submit their
bids to Administrative Agent pursuant to clause (c) above.
(h) Repayment. Each Competitive-Bid Borrowing, and accrued
interest on it, shall be due and payable on the last day of the
applicable Interest Period. If Borrower fails to repay any Competitive-
Bid Borrowing on the day due, then Borrower shall be deemed to have
given a Borrowing Request requesting Lenders to make a Ratable Borrowing
in the amount of that Competitive-Bid Borrowing, subject to satisfaction
of the conditions specified in Sections 2.1 and 6, and failure to repay
such Competitive-Bid Borrowing on the last day of the applicable
Interest Period shall not constitute a failure to satisfy such
conditions.
2.4 Effect of Requests. Each Borrowing Request, request for a Swing
Borrowing, and Competitive-Bid Request (whether written or telephonic, as the
case may be) constitutes a representation and warranty by Borrower that, as
of the Borrowing Date, all of the conditions precedent in Section 6 have been
satisfied.
2.5 Termination. Upon giving at least five Business Days prior
written and irrevocable notice to Administrative Agent, Borrower may
terminate all or part of the Commitments. Each partial termination must be
in an amount of not less than $10,000,000 or a greater integral multiple of
$1,000,000 and must be ratable in accordance with each Lender's Commitment
Percentage. At the time of any termination, Borrower shall pay to
Administrative Agent, for the account of each Lender, as applicable, all
accrued and unpaid fees under this agreement, the interest attributable to
the amount of that reduction, and any related Funding Loss. Any part of the
Commitments that are terminated may not be reinstated.
SECTION 3 TERMS OF PAYMENT.
3.1 Notes and Payments.
(a) Notes. Principal Debt and related interest for Ratable
Borrowings is evidenced by the Ratable Notes, one payable to each Lender
in the stated amount of its Commitment. Principal Debt and related
interest for Swing Borrowings is evidenced by the Swing Note payable to
Swing Lender. Principal Debt and related interest for Competitive-Bid
Borrowings is evidenced by Master Competitive-Bid Notes payable to each
Lender who has made a Competitive-Bid Borrowing.
(b) Payment. Borrower must make each payment and prepayment on
the Obligation to Administrative Agent's principal office in Dallas,
Texas in immediately available funds by 1:00 p.m. on the day due;
otherwise, but subject to Section 3.8, those funds continue to accrue
interest as if they were received on the next Business Day.
Administrative Agent shall promptly pay to each
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Lender the part of any payment or prepayment to which that Lender is
entitled under this agreement on the same day Administrative Agent
receives the funds from Borrower.
(c) Payment Assumed. Unless Administrative Agent has received
notice from Borrower before the date on which any payment is due under
this agreement that Borrower will not make that payment in full,
Administrative Agent may assume that Borrower has made the full payment
due and Administrative Agent may, in reliance upon that assumption,
cause to be distributed to each Lender on that date the amount then due
to each Lender. If and to the extent Borrower does not make the full
payment due to Administrative Agent, each Lender shall repay to
Administrative Agent on demand the amount distributed to that Lender by
Administrative Agent together with interest for each day from the date
that Lender received payment from Administrative Agent until the date
that Lender repays Administrative Agent (unless such repayment is made
on the same day as such distribution), at an interest rate equal to the
Fed-Funds Rate.
3.2 Interest and Principal Payments
(a) Interest on Ratable Borrowings. Accrued interest on each
Eurodollar-Rate Borrowing that is a Ratable Borrowing is due and payable
on the last day of its respective Interest Period. If any Interest
Period for such a Eurodollar-Rate Borrowing is greater than three
months, then accrued interest is also due and payable on the date three
months after the commencement of the Interest Period. Accrued interest
on each Base-Rate Borrowing that is a Ratable Borrowing is due and
payable on the last day of each March, June, September, and December --
commencing on the first of those dates that follows the Closing Date --
and on the Actual-Termination Date.
(b) Principal Debt of Ratable Borrowings. The Principal Debt
of Ratable Borrowings is due and payable on the Actual Termination Date.
Before that date, Borrower may at any time prepay, without penalty and
in whole or in part, the Principal Debt of Ratable Borrowings so long as
(i) each voluntary partial prepayment must be in a principal amount not
less than $500,000 or a greater integral multiple of $100,000 and (ii)
Borrower shall pay the related Funding Loss, if any, upon demand.
Conversions under Section 3.10 are not prepayments.
(c) Swing Borrowings. The Principal Debt of and accrued
interest on Swing Borrowings is due and payable upon three days demand
by Swing Lender as provided in Section 2.2(c).
(d) Principal Debt of Competitive-Bid Borrowings. The
Principal Debt of and accrued interest on Competitive-Bid Borrowings is
due and payable in accordance with Section 2.3(h).
3.3 Interest Options. Except that the Eurodollar Rate may not be
selected when an Event of Default or Potential Default exists and except as
otherwise provided in this agreement Borrowings bear interest at an annual
rate equal to the lesser of either the Maximum Rate or:
(a) For Ratable Borrowings, either the Base Rate or the
Eurodollar Rate plus the Applicable Percentage, in each case as
designated or deemed designated by Borrower;
(b) For each Swing Borrowing, a rate equal to the sum of (i)
the rate agreed to by Borrower and Swing Lender in writing for that
Swing Borrowing at the time it is loaned to Borrower plus (ii) the
Applicable Percentage Eurodollar Borrowings.
(c) For Competitive-Bid Borrowings, the rate determined in
accordance with Section 2.3(e).
Each change in the Base Rate and Maximum Rate is effective without notice to
Borrower or any other Person upon the effective date of change.
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3.4 Quotation of Rates. Borrower may call Administrative Agent
before delivering a Borrowing Request to receive an indication of the
interest rates then in effect, but the indicated rates do not bind
Administrative Agent or Lenders or affect the interest rate that is actually
in effect when Borrower makes a Borrowing Request or on the Borrowing Date.
3.5 Default Rate. To the extent lawful, all past-due Principal Debt
and past-due interest accruing on any Principal Debt bears interest from the
date due (stated or by acceleration) at the Default Rate until paid,
regardless whether payment is made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable
to any Borrowing exceeds the Maximum Rate, the interest rate on that
Borrowing is limited to the Maximum Rate, but any subsequent reductions in
the designated rate shall not reduce the interest rate thereon below the
Maximum Rate until the total amount of accrued interest equals the amount of
interest that would have accrued if that designated rate had always been in
effect. If at maturity (stated or by acceleration), or at final payment of
the Notes, the total interest paid or accrued is less than the interest that
would have accrued if the designated rates had always been in effect, then,
at that time and to the extent lawful, Borrower shall pay an amount equal to
the difference between (a) the lesser of the amount of interest that would
have accrued if the designated rates had always been in effect and the amount
of interest that would have accrued if the Maximum Rate had always been in
effect, and (b) the amount of interest actually paid or accrued on the Notes.
3.7 Interest Calculations. Interest will be calculated on the basis
of actual number of days (including the first day but excluding the last day)
elapsed but computed as if each calendar year consisted of 360 days (unless
the calculation would result in an interest rate greater than the Maximum
Rate or in the case of interest on Base-Rate Borrowings in which event
interest will be calculated on the basis of a year of 365 or 366 days, as the
case may be). All interest rate determinations and calculations by
Administrative Agent are conclusive and binding absent manifest error.
3.8 Maximum Rate. Regardless of any provision contained in any
Credit Document, no Lender is entitled to contract for, charge, take,
reserve, receive, or apply, as interest on all or any part of the Obligation,
any amount in excess of the Maximum Rate, and, if Lenders ever do so, then
any excess shall be treated as a partial prepayment of principal and any
remaining excess shall be refunded to Borrower. In determining if the
interest paid or payable exceeds the Maximum Rate, Borrower and Lenders
shall, to the maximum extent lawful, (a) treat all Borrowings as a single
extension of credit (and Lenders and Borrower agree that is the case and that
provision in this agreement for multiple Borrowings is for convenience only),
(b) characterize any nonprincipal payment (except for any payment
specifically designated as interest in the Credit Documents) as an expense,
fee, or premium rather than as interest, (c) exclude voluntary prepayments
and their effects, and (d) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the Obligation.
However, if the Obligation is paid in full before the end of its full
contemplated term, and if the interest received for its actual period of
existence exceeds the Maximum Amount, Lenders shall refund any excess (and
Lenders may not, to the extent permitted by Legal Requirement, be subject to
any penalties provided by any Legal Requirements for contracting for,
charging, taking, reserving, or receiving interest in excess of the Maximum
Amount). If the Legal Requirements of the State of Texas are applicable for
purposes of determining the "Maximum Rate" or the "Maximum Amount," then
those terms mean the "indicated rate ceiling" from time to time in effect
under Article 5069-1D.001, Revised Civil Statutes of Texas. Borrower agrees
that Chapter 346, Revised Civil Statutes of Texas (which regulates certain
revolving credit loan accounts and revolving triparty accounts) does not
apply to the Obligation.
3.9 Interest Periods. When Borrower requests any Eurodollar-Rate
Borrowing, Borrower may elect the applicable interest period (each an
"Interest Period"), which may be, at Borrower's option, one, two, three, or
six months for Eurodollar-Rate Borrowings, subject to Section 14.1 and the
following conditions: (a) the initial Interest Period for a Eurodollar-Rate
Borrowing commences on the applicable Borrowing Date or conversion date, and
each subsequent Interest Period applicable to any Borrowing commences on the
day when the next preceding applicable Interest Period expires; (b) if any
Interest Period for a Eurodollar-Rate
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Borrowing begins on a day for which no numerically corresponding Business Day
in the calendar month at the end of the Interest Period exists, then the
Interest Period ends on the last Business Day of that calendar month; (c) if
Borrower is required to pay any portion of a Eurodollar-Rate Borrowing before
the end of its Interest Period in order to comply with the payment provisions
of the Credit Documents, Borrower shall also pay any related Funding Loss;
and (d) no more than five Interest Periods may be in effect at one time.
3.10 Conversions. Subject to the dollar limits of Section 2.1(a) and
provided that Borrower may not convert to or select a new Interest Period for
a Eurodollar-Rate Borrowing at any time when an Event of Default or Potential
Default exists, Borrower may (a) convert a Eurodollar-Rate Borrowing on the
last day of the applicable Interest Period to a Base-Rate Borrowing, (b)
convert a Base-Rate Borrowing at any time to a Eurodollar-Rate Borrowing, and
(c) elect a new Interest Period for a Eurodollar-Rate Borrowing. That
election may be made by telephonic request to Administrative Agent no later
than 10:00 a.m. on the second Business Day before the conversion date or the
last day of the Interest Period, as the case may be (for conversion to a
Eurodollar-Rate Borrowing or election of a new Interest Period), and no later
than 11:00 a.m. on the last day of the Interest Period (for conversion to a
Base-Rate Borrowing). Borrower shall provide a Conversion Notice to
Administrative Agent no later than two days after the date of the conversion
or election. Absent Borrower's telephonic request for conversion or election
of a new Interest Period or if an Event of Default or Potential Default
exists, then, a Eurodollar-Rate Borrowing shall be deemed converted to a
Base-Rate Borrowing effective when the applicable Interest Period expires.
3.11 Order of Application.
(a) No Event of Default. If no Event of Default or Potential
Default exists, any payment shall be applied to the Obligation (except
as otherwise specifically provided in the Credit Documents) in the order
and manner as Borrower directs.
(b) Event of Default. If an Event of Default or Potential
Default exists or if Borrower fails to give direction, any payment
(including proceeds from the exercise of any Rights) shall be applied in
the following order:
(i) All fees and expenses for which Administrative Agent
has not been paid or reimbursed in accordance with the Credit
Documents.
(ii) All fees and expenses for which Lenders have not
been paid or reimbursed in accordance with the Credit Documents
(and, if such payment is less than all unpaid or unreimbursed
fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or
due date).
(iii) Accrued interest on the Principal Debt of Swing
Borrowings, to be either (A) retained by Swing Lender for its
own account or (B) if applicable, shared ratably with those
Lenders having purchased participations in Swing Borrowings
under Section 2.2(c).
(iv) Accrued interest on the Principal Debt of Ratable
Borrowings, to be shared with Lenders in accordance with their
respective Commitment Percentages.
(v) Accrued interest on the Principal Debt of
Competitive-Bid Borrowings, to be shared by Lenders in
accordance with the proportion that the Principal Debt of
Competitive-Bid Borrowings owed to each bears to the total
Principal Debt of Competitive-Bid Borrowings.
(vi) Principal Debt of Swing Borrowings, to be either (A)
retained by Swing Lender for its own account or (B) if
applicable, shared ratably with those Lenders having purchased
participations in Swing Borrowings under Section 2.2(c)
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(vii) Principal Debt of Ratable Borrowings in the order as
Required Lenders may elect, to be shared with Lenders in
accordance with their respective Commitment Percentages.
(viii) Principal Debt of Competitive-Bid Borrowings, to be
shared by Lenders in accordance with the proportion that the
Principal Debt of Competitive-Bid Borrowings owed to each bears
to the total Principal Debt of Competitive-Bid Borrowings.
(ix) The remaining Obligation, if any, in the order and
manner Required Lenders deem appropriate.
(x) To Borrower.
3.12 Sharing of Payments, Etc. If any Lender obtains any payment or
prepayment with respect to the Obligation (whether voluntary, involuntary, or
otherwise) that exceeds the part of that payment or prepayment that it is
then entitled to receive under the Credit Documents, then that Lender shall
purchase from the other Lenders participations that will cause the purchasing
Lender to share the excess payment or prepayment ratably with each other
Lender. If all or any portion of any excess payment or prepayment is
subsequently recovered from the purchasing Lender, then the purchase shall be
rescinded and the purchase price restored to the extent of the recovery.
Borrower agrees that any Lender purchasing a participation from another
Lender under this section may, to the fullest extent lawful, exercise all of
its Rights of payment with respect to that participation as fully as if that
Lender were the direct creditor of Borrower in the amount of that
participation.
3.13 Discharge and Reinstatement. Each Company's obligations under
the Credit Documents remain in full force and effect until no Lender has any
commitment to extend credit under the Credit Documents and the Obligation is
fully paid (except for provisions under the Credit Documents which by their
terms expressly survive payment of the Obligation and termination of the
Credit Documents). If any payment under any Credit Document is ever
rescinded or must be restored or returned for any reason, then all Rights and
obligations under the Credit Documents in respect of that payment are
automatically reinstated as though the payment had not been made when due.
3.14 Booking Borrowings. To the extent lawfully permitted, any
Lender may make, carry, or transfer its Borrowings at, to, or for the account
of any of its branch offices or the office or branch of any of its
Affiliates. However, no Affiliate or branch is entitled to receive any
greater payment under Section 3.16 than the transferor Lender would have been
entitled to receive with respect to those Borrowings, and a transfer may not
be made if, as a direct result of it, Section 3.16 or 3.17 would apply to any
of the Obligation. If any of the conditions of Sections 3.16 or 3.17 ever
apply to a Lender, that Lender shall, to the extent possible, carry or
transfer its Borrowings at, to, or for the account of any of its branch
offices or the office or branch of any of its Affiliates so long as the
transfer is consistent with the other provisions of this section, does not
create any burden or adverse circumstance for that Lender that would not
otherwise exist, and eliminates or ameliorates the conditions of Sections
3.16 or 3.17 as applicable.
3.15 Basis Unavailable or Inadequate for Eurodollar Rate. If, on or
before any date when a Eurodollar Rate is to be determined for a Ratable
Borrowing, Administrative Agent reasonably determines that the basis for
determining the applicable rate is not available or any Lender reasonably
determines that the resulting rate does not accurately reflect the cost to
that Lender of making or converting Ratable Borrowings at that rate for the
applicable Interest Period, then Administrative Agent shall promptly notify
Borrower and Lenders of that determination (which is conclusive and binding
on Borrower absent manifest error) and the applicable Ratable Borrowing shall
bear interest at the Base Rate. Until Administrative Agent notifies Borrower
that those circumstances no longer exist, Lenders' commitments under this
agreement in respect of Ratable Borrowings to make, or to convert to,
Eurodollar-Rate Borrowings, as the case may be, are suspended.
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3.16 Additional Costs. Each Lender severally and not jointly agrees
to notify Administrative Agent, the other Lenders, and Borrower within 180
days after it has actual knowledge that any circumstances exist that would
give rise to any payment obligation by Borrower under clauses (a) through (c)
below. Although no Lender shall have any liability to Administrative Agent,
any other Lender, or any Company for its failure to give that notice,
Borrower is not obligated to pay any amounts under those clauses that arise,
accrue, or are imposed more than 180 days before that notice to the extent it
is applicable to those amounts. Any Lender demanding payment of any
additional costs under this section must generally be making similar demand
for similar additional costs under credit agreements to which it is party
that contain similar provisions to this section.
(a) Reserves. With respect to any Eurodollar-Rate Borrowing
(i) if any change in any present Legal Requirement, any change in the
interpretation or application of any present Legal Requirement, or any
future Legal Requirement imposes, modifies, or deems applicable (or if
compliance by any Lender with any requirement of any Governmental
Authority results in) any requirement that any reserves (including,
without limitation, any marginal, emergency, supplemental, or special
reserves) be maintained (other than any reserve included in the Reserve
Requirement), and if (ii) those reserves reduce any sums receivable by
that Lender under this agreement or increase the costs incurred by that
Lender in advancing or maintaining any portion of any Eurodollar-Rate
Borrowing, then (iii) that Lender (through Administrative Agent) shall
deliver to Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it for its reduction
or increase (which certificate is conclusive and binding absent manifest
error), and (iv) Borrower shall pay that amount to that Lender within
five Business Days after demand. The provisions of and undertakings and
indemnification in this clause (a) survive for one year after the
satisfaction and payment of the Obligation and termination of this
agreement.
(b) Capital Adequacy. With respect to any Borrowing, if any
change in any present Legal Requirement, any change in the
interpretation or application of any present Legal Requirement, or any
future Legal Requirement regarding capital adequacy, or if compliance by
any Lender with any request, directive, or requirement imposed in the
future by any Governmental Authority regarding capital adequacy, or if
any change in the risk category of this transaction, in any of the
foregoing events or circumstances, reduces the rate of return on its
capital as a consequence of its obligations under this agreement to a
level below that which it otherwise could have achieved (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by it to be material (and it may, in determining the
amount, utilize reasonable assumptions and allocations of costs and
expenses and use any reasonable averaging or attribution method), then
(unless the effect is already reflected in the rate of interest then
applicable under this agreement) Administrative Agent or that Lender
(through Administrative Agent) shall notify Borrower and deliver to
Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it (which certificate
is conclusive and binding absent manifest error), and Borrower shall pay
that amount to Administrative Agent or that Lender within five Business
Days after demand. The provisions of and undertakings and
indemnification in this clause (b) shall survive for one year after the
satisfaction and payment of the Obligation and termination of this
agreement.
(c) Taxes. Subject to Section 3.19, any Taxes payable by
Administrative Agent or any Lender or ruled (by a Governmental
Authority) payable by Administrative Agent or any Lender in respect of
this agreement or any other Credit Document shall, if permitted by Legal
Requirement, be paid by Borrower, together with interest and penalties,
if any, except for Taxes payable on or measured by the overall net
income of Administrative Agent or that Lender (or Administrative Agent
or that Lender, as the case may be, together with any other Person with
whom Administrative Agent or that Lender files a consolidated, combined,
unitary, or similar Tax return) and except for interest and penalties
incurred as a result of the gross negligence or willful misconduct of
Administrative Agent or any Lender. Administrative Agent or that Lender
(through Administrative Agent) shall notify Borrower and deliver to
Borrower a certificate setting forth in reasonable detail the
calculation of the amount of payable Taxes, which certificate is
conclusive and binding (absent manifest error), and
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Borrower shall pay that amount to Administrative Agent for its account
or the account of that Lender, as the case may be within five Business
Days after demand. If Administrative Agent or that Lender subsequently
receives a refund of the Taxes paid to it by Borrower, then the
recipient shall promptly pay the refund to Borrower.
3.17 Change in Legal Requirements. If any Legal Requirement makes it
unlawful for any Lender to make or maintain Eurodollar-Rate Borrowings, then
that Lender shall promptly notify Borrower and Administrative Agent, and (a)
as to undisbursed funds, that requested Borrowing shall be made as a Base-
Rate Borrowing, and (b) as to any outstanding Borrowing (i) if maintaining
the Borrowing until the last day of the applicable Interest Period is
unlawful, the Borrowing shall be converted to a Base-Rate Borrowing as of the
date of notice, in which event Borrower will be required to pay any related
Funding Loss, or (ii) if not prohibited by Legal Requirement, the Borrowing
shall be converted to a Base-Rate Borrowing as of the last day of the
applicable Interest Period, or (iii) if any conversion will not resolve the
unlawfulness, Borrower shall promptly prepay the Borrowing, without penalty
but with related Funding Loss.
3.18 FUNDING LOSS. BORROWER SHALL INDEMNIFY EACH LENDER AGAINST, AND
PAY TO IT UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER. WHEN ANY LENDER
DEMANDS THAT BORROWER PAY ANY FUNDING LOSS, THAT LENDER SHALL DELIVER TO
BORROWER AND ADMINISTRATIVE AGENT A CERTIFICATE SETTING FORTH IN REASONABLE
DETAIL THE BASIS FOR IMPOSING FUNDING LOSS AND THE CALCULATION OF THE AMOUNT,
WHICH CALCULATION IS CONCLUSIVE AND BINDING ABSENT MANIFEST ERROR. THE
PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION IN THIS SECTION SURVIVE
FOR ONE YEAR AFTER THE SATISFACTION AND PAYMENT OF THE OBLIGATION AND
TERMINATION OF THIS AGREEMENT.
3.19 Foreign Lenders, Participants, and Assignees. Each Lender,
Participant (by accepting a participation interest under this agreement), and
Assignee (by executing an Assignment) that is not organized under the Legal
Requirements of the United States of America or one of its states (a)
represents to Administrative Agent and Borrower that (i) no Taxes are
required to be withheld by Administrative Agent or Borrower with respect to
any payments to be made to it in respect of the Obligation and (ii) it has
furnished to Administrative Agent and Borrower two duly completed copies of
either U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any
other form acceptable to Administrative Agent and Borrower that entitles it
to a complete exemption from U.S. federal withholding Tax on all interest or
fee payments under the Credit Documents, and (b) covenants to (i) provide
Administrative Agent and Borrower a new Form 4224, Form 1001, Form W-8, or
other form acceptable to Administrative Agent and Borrower upon the lawful
expiration or obsolescence of any previously delivered form, duly executed
and completed by it, entitling it to a complete exemption from U.S. federal
withholding Tax on all interest and fee payments under the Credit Documents,
and (ii) comply from time to time with all Legal Requirements with regard to
the withholding Tax exemption. If any of the foregoing is not true at any
time or the applicable forms are not provided, then Borrower and
Administrative Agent (without duplication) may deduct and withhold from
interest and fee payments under the Credit Documents any Tax at the maximum
rate under the IRC or other applicable Legal Requirement, and amounts so
deducted and withheld shall be treated as paid to that Lender, Participant,
or Assignee, as the case may be, for all purposes under the Credit Documents.
SECTION 4 FEES.
4.1 Treatment of Fees. The fees described in this Section 4 (a) are
not compensation for the use, detention, or forbearance of money, (b) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this agreement, (c) are payable in accordance with Section 3.1, (d) are non-
refundable, (e) to the fullest extent lawful, bear interest, if not paid when
due, at the Default Rate, and (f) are calculated on the basis of a 365-day
year.
4.2 Fees to Administrative Agent and Arranger. Borrower shall pay
to Administrative Agent and Arranger the arrangement fee, administrative, and
other fees described in the letter agreement (as it may be renewed, extended,
or modified) dated as of May 13, 1998, between Borrower, Administrative
Agent, and Arranger. Those fees are solely for the account of Administrative
Agent and Arranger.
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4.3 Commitment Fee. From and after the Closing Date, Borrower shall
pay to Administrative Agent a commitment fee for Lenders according to each
Lender's Commitment Percentage. The fee is payable as it accrues on the last
day of each March, June, September, and December -- commencing on the first
of those dates that follows the date of this agreement -- and on the Actual-
Termination Date. Each payment of the fee is equal to the following,
determined for the calendar quarter (or portion of a calendar quarter
commencing on the date of this agreement or ending on the Actual-Termination
Date) preceding and including the date it is due: From the Closing Date
until the Actual-Termination Date, the product of (i) the Applicable
Percentage, times (ii) the amount by which the average-daily total
Commitments exceeds the daily average Principal Debt of Ratable Borrowings,
times (iii) a fraction with the number of days in the applicable quarter or
portion of it as the numerator and 365 as the denominator.
4.4 Up-front Fee. On the Closing Date, Borrower shall pay to
Administrative Agent an up-front fee in an amount and to be shared by Lenders
as provided in the letter agreement regarding same, dated as of the Closing
Date, and executed by Borrower and Administrative Agent.
SECTION 5 GUARANTIES. Borrower shall cause all present and future
Restricted Companies (other than Borrower) whether now existing or in the
future formed or acquired as permitted by the Credit Documents, to
unconditionally guarantee the full payment and performance of the Obligation
by execution of a Guaranty.
SECTION 6 CONDITIONS PRECEDENT. No Lender is obligated to fund the
initial Borrowing unless Administrative Agent has received all of the items
described on Schedule 6. In addition, no Lender is obligated to fund (as
opposed to continue or convert) any Borrowing unless on the applicable
Borrowing Date (and after giving effect to the requested Borrowing): (a)
Administrative Agent timely receives a Borrowing Request; (b) all of the
representations and warranties of the Companies in Section 7 are true and
correct in all material respects (unless they speak to a specific date or are
based on facts which have changed by transactions contemplated or expressly
permitted by this agreement); (c) no Material-Adverse Event, Event of
Default, or Potential Default exists; and (d) no limitation in Sections 2.1,
2.2, or 2.3 is exceeded. Upon Administrative Agent's or any Lender's
reasonable request, Borrower shall deliver to Administrative Agent or that
Lender evidence substantiating any of the matters in the Credit Documents
that are necessary to enable Borrower to qualify for the Borrowing. Each
condition precedent in this agreement (including, without limitation, those
on Schedule 6) is material to the transactions contemplated by this
agreement, and time is of the essence with respect to each condition
precedent.
SECTION 7 REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Administrative Agent and Lenders as follows:
7.1 Purpose and Regulation U.
(a) Borrower will use the proceeds of Borrowings for
refinancing the Refinanced Credit Agreement, working capital, and
general corporate purposes.
(b) Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System,
as amended. No part of the proceeds of any Borrowing will be used,
directly or indirectly, for a purpose that violates any Legal
Requirement, including, without limitation, Regulation U.
7.2 Companies. Schedule 7.2 -- as supplemented from time to time by
an amendment to that schedule that is dated, executed, and delivered by
Borrower to Administrative Agent and Lenders to reflect changes in that
schedule as a result of transactions permitted by the Credit Documents --
describes each Company, its ownership structure, and whether it is a
Restricted Company or an Unrestricted Company.
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7.3 Organization and Good Standing. Each Restricted Company is a
corporation duly organized and existing in good standing under the laws of
the jurisdiction of its incorporation as reflected on Schedule 7.2, is duly
qualified as a foreign corporation and in good standing in all jurisdictions
in which the failure to so qualify would be a Material-Adverse Event, has the
corporate power and authority to own its properties and assets and to
transact the business in which it is engaged, and is or will be qualified in
those jurisdictions in which it will transact business in the future and
where the failure to so qualify would be a Material-Adverse Event.
7.4 Authorization and Power. Each Restricted Company has the
corporate power and requisite authority to execute, deliver, and perform the
Credit Documents to be executed by it, is duly authorized to (and has taken
all corporate action necessary to authorize it to) execute, deliver, and
perform those Credit Documents, and is and will continue to be duly
authorized to perform those Credit Documents.
7.5 Conflicts or Consents. Neither the execution and delivery of,
nor the consummation of any transaction contemplated in, nor compliance with
the terms and provisions of, any Credit Document will (a) contravene or
materially conflict with any Legal Requirement to which any Restricted
Company is subject, any judgment, license, order, or permit applicable to any
Restricted Company, or any indenture, loan agreement, mortgage, deed of
trust, or other agreement or instrument to which any Restricted Company is a
party or is subject or by which any Restricted Company may be bound, or (b)
violate any Constituent Document of any Restricted Company. No consent,
approval, authorization, or order of any Governmental Authority or third
party is required in connection with the execution and delivery by any
Restricted Company or any Credit Document or to consummate the transactions
contemplated by it.
7.6 Enforceable Obligations. Each Credit Document is the legal and
binding obligation of the Restricted Company executing it, enforceable in
accordance with its terms except as limited by Debtor Laws.
7.7 Liens. Except for Permitted Liens (a) all of the properties and
assets of each Restricted Company are free and clear of all Liens and (b)
each Restricted Company has and will have good and marketable title to those
properties and assets.
7.8 Financial Condition. Borrower has delivered to Administrative
Agent copies of Borrower's Financials as of and for the period ended on March
1, 1998, which are true and correct in all material respects, fairly present
the consolidated financial condition of the Companies as of that date, and
have been prepared in accordance with GAAP applied on a basis consistent with
that of prior periods except for the exclusion of footnotes and normal
adjustments. There are no obligations, liabilities, or indebtedness
(including contingent and indirect liabilities and obligations or unusual
forward or long-term commitments) of the Companies that are (separately or in
the aggregate) material and are not reflected in those Financials, and no
changes that would be a Material-Adverse Event have occurred in the financial
condition or business of Borrower since March 1, 1998.
7.9 Full Disclosure. There is no material fact that Borrower has
not disclosed to Lenders that is a Material-Adverse Event. Neither the
Current Financials nor any certificate or statement delivered by Borrower to
Administrative Agent in connection with negotiations of this agreement
contains any untrue statement of a material fact or omits to state any
material fact necessary to keep the statements contained in this agreement or
therein from being misleading in any material respect.
7.10 Default. No Event of Default or Potential Default exists.
7.11 Litigation. There is no Litigation pending, or to Borrower's
knowledge threatened, against any Restricted Company that would, if adversely
determined, be a Material-Adverse Event.
7.12 Regulatory Defects. Borrower has advised each Lender, in
writing, of all Regulatory Defects of which Borrower has been advised or has
knowledge.
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7.13 Taxes. Except as previously disclosed to each Lender (a) all
Tax returns required to be filed by any Restricted Company in any
jurisdiction have been filed or will be filed before the date on which the
Tax payable with respect to that return will become delinquent and (b) all
Taxes (including mortgage recording Taxes), assessments, fees, and, other
governmental charges upon Borrower or any Subsidiary or upon any of its or
their properties, income or franchises have been paid before the time that
such Taxes could give rise to a Lien thereon. To the best of Borrower's
knowledge, there is no proposed Tax assessment against Borrower and there is
no basis for such assessment.
7.14 ERISA. (a) No Reportable Event exists with respect to any Plan;
(b) PBGC has not instituted proceedings to terminate any Plan; (c) neither
Borrower, nor any member of the Controlled Group, nor any duly-appointed
administrator of a Plan has (i) incurred any liability to PBGC with respect
to any Plan other than for premiums not yet due or payable or (ii) instituted
or intends to institute proceedings to terminate any Plan under Section 4041
or 4041A of ERISA or withdraw from any Multi-Employer Pension Plan (as
defined in Section 3(37) of ERISA); and (d) each Plan has been maintained and
funded in all material respects in accordance with its terms and with all
applicable provisions of ERISA.
7.15 Compliance. Each Restricted Company is in compliance in all
material respects with all Legal Requirements (including all Environmental
Laws) applicable to it or any of its properties or business, the failure to
comply with which is a Material-Adverse Event. No Company has been notified
by any Governmental Authority that any Company has failed to comply with any
such Legal Requirements, the failure to comply with which would be a
Material-Adverse Event.
7.16 Government Regulation. No Restricted Company is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940, the Interstate Commerce Act,
or any other Legal Requirement (other than Regulation X of the Board of
Governors of the Federal Reserve System) that regulates the incurring by any
Company of Debt, including Legal Requirements relating to common contract
carriers or the sale of electricity, gas, steam, water, or other public
utility services.
7.17 Insider. Neither Borrower nor any Person having "control" (as
that term is defined in 12 U.S.C. Paragraph 375(b)(5) or in regulations
promulgated pursuant thereto) of Borrower is an "executive officer",
"director", or "person who directly or indirectly or in concert with one or
more persons owns, controls, or has the power to vote more than 10% of any
class of voting securities" (as those terms are defined in 12 U.S.C.
Paragraph 375(b) or in regulations promulgated pursuant thereto) of any
Lender, of a bank holding company of which any Lender is a subsidiary, or of
any subsidiary of a bank holding company of which any Lender is a subsidiary,
or of any bank at which any Lender maintains a correspondent account, or of
any bank which maintains a correspondent account with any Lender.
7.18 Environmental Matters. (a) None of the properties of any
Restricted Company has been used at any time during their ownership to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce, process, or in any manner deal with Hazardous Materials,
(b) there are no past, pending or, to the best of Borrower's knowledge,
threatened or potential Environmental Claims against any Restricted Company
or with respect to any properties it owns or controls, (c) there are no
underground storage tanks located on any of the properties owned or
controlled by any Restricted Company, (d) to Borrower's best knowledge, there
never have been any underground storage tanks located on any of the
properties owned or controlled by any Restricted Company, and (e) Borrower
has received no actual (as contrasted with constructive) notification of any
Environmental Claims relating to any property contiguous to any property
owned or controlled by any Restricted Company.
7.19 Labor Matters. Except where not a Material-Adverse Event (a) no
actual or threatened strikes, labor disputes, slow downs, walkouts, work
stoppages, or other concerted interruptions of operations that involve any
employees employed at any time in connection with any Company's business
activities or operations exist, (b) hours worked by and payment made to the
employees of any Company or any Predecessor have not been in violation of the
Fair Labor Standards Act or any other applicable Legal
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Requirements pertaining to labor matters, (c) all payments due from any
Company for employee health and welfare insurance, including, without
limitation, workers compensation insurance, have been paid or accrued as a
liability on its books, (d) the business activities and operations of each
Company are in compliance with OSHA and other applicable health and safety
Legal Requirements.
7.20 Intellectual Property. Except where not a Material-Adverse
Event (a) each Company owns or has the right to use all material licenses,
patents, patent applications, copyrights, service marks, trademarks,
trademark applications, and trade names necessary to continue to conduct its
businesses as presently conducted by it and proposed to be conducted by it
immediately after the date of this agreement, (b) each Company is conducting
its business without infringement or claim of infringement of any license,
patent, copyright, service xxxx, trademark, trade name, trade secret, or
other intellectual property right of others, and (c) no infringement or claim
of infringement by others of any material license, patent, copyright, service
xxxx, trademark, trade name, trade secret, or other intellectual property of
any Restricted Company exists.
7.21 Y2K Issue. Borrower has (a) initiated a review and assessment
of all areas within each Company's business and operations (including those
affected by suppliers and vendors) that could be adversely affected by the
Y2K Issue, (b) developed a plan and time line for addressing the Y2K Issue on
a timely basis, and (c) to date implemented in all material respects that
plan in accordance with that timetable.
SECTION 8 AFFIRMATIVE COVENANTS. For so long as any Lender is committed
to lend under this agreement and until the Obligation has been fully paid and
performed, Borrower covenants and agrees with Administrative Agent and
Lenders that, without first obtaining Required Lenders' consent to the
contrary:
8.1 Certain Items Furnished. Borrower shall furnish the following
to each Lender:
(a) Annual Financials, Etc. Promptly after preparation but no
later than 120 days after the last day of each fiscal year of Borrower,
Financials showing the Companies' consolidated financial condition and
results of operations as of, and for the year ended on, that last day,
accompanied by (i) the opinion, without material qualification, of Ernst
& Young LLP, or other firm of nationally-recognized independent
certified public accountants reasonably acceptable to Required Lenders,
based on an audit using generally accepted auditing standards, that the
consolidated portion of those Financials were prepared in accordance
with GAAP and present fairly, in all material respects, the Companies'
consolidated financial condition and results of operations, and (ii) a
Compliance Certificate.
(b) Quarterly Financials, Etc. Promptly after preparation but
no later than 60 days after the last day of each of the first three
fiscal quarters of Borrower each year, Financials showing the Companies'
consolidated financial condition and results of operations for that
fiscal quarter and for the period from the beginning of the current
fiscal year to the last day of that fiscal quarter, accompanied by a
Compliance Certificate.
(c) Other Reports. Promptly after preparation and
distribution, accurate and complete copies of all reports and other
material communications about material financial matters or material
corporate plans or projections by or for any Company for distribution to
any Governmental Authority or any creditor (i) including each Form 10-K,
10-Q, and S-8 filed with the Securities and Exchange Commission but (ii)
excluding (A) credit, trade, and other reports prepared and distributed
in the ordinary course of business, and (B) information otherwise
furnished to Administrative Agent and Lenders under this agreement.
(d) Plans. As soon as possible and within 30 days after
Borrower knows that any event which would constitute a Reportable Event
has occurred, or that the PBGC has instituted or will institute
proceedings under ERISA to terminate a Plan, deliver a certificate of a
Responsible Officer of Borrower setting forth details as to that
reportable event and the action which Borrower proposes
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to take with respect to it, together with a copy of any notice of that
Reportable Event which may be required to be filed with the PBGC, or any
notice delivered by the PBGC evidencing its intent to institute those
proceedings or any notice to the PBGC that the plan is to be terminated,
as the case may be. For all purposes of this section, Borrower is
deemed to have all knowledge of all facts attributable to the plan
administrator under ERISA.
(e) Other Notices. Promptly upon the occurrence thereof,
notice of:
(i) the occurrence of any condition or event which
constitutes a Potential Default or an Event of Default,
specifying the nature and period of existence thereof;
(ii) that any Person has given any notice to Borrower
with respect to a claimed Potential Default or Event of Default;
or
(iii) that any one or more Persons have given notice to
any Company or taken any other action with respect to claimed
potential defaults or events of default with respect to any
other Indebtedness that in the aggregate exceeds $10,000,000;
and
with respect to any of such events specified in clauses (i), (ii), or
(iii) above, what action the applicable Company has taken, is taking, or
proposes to take.
(f) Other Information. With reasonable promptness, such other
financial data or other data or information related to the business or
operations of any Company as Administrative Agent or any Lender may
reasonably request on the condition that Administrative Agent and each
Lender agrees not to intentionally disclose any information given to it
by any Company that is either proprietary or confidential and that is
prominently marked as such; provided that this restriction does not
apply to information that has at the time in question entered the public
domain and this restriction does not prohibit Administrative Agent or
any Lender from disclosing such information (i) as is required to be
disclosed by Legal Requirement, (ii) to any Lender's auditors,
attorneys, agents, or Affiliates, or (iii) to actual or prospective
Assignees or Participants.
8.2 Use of Credit. Borrower shall use the proceeds of Borrowings
only for the purposes represented in this agreement.
8.3 Y2K Issue. Except where any non-compliance is not a Material-
Adverse Event, Borrower shall (a) cause the Restricted Companies' computer
applications to be unaffected by the Y2K Issue on a timely basis and (b)
promptly notify Administrative Agent if any Restricted Company discovers or
determines that any computer application of any of the Restricted Companies'
suppliers and vendors is not reasonably expected to be unaffected by the Y2K
Issue on a timely basis.
8.4 Maintain Books and Reserves. Each Company shall keep proper
books of record and account and set aside appropriate reserves, all in
accordance with GAAP.
8.5 Inspection of Property. Each Company shall permit any Person
designated by Administrative Agent or any Lender, at Lenders' expense and
with reasonable notice to Borrower, to visit and inspect any of the
properties of any Company, to examine the corporate books and financial
records of any Company and make copies thereof or extracts therefrom and to
discuss the affairs, finances, and accounts of any Company with officers and
employees of Borrower and its independent public accountants, all at such
reasonable times and as often as that Lender may reasonably request.
Administrative Agent and each Lender agrees to keep confidential any
proprietary or confidential information given to it by any Company upon the
same terms and conditions as agreed to with respect to information it obtains
under Section 8.1(f).
8.6 Compliance with Laws, Etc. Each Restricted Company shall (a)
comply in all material respects with all Legal Requirements applicable to its
business, that compliance to include paying before
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the same become delinquent all Taxes imposed upon it or upon its property
(except to the extent contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP,
and so long as the applicable Restricted Company retains good and marketable
title to and the right to use and enjoyment of its properties or other assets
which may be affected by that contest), (b) timely pay all payments due for
labor, services, and materials rendered or furnished in the ordinary course
of business that are secured by inchoate statutory Liens (except to the
extent contested in good faith by appropriate proceedings, and provided that
the applicable Restricted Company retains good and marketable title to and
the right to the use and enjoyment of its properties or other assets which
may be affected by that contest), and (c) Borrower will promptly notify
Administrative Agent if any Restricted Company receives any notice, claim, or
demand from any Governmental Authority that alleges that any Restricted
Company is in violation of any Legal Requirements the result of which
violation is a Material-Adverse Event.
8.7 Maintenance of Existence and Qualifications. Except in respect
of a transaction permitted by Section 9.7, each Restricted Company shall
maintain and preserve its corporate existence and its rights and franchises
in full force and effect and obtain and maintain all permits and licenses
necessary to the proper conduct of its business, including qualifying to do
business as a foreign corporation in all jurisdictions where required by
applicable Legal Requirements (except where the failure to so qualify would
not be a Material-Adverse Event).
8.8 Maintenance of Properties; Insurance. Each Company shall (a)
maintain, preserve, protect, and keep all property used or useful in the
conduct of its business in good condition and in compliance with all
applicable Legal Requirements, (b) from time to time make all repairs,
renewals, and replacements needed to enable the business and operations
carried on in connection with that property to be promptly and advantageously
conducted at all times, (c) carry and maintain in full force and effect at
all times with financially sound and reputable insurers (or in an insurance
fund or by self-insurance authorized by the jurisdiction in which its
operations are carried on) insurance in such amounts (and with co-insurance
and deductibles) as such insurance is usually carried by corporations of
established reputation engaged in the same or similar businesses and
similarly situated, and (d) maintain self-insurance only to the extent that a
prudent corporation of established reputation engaged in the same or similar
businesses and similarly situated would rely upon self-insurance.
8.9 Primary Business. Each Company shall continue to conduct
substantially all of its operations in the same primary businesses as those
in which the Companies currently operate, which includes developing and
operating specialty retail stores offering primarily imported decorative home
furnishings, accessories, and other specialty items for the home either (a)
through Company-owned stores or through franchise arrangements in the United
States and Canada, territories of the United States and Canada, and the
United Kingdom or (b) through franchise arrangements in other countries.
8.10 Transactions With Affiliates. Each Company shall conduct all of
its transactions with any Affiliate on an arm's length basis and pursuant to
the reasonable requirements of that Company's business.
8.11 Compliance with Material Agreements. Each Company shall comply
with all material agreements, indentures, mortgages, or documents binding on
it or affecting its properties or business where the failure to so comply
would be a Material-Adverse Event.
8.12 Operations and Properties. Each Restricted Company shall act
prudently and in accordance with customary industry standards in managing or
operating its assets, properties, business, and investments.
8.13 Access and Inspection. Upon prior written notice, each Company
shall give any representative of Administrative Agent or any Lender access
during all business hours to, and permit such representative to examine, copy
or make excerpts from, any and all books, records, and documents in the
possession of that Company and relating to its affairs, and to inspect any of
the properties of that Company.
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8.14 Additional Guaranties. Borrower shall cause each Restricted
Company formed or acquired after the date of this agreement to execute a
Guaranty within ten days after the date of its formation or acquisition.
8.15 Further Assurances. Upon request of Administrative Agent or any
Lender, each Restricted Company shall promptly and at its expense (a) cure
any defects in the creation, issuance, execution, and delivery of any Credit
Document to which it is intended to be party and (b) execute and deliver to
Administrative Agent or any Lender all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of that Company under the applicable Credit
Document, to further evidence and more fully describe its obligations under
that Credit Document, to correct any omissions in that Credit Document, or to
more fully state the obligations set out in that Credit Document.
8.16 Expenses. Borrower agrees to pay on demand all reasonable costs
and expenses of Administrative Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and amendment
of this agreement, the other Credit Documents, and the other documents to be
delivered hereunder, including the reasonable fees and expenses of counsel
for Administrative Agent with respect thereto and with respect to advising
Administrative Agent as to its Rights and responsibilities under the Credit
Documents. Borrower further agrees to pay on demand all costs and expenses
of Administrative Agent and Lenders, if any (including reasonable attorneys'
fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and
the other documents to be delivered under this agreement.
8.17 INDEMNIFICATION.
(a) AS USED IN THIS SECTION: (i) "INDEMNITOR" MEANS BORROWER
AND (PURSUANT TO ITS GUARANTY) EACH GUARANTOR; (ii) "INDEMNITEE" MEANS
ADMINISTRATIVE AGENT, EACH LENDER, EACH PRESENT AND FUTURE AFFILIATE OF
ADMINISTRATIVE AGENT OR ANY LENDER, EACH PRESENT AND FUTURE
REPRESENTATIVE OF ADMINISTRATIVE AGENT, ANY LENDER, OR ANY OF THOSE
AFFILIATES, AND EACH PRESENT AND FUTURE SUCCESSOR AND ASSIGN OF
ADMINISTRATIVE AGENT, ANY LENDER, OR ANY OF THOSE AFFILIATES OR
REPRESENTATIVES; AND (iii) "INDEMNIFIED LIABILITIES" MEANS ALL PRESENT
AND FUTURE, KNOWN AND UNKNOWN, FIXED AND CONTINGENT, ADMINISTRATIVE,
INVESTIGATIVE, JUDICIAL, AND OTHER CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, INVESTIGATIONS, SUITS, PROCEEDINGS, AMOUNTS PAID IN SETTLEMENT,
DAMAGES, JUDGMENTS, PENALTIES, COURT COSTS, LIABILITIES, AND OBLIGATIONS
-- AND ALL PRESENT AND FUTURE COSTS, EXPENSES, AND DISBURSEMENTS
(INCLUDING, WITHOUT LIMITATION, ALL REASONABLE OUTSIDE ATTORNEYS' FEES
AND EXPENSES WHETHER OR NOT ANY SUIT OR OTHER PROCEEDING EXISTS OR ANY
INDEMNITEE IS PARTY TO ANY SUIT OR OTHER PROCEEDING) IN ANY WAY RELATED
TO ANY OF THE FOREGOING -- THAT MAY AT ANY TIME BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST ANY INDEMNITEE AND IN ANY WAY RELATING TO OR
ARISING OUT OF ANY (A) CREDIT DOCUMENT, TRANSACTION CONTEMPLATED BY ANY
CREDIT DOCUMENT, (B) ENVIRONMENTAL CLAIM IN ANY WAY RELATED TO ANY
COMPANY, PREDECESSOR, REAL PROPERTY, OR ACT, OMISSION, STATUS,
OWNERSHIP, OR OTHER RELATIONSHIP, CONDITION, OR CIRCUMSTANCE
CONTEMPLATED BY, CREATED UNDER, OR ARISING PURSUANT TO OR IN CONNECTION
WITH ANY CREDIT DOCUMENT, OR (C) INDEMNITEE'S SOLE OR CONCURRENT
ORDINARY NEGLIGENCE.
(b) EACH INDEMNITOR SHALL JOINTLY AND SEVERALLY INDEMNIFY EACH
INDEMNITEE FROM AND AGAINST, PROTECT AND DEFEND EACH INDEMNITEE FROM AND
AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM AND AGAINST, AND ON DEMAND
PAY OR REIMBURSE EACH INDEMNITEE FOR, ALL INDEMNIFIED LIABILITIES.
(c) THE FOREGOING PROVISIONS (i) ARE NOT LIMITED IN AMOUNT EVEN
IF THAT AMOUNT EXCEEDS THE OBLIGATION, (ii) INCLUDE, WITHOUT LIMITATION,
REASONABLE FEES AND EXPENSES OF ATTORNEYS AND OTHER COSTS AND EXPENSES
OF LITIGATION OR PREPARING FOR LITIGATION AND DAMAGES
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OR INJURY TO PERSONS, PROPERTY, OR NATURAL RESOURCES ARISING UNDER ANY
STATUTORY OR COMMON LEGAL REQUIREMENT, PUNITIVE DAMAGES, FINES, AND
OTHER PENALTIES, AND (iii) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF
ANY HAZARDOUS SUBSTANCE, AND (iv) ARE NOT AFFECTED BY ANY INDEMNITEE'S
INVESTIGATION, ACTUAL OR CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING, OR
WAIVER.
(d) However, no Indemnitee is entitled to be indemnified under
the Credit Documents for its own fraud, gross negligence, or wilful
misconduct.
(e) THE PROVISIONS OF AND INDEMNIFICATION AND OTHER
UNDERTAKINGS UNDER THIS SECTION SURVIVE SATISFACTION OF THE OBLIGATION
AND THE TERMINATION OF THE CREDIT DOCUMENTS.
SECTION 9 NEGATIVE COVENANTS. For so long as any Lender is committed to
lend under this agreement and until the Obligation has been fully paid and
performed, Borrower covenants and agrees with Administrative Agent and
Lenders that, without first obtaining Required Lenders' consent to the
contrary, Borrower may not permit any of the following to occur or exist
directly or indirectly:
9.1 Payroll Taxes. No Company may use any proceeds of any Borrowing
to pay the wages of employees unless a timely payment to or deposit with the
United States of America of all amounts of Tax required to be deducted and
withheld with respect to such wages is also made.
9.2 Restricted Payments. No Company may declare, make, or pay any
Restricted Payment (a) while any Default Condition exists or (b) that would
cause the total Restricted Payments by all Companies during any fiscal year
of the Companies to exceed $30,000,000 for all of the Companies.
9.3 Lien. No Company may create, assume, or suffer to exist any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, without equally and ratably securing the Obligation, except without
double-counting, any of the following (the "Permitted Liens"):
(a) Liens that are for Taxes not yet due and delinquent or that
are being actively contested in good faith by appropriate proceedings so
long as the existence of those Liens does not affect the applicable
Company's good and marketable title to or use or enjoyment of the
property or assets burdened by those Liens.
(b) Other Liens arising in the ordinary course of its business
or the ownership of its property and assets (including easements and
similar encumbrances and Liens upon shipped goods paid for by a
documentary letter of credit) that were not incurred in connection with
the borrowing of money, the obtaining of advances or credit, or the
payment of the deferred purchase price of property or assets, that do
not in the aggregate materially interfere with the operation of the
applicable Company's business, and that are not a Material-Adverse
Event.
(c) Any Lien existing on any property of any Person at the time
it becomes a Company so long as (a) that Lien does not encumber any
other property of any Company and (b) the aggregate amount of Debt
secured by that Lien never exceeds 100% of the fair market value of that
property.
(d) Any Lien on any property acquired, constructed, or improved
by any Company after the date of this agreement and created
contemporaneously with or within 12 months after the date of that
acquisition, completion of construction, or improvement to secure Debt
assumed or incurred to finance up to 100% of the purchase price or cost
of construction or improvement of that property so long as that Lien
encumbers only the property so acquired or constructed and any
improvements to that property.
(e) Liens on securitized receivables.
(f) Other Liens existing on the date of this agreement and
disclosed on Schedule 9.3.
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(g) Any Lien described in clauses (c) through (f) above
resulting from renewing, extending, or refunding outstanding Debt so
long as the principal amount of the Debt so secured is not increased and
that Lien is not extended to any other property.
(h) Any Lien arising in connection with court proceedings so
long as (i) the execution of that Lien is effectively stayed and that
Lien is being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP
and (ii) the existence of that Lien does not affect the applicable
Company's title to or use or enjoyment of the property or assets
burdened by that Lien.
(i) Any Lien described in clauses (c) or (d) above resulting
from renewing, extending, or refunding outstanding Debt so long as the
principal amount of the Debt so secured is not increased and that Lien
is not extended to any other property.
(j) Any other Liens incurred in connection with the borrowing
of money or any other Liens so long as the total Debt secured by Liens
under this clause (j) never exceeds 5% of the Tangible Assets of the
Companies.
9.4 Subsidiary Debt. No Subsidiary (other than a securitization
Subsidiary) may create, incur, assume, or suffer to exist any Debt other than
(a) industrial development revenue bonds existing on the date of this
agreement and (b) other Debt so long as (i) the incurrence or existence of
that Debt is not a Default Condition and (ii) the total Debt under this
clause (b) may never collectively exceed 10% of the Tangible-Net Worth of the
Companies.
9.5 Guaranteed Debt. No Company may have or commit to have any
guaranties, endorsements, and other contingent obligations for Debt of any
other Person except the following so long as the total principal amount
guaranteed (including any unfunded principal under committed lines of credit
or similar arrangements) in respect of all of the following never exceeds the
Companies' Tangible-Net Worth ("Permitted Guaranties"):
(a) This Transaction. Guaranties delivered under this
agreement.
(b) Existing Guaranties. The guaranties that are existing on
the date of this agreement (other than in respect of the Debt under the
Refinanced Credit Agreement and other Debt that is being refinanced by
Borrowings) and all renewals, extensions, amendments, modifications, and
refinancings of (but not any principal increases after the date of this
agreement to) any of that Debt.
(c) Companies. Guaranties of Debt of any Restricted Company to
the extent that the creation of that Debt constitutes Debt permitted
under Section 9.4.
(d) Secured Debt. Guaranties of Debt that is secured by assets
of the primary obligor having a fair market value at least equal to the
amount of that Debt, as determined by an independent qualified appraiser
selected by Borrower (which appraisal, at the reasonable request of
Administrative Agent and at Borrower's expense, shall be promptly
updated no more than once during each 12-month period ending on or after
the Closing Date).
9.6 Sales of Assets. No Restricted Company may sell, transfer, or
otherwise dispose of (or commit to do so) any of its assets (including any
equity ownership of any other Company) other than (a) sales and dispositions
in the ordinary course of business for a fair and adequate consideration, (b)
sales of assets which are obsolete or are no longer in use and which are not
significant to the continuation of that Restricted Company's business, (c)
sales and dispositions from any Restricted Company to Borrower or any
Guarantor, (e) sales of accounts receivable of any Restricted Company
pursuant to an accounts receivable financing or securitization facility, and
(f) dispositions of assets, the net proceeds of which do not exceed 10% of
Tangible Assets of the Companies in any fiscal year.
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9.7 Mergers and Consolidations. No Restricted Company may merge or
consolidate with any other Person other than:
(a) Borrower may merge or consolidate with or into any other
corporation so long as (i) the successor corporation is a United States
entity that expressly assumes the Obligation in writing or Borrower is
the continuing or surviving entity and (ii) no related Default Condition
exists.
(b) Any other Company may merge or consolidate with or into any
other corporation so long as (i) the successor corporation becomes a
Subsidiary of Borrower upon that merger or consolidation and (ii) no
related Default Condition exists.
(c) Any Company may merge or consolidate with or into any other
Company so long as (i) Borrower is the surviving or continuing
corporation if involved, (ii) any other Restricted Company is the
surviving or continuing corporation if involved, and (iii) no related
Default Condition exists.
9.8 Employee Plans. No Company may permit any of the events or
circumstances described in Section 7.14 to exist or occur.
9.9 Assignment. No Company may assign or transfer any of its
Rights, duties, or obligations under any of the Credit Documents.
9.10 Accounting Methods. No Company may change any material aspect
of its method of accounting except to conform to changes in GAAP or to
conform any new Subsidiary's accounting methods to Borrower's accounting
methods.
9.11 Change in Nature of Business. No Company may make any material
change in the nature of its business as conducted on the date of this
agreement.
9.12 Government Regulations. No Company may conduct its business in
a way that it becomes regulated under the Investment Company Act of 1940 or
the Public Utility Holding Company Act of 1935.
SECTION 10 FINANCIAL COVENANTS. For so long as any Lender is committed to
lend under this agreement and until the Obligation has been fully paid and
performed, Borrower covenants and agrees with Administrative Agent and
Lenders that, without first obtaining Required Lenders' consent to the
contrary, it may not directly or indirectly permit:
10.1 Tangible-Net Worth. The Companies' Tangible-Net Worth ever to
be less than the sum of (a) $305,000,000, plus (b) 50% of the Companies'
cumulative Net Income (without deduction for losses) after August 29, 1998,
plus (c) 75% of the net (i.e., gross less usual and customary underwriting,
placement, and other related costs and expenses) proceeds of the new issuance
(i.e., not the re-issuance of treasury stock or the issuance of stock upon
conversion of convertible notes) of any equity securities by Borrower after
the date of this agreement.
10.2 Current Ratio. The ratio of the Companies' consolidated current
assets to current liabilities ever to be less than 2.00 to 1.00.
10.3 Leverage Ratio. The Companies' Leverage Ratio ever to exceed
3.50 to 1.00.
10.4 Fixed-Charge Coverage. The Companies' Fixed-Charge-Coverage
Ratio ever to be less than 1.25 to 1.00.
SECTION 11 EVENTS OF DEFAULT. The term "Event of Default" means the
occurrence of any one or more of the following:
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11.1 Payment of Obligation. Borrower's failure or refusal to pay (a)
any principal of any Note on or before the date due or (b) any other part of
the Obligation on or before three Business Days after the date due.
11.2 Covenants. Any Company's failure or refusal to punctually and
properly perform, observe, and comply with any covenant (other than covenants
to pay the Obligation) applicable to it:
(a) In Sections 8.2, 8.7, 9.1 through 9.9, 9.12, or 10; or
(b) In Sections 8.1 or 8.14 and that failure or refusal
continues for ten days after the earlier of either any Company knows
(or, with the exercise of reasonable diligence, should know) of it or
any Company is notified of it by Administrative Agent or any Lender; or
(c) In any other provision of any Credit Document, and that
failure or refusal continues for 30 days after the earlier of either any
Company knows (or, with the exercise of reasonable diligence, should
know) of it or any Company is notified of it by Administrative Agent or
any Lender.
11.3 Debtor Relief. Any Restricted Company (a) becomes insolvent,
(b) fails to pay its Debts generally as they become due, (c) voluntarily
seeks, consents to, or acquiesces in the benefit of any Debtor Law, or (d)
becomes a party to or is made the subject of any proceeding provided for by
any Debtor Law (except as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Administrative Agent or any Lender
granted in the Credit Documents (unless, if the proceeding is involuntary,
the applicable petition is dismissed within 60 days after its filing).
11.4 Judgments and Attachments. Where the uninsured amounts in
controversy or of any judgments, as the case may be, exceed (from and after
the Closing Date and individually or collectively for all of the Companies)
$10,000,000, the Companies fail (a) to have discharged, within 60 days after
its commencement, any attachment, sequestration, or similar proceeding
against any assets of any Company or (b) to pay any money judgment against
any Company within ten days before the date on which any Company's assets may
be lawfully sold to satisfy that judgment.
11.5 Government Action. Where either it is a Material-Adverse Event
or the fair value of the assets involved exceed (from and after the Closing
Date and individually or collectively for all of the Restricted Companies)
(a) $10,000,000 in respect of a final non-appealable order is issued by any
Governmental Authority (including the United States Justice Department)
seeking to cause any Company to divest a significant portion of its assets
under any antitrust, restraint of trade, unfair competition, industry
regulation, or similar Legal Requirements, or (b) $10,000,000 in respect of
any Governmental Authority condemning, seizing, or otherwise appropriating,
or taking custody or control of all or any substantial portion of any
Company's assets.
11.6 Misrepresentation. Any material representation or warranty made
by any Company in any Credit Document at any time proves to have been
materially incorrect when made.
11.7 Ownership of Restricted Companies. Except as a result of
transactions permitted by this agreement, one or more Restricted Companies
fail to own, beneficially and of record, with power to vote, a percentage of
the issued and outstanding shares of capital stock (or similar ownership
interest in respect of Restricted Companies that are not corporations) of
each Subsidiary of Borrower that is a Restricted Company, which percentage is
(a) the percentage owned by the Restricted Companies as reflected on Schedule
7.2 as of the date of this agreement or (b) the percentage from time to time
acquired by the Restricted Companies (which must be at least a majority).
11.8 Change of Control of Borrower. The individuals who, as of the
date of this agreement, constitute the members of Borrower's board of
directors (for purposes of this Section 11.8, the "incumbent board") do not
constitute or cease for any reason to constitute at least 50% of:
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(a) Borrower's board of directors; or
(b) The surviving corporation's board of directors in the event
of any merger or consolidation (if permitted by Section 9.7) involving
Borrower; or
(c) The controlling entity's board of directors, the comparable
body if there is no board of directors, or voting control if there is no
comparable body, in the event that the surviving corporation under
clause (b) above is directly or indirectly controlled by that entity.
For purposes of this Section 11.8, any individual who becomes a member of the
board of directors or comparable body or who obtains a voting interest, as
applicable under clauses (a), (b), or (c) above, after the date of this
agreement and whose appointment to the board, or nomination for election, was
approved or ratified by a vote of the individuals comprising at least 50% of
the incumbent board shall be deemed to be a member of the incumbent board.
11.9 Other Obligations. In respect of any indebtedness, liabilities,
or obligations (other than the Obligation) individually or collectively of at
least $10,000,000 (a) any Company fails to make any payment when due, or (b)
any default or other event or condition occurs or exists (other than a
mandatory prepayment as a result of disposition of assets if permitted by the
Credit Documents) beyond the applicable grace or cure period, the effect of
which is to cause or to permit any holder of any such indebtedness,
liabilities, or obligations to cause (whether or not it elects to cause) any
of same to become due before its stated maturity or regularly scheduled
payment dates, or (c) any such indebtedness, liabilities, or obligations is
declared to be due and payable or required to be prepaid by any Company
before its stated maturity (other than a mandatory prepayment as a result of
disposition of assets or "cash sweep" provisions to the extent, in each case,
permitted by the Credit Documents).
11.10 SEC Reporting Requirements. Borrower fails to comply with any
applicable reporting requirements of the Securities Exchange Act of 1934 for
which the failure to report would constitute a Material-Adverse Event.
11.11 Validity and Enforceability. Once executed, this agreement, any
Note, or any Guaranty ceases to be in full force and effect in any material
respect or is declared to be null and void or its validity or enforceability
is contested in writing by any Company party to it or any Company party to it
denies in writing that it has any further liability or obligations under it
except in accordance with that document's express provisions or as the
appropriate parties under Section 14.9 below may otherwise agree in writing.
SECTION 12 RIGHTS AND REMEDIES.
12.1 Remedies Upon Event of Default.
(a) Debtor Relief. If an Event of Default exists under Section
11.3, the commitment to extend credit under this agreement automatically
terminates, the entire unpaid balance of the Obligation automatically
becomes due and payable without any action of any kind whatsoever.
(b) Other Events of Default. If any Event of Default exists,
subject to the terms of Section 13.5(b), Administrative Agent may (with
the consent of, and must, upon the request of, Required Lenders), do any
one or more of the following: (i) If the maturity of the Obligation has
not already been accelerated under Section 12.1(a), declare the entire
unpaid balance of all or any part of the Obligation immediately due and
payable, whereupon it is due and payable; (ii) terminate the commitments
of Lenders to extend credit under this agreement; (iii) reduce any claim
to judgment; and (iv) exercise any and all other legal or equitable
Rights afforded by the Credit Documents, by applicable Legal
Requirements, or in equity.
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12.2 Company Waivers. To the extent permitted by Legal Requirement,
Borrower and (pursuant to its Guaranty) each Guarantor waives presentment and
demand for payment, protest, notice of intention to accelerate, notice of
acceleration, and notice of protest and nonpayment, and agrees that its
liability with respect to all or any part of the Obligation is not affected
by any renewal or extension in the time of payment of all or any part of the
Obligation, by any indulgence, or by any release or change in any security
for the payment of all or any part of the Obligation.
12.3 Performance by Administrative Agent. If any Company's covenant,
duty, or agreement is not performed in accordance with the terms of the
Credit Documents then, with written notice to Borrower, Administrative Agent
may, while an Event of Default exists, at its option (but subject to the
approval of Required Lenders), perform or attempt to perform that covenant,
duty, or agreement on behalf of that Company (and any amount reasonably
expended by Administrative Agent in its performance or attempted performance
is payable by the Companies, jointly and severally, to Administrative Agent
on demand, becomes part of the Obligation, and bears interest at the Default
Rate from the date of Administrative Agent's expenditure until paid).
However, Administrative Agent does not assume and shall never have, except by
its express written consent, any liability or responsibility for the
performance of any Company's covenants, duties, or agreements.
12.4 Not in Control. Nothing in any Credit Documents gives or may be
deemed to give to Administrative Agent or any Lender the Right to exercise
control over any Company's real property, other assets, affairs, or
management or to preclude or interfere with any Company's compliance with any
Legal Requirement or require any act or omission by any Company that may be
harmful to Persons or property. Any "Material-Adverse Event" or other
materiality or substantiality qualifier of any representation, warranty,
covenant, agreement, or other provision of any Credit Document is included
for credit documentation purposes only and does not imply or be deemed to
mean that Administrative Agent or any Lender acquiesces in any non-compliance
by any Company with any Legal Requirement, document, or otherwise or does not
expect the Companies to promptly, diligently, and continuously carry out all
appropriate removal, remediation, compliance, closure, or other activities
required or appropriate in accordance with all Environmental Requirements.
Administrative Agent's and Lenders' power is limited to the Rights provided
in the Credit Documents. All of those Rights exist solely (and may be
exercised in a manner calculated by Administrative Agent or Lenders in their
respective good faith business judgment) to assure payment and performance of
the Obligation.
12.5 Course of Dealing. The acceptance by Administrative Agent or
Lenders of any partial payment on the Obligation is not a waiver of any Event
of Default then existing. No waiver by Administrative Agent, Required
Lenders, or Lenders of any Event of Default is a waiver of any other then-
existing or subsequent Event of Default. No delay or omission by
Administrative Agent, Required Lenders, or Lenders in exercising any Right
under the Credit Documents impairs that Right or is a waiver thereof or any
acquiescence therein, nor will any single or partial exercise of any Right
preclude other or further exercise thereof or the exercise of any other Right
under the Credit Documents or otherwise.
12.6 Cumulative Rights. All Rights available to Administrative
Agent, Required Lenders, and Lenders under the Credit Documents are
cumulative of and in addition to all other Rights granted to Administrative
Agent, Required Lenders, and Lenders at law or in equity, whether or not any
of the Obligation is due and payable and whether or not Administrative Agent,
Required Lenders, or Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Credit Documents.
12.7 Application of Proceeds. Any and all proceeds ever received by
Administrative Agent or Lenders from the exercise of any Rights pertaining to
the Obligation shall be applied to the Obligation in accordance with Section
3.
12.8 Certain Proceedings. Borrower shall promptly execute and
deliver, or cause the execution and delivery of, all applications,
certificates, instruments, registration statements, and all other documents
and papers Administrative Agent or Required Lenders reasonably request in
connection with the obtaining of any
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consent, approval, registration (other than securities laws registrations),
qualification, permit, license, or authorization of any Governmental
Authority or other Person necessary or appropriate for the effective exercise
of any Rights under the Credit Documents. Because Borrower agrees that
Administrative Agent's and Required Lenders' remedies at law for failure of
Borrower to comply with the provisions of this section would be inadequate
and that failure would not be adequately compensable in damages, Borrower
agrees that the covenants of this section may be specifically enforced.
12.9 Expenditures by Lenders. Any sums reasonably spent by
Administrative Agent or any Lender in the exercise of any Right under any
Credit Document is payable by the Companies to Administrative Agent within
five Business Days after demand, becomes part of the Obligation, and bears
interest at the Default Rate from the date spent until the date repaid.
12.10 Limitation of Liability. Neither Administrative Agent nor any
Lender shall be liable to any Company for any amounts representing indirect,
special, or consequential damages suffered by any Company, except where such
amounts are based substantially on gross negligence or willful misconduct by
Administrative Agent or that Lender, but then only to the extent any damages
resulting from such gross negligence or wilful misconduct are covered by
Administrative Agent's and that Lenders' fidelity bond or other insurance.
SECTION 13 ADMINISTRATIVE AGENT AND LENDERS.
13.1 Administrative Agent.
(a) Appointment. Each Lender appoints Administrative Agent
(including, without limitation, each successor Administrative Agent in
accordance with this Section 13) as its nominee and agent to act in its
name and on its behalf (and Administrative Agent and each such successor
accepts that appointment): (i) To act as its nominee and on its behalf
in and under all Credit Documents; (ii) to arrange the means whereby its
funds are to be made available to Borrower under the Credit Documents;
(iii) to take any action that it properly requests under the Credit
Documents (subject to the concurrence of other Lenders as may be
required under the Credit Documents); (iv) to receive all documents and
items to be furnished to it under the Credit Documents; (v) to be the
secured party, mortgagee, beneficiary, recipient, and similar party in
respect of any collateral, if any, for the benefit of Lenders; (vi) to
promptly distribute to it all material information, requests, documents,
and items received from any Company under the Credit Documents; (vii) to
promptly distribute to it its ratable part of each payment or prepayment
(whether voluntary, as proceeds of collateral upon or after foreclosure,
as proceeds of insurance thereon, or otherwise) in accordance with the
terms of the Credit Documents; and (viii) to deliver to the appropriate
Persons requests, demands, approvals, and consents received from it.
However, Administrative Agent may not be required to take any action
that exposes it to personal liability or that is contrary to any Credit
Document or applicable Legal Requirement.
(b) Successor. Administrative Agent may assign all of its
Rights and obligations as Administrative Agent under the Credit
Documents to any of its Affiliates, which Affiliate shall then be the
successor Administrative Agent under the Credit Documents.
Administrative Agent may also voluntarily resign and shall resign upon
the request of Required Lenders for cause (i.e., Administrative Agent is
continuing to fail to perform its responsibilities as Administrative
Agent under the Credit Documents). If the initial or any successor
Administrative Agent ever ceases to be a party to this agreement or if
the initial or any successor Administrative Agent ever resigns (whether
voluntarily or at the request of Required Lenders), then Required
Lenders shall (which, if no Event of Default or Potential Default
exists, is subject to Borrower's approval that may not be unreasonably
withheld) appoint the successor Administrative Agent from among Lenders
(other than the resigning Administrative Agent). If Required Lenders
fail to appoint a successor Administrative Agent within 30 days after
the resigning Administrative Agent has given notice of resignation or
Required Lenders have removed the resigning Administrative Agent, then
the resigning Administrative Agent may
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(subject, if no Event of Default or Potential Default exists, to
Borrower's approval that may not be unreasonably withheld), on behalf of
Lenders, appoint a successor Administrative Agent, which must be a
commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of
condition). Upon its acceptance of appointment as successor
Administrative Agent, the successor Administrative Agent succeeds to and
becomes vested with all of the Rights of the prior Administrative Agent,
and the prior Administrative Agent is discharged from its duties and
obligations of Administrative Agent under the Credit Documents, and each
Lender shall execute the documents that any Lender, the resigning or
removed Administrative Agent, or the successor Administrative Agent
reasonably request to reflect the change. After any Administrative
Agent's resignation or removal as Administrative Agent under the Credit
Documents, the provisions of this section inure to its benefit as to any
actions taken or not taken by it while it was Administrative Agent under
the Credit Documents.
(c) Rights as Lender. Administrative Agent, in its capacity as
a Lender, has the same Rights under the Credit Documents as any other
Lender and may exercise those Rights as if it were not acting as
Administrative Agent. Administrative Agent's resignation or removal
does not impair or otherwise affect any Rights that it has or may have
in its capacity as an individual Lender. Each Lender and Borrower agree
that Administrative Agent is not a fiduciary for Lenders or for Borrower
but is simply acting in the capacity described in this agreement to
alleviate administrative burdens for Borrower and Lenders, that
Administrative Agent has no duties or responsibilities to Lenders or
Borrower except those expressly set forth in the Credit Documents, and
that Administrative Agent in its capacity as a Lender has the same
Rights as any other Lender.
(d) Other Activities. Administrative Agent or any Lender may
now or in the future be engaged in one or more loan, letter of credit,
leasing, or other financing transactions with Borrower, act as trustee
or depositary for Borrower, or otherwise be engaged in other
transactions with Borrower (collectively, the "other activities") not
the subject of the Credit Documents. Without limiting the Rights of
Lenders specifically set forth in the Credit Documents, neither
Administrative Agent nor any Lender is responsible to account to the
other Lenders for those other activities, and no Lender shall have any
interest in any other Lender's activities, any present or future
guaranties by or for the account of Borrower that are not contemplated
by or included in the Credit Documents, any present or future offset
exercised by Administrative Agent or any Lender in respect of those
other activities, any present or future property taken as security for
any of those other activities, or any property now or hereafter in
Administrative Agent's or any other Lender's possession or control that
may be or become security for the obligations of Borrower arising under
the Credit Documents by reason of the general description of
indebtedness secured or of property contained in any other agreements,
documents, or instruments related to any of those other activities (but,
if any payments in respect of those guaranties or that property or the
proceeds thereof is applied by Administrative Agent or any Lender to
reduce the Obligation, then each Lender is entitled to share ratably in
the application as provided in the Credit Documents).
13.2 Expenses. Each Lender shall pay its Default Percentage of any
reasonable expenses (including court costs, reasonable attorneys' fees and
other costs of collection) incurred by Administrative Agent or Swing Lender
(while acting in such capacity) in connection with any of the Credit
Documents if Administrative Agent or Swing Lender is not reimbursed from
other sources within 30 days after incurrence. Each Lender is entitled to
receive its Default Percentage of any reimbursement that it makes to
Administrative Agent or Swing Lender if Administrative Agent or Swing Lender
is subsequently reimbursed from other sources.
13.3 Proportionate Absorption of Losses. Except as otherwise
provided in the Credit Documents, nothing in the Credit Documents gives any
Lender any advantage over any other Lender insofar as the Obligation is
concerned or relieves any Lender from ratably absorbing any losses sustained
with respect to the Obligation (except to the extent unilateral actions or
inactions by any Lender result in Borrower
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or any other obligor on the Obligation having any credit, allowance, setoff,
defense, or counterclaim solely with respect to all or any part of that
Lender's part of the Obligation).
13.4 Delegation of Duties; Reliance. Lenders may perform any of
their duties or exercise any of their Rights under the Credit Documents by or
through Administrative Agent, and Lenders and Administrative Agent may
perform any of their duties or exercise any of their Rights under the Credit
Documents by or through their respective Representatives. Administrative
Agent, Lenders, and their respective Representatives (a) are entitled to rely
upon (and shall be protected in relying upon) any written or oral statement
believed by it or them to be genuine and correct and to have been signed or
made by the proper Person and, with respect to legal matters, upon opinion of
counsel selected by Administrative Agent or that Lender (but nothing in this
clause (a) permits Administrative Agent to rely on (i) oral statements if a
writing is required by this agreement or (ii) any other writing if a specific
writing is required by this agreement), (b) are entitled to deem and treat
each Lender as the owner and holder of its portion of the Obligation for all
purposes until written notice of the assignment or transfer is given to and
received by Administrative Agent (and any request, authorization, consent, or
approval of any Lender is conclusive and binding on each subsequent holder,
assignee, or transferee of or Participant in that Lender's portion of the
Obligation until that notice is given and received), (c) are not deemed to
have notice of the occurrence of an Event of Default unless a responsible
officer of Administrative Agent, who handles matters associated with the
Credit Documents and transactions thereunder, has actual knowledge or
Administrative Agent has been notified by a Lender or Borrower, and (d) are
entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other experts selected by Administrative Agent
and are not liable for any action taken or not taken in good faith by it in
accordance with the advice of counsel, accountants, or experts.
13.5 Limitation of Administrative Agent's Liability.
(a) Exculpation. Neither Administrative Agent nor any of its
Affiliates or Representatives will be liable for any action taken or
omitted to be taken by it or them under the Credit Documents in good
faith and believed by it or them to be within the discretion or power
conferred upon it or them by the Credit Documents or be responsible for
the consequences of any error of judgment (except for fraud, gross
negligence, or willful misconduct), and neither Administrative Agent nor
any of its Affiliates or Representatives has a fiduciary relationship
with any Lender by virtue of the Credit Documents (but nothing in this
agreement negates the obligation of Administrative Agent to account for
funds received by it for the account of any Lender).
(b) Indemnity. Unless indemnified to its satisfaction against
loss, cost, liability, and expense, Administrative Agent may not be
compelled to do any act under the Credit Documents or to take any action
toward the execution or enforcement of the powers thereby created or to
prosecute or defend any suit in respect of the Credit Documents. If
Administrative Agent requests instructions from Lenders, or Required
Lenders, as the case may be, with respect to any act or action in
connection with any Credit Document, Administrative Agent is entitled to
refrain (without incurring any liability to any Person by so refraining)
from that act or action unless and until it has received instructions.
In no event, however, may Administrative Agent or any of its
Representatives be required to take any action that it or they determine
could incur for it or them criminal or onerous civil liability. Without
limiting the generality of the foregoing, no Lender has any right of
action against Administrative Agent as a result of Administrative
Agent's acting or refraining from acting under this agreement in
accordance with instructions of Required Lenders.
(c) Reliance. Administrative Agent is not responsible to any
Lender or any Participant for, and each Lender represents and warrants
that it has not relied upon Administrative Agent in respect of, (i) the
creditworthiness of any Company and the risks involved to that Lender,
(ii) the effectiveness, enforceability, genuineness, validity, or the
due execution of any Credit Document (except by Administrative Agent),
(iii) any representation, warranty, document, certificate, report, or
statement made therein (except by Administrative Agent) or furnished
thereunder or in connection therewith, (iv) the adequacy of any
collateral now or hereafter securing the Obligation or the
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existence, priority, or perfection of any Lien now or hereafter granted
or purported to be granted on the collateral under any Credit Document,
or (v) observation of or compliance with any of the terms, covenants, or
conditions of any Credit Document on the part of any Company. EACH
LENDER AGREES TO INDEMNIFY ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES
AND HOLD THEM HARMLESS FROM AND AGAINST (BUT LIMITED TO SUCH LENDER'S
COMMITMENT PERCENTAGE OF) ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE
EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY
RELATING TO OR ARISING OUT OF THE CREDIT DOCUMENTS OR ANY ACTION TAKEN
OR OMITTED BY THEM UNDER THE CREDIT DOCUMENTS IF ADMINISTRATIVE AGENT
AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY
COMPANY. ALTHOUGH ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES HAVE THE
RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN
ORDINARY NEGLIGENCE, ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES TO NOT
HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR
OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
13.6 Event of Default. While an Event of Default exists, Lenders
agree to promptly confer in order that Required Lenders or Lenders, as the
case may be, may agree upon a course of action for the enforcement of the
Rights of Lenders. Administrative Agent is entitled to act or refrain from
taking any action (without incurring any liability to any Person for so
acting or refraining) unless and until it has received instructions from
Required Lenders. In actions with respect to any Company's property,
Administrative Agent is acting for the ratable benefit of each Lender.
13.7 Limitation of Liability. No Lender or any Participant will
incur any liability to any other Lender or Participant except for acts or
omissions in bad faith, and neither Administrative Agent nor any Lender or
Participant will incur any liability to any other Person for any act or
omission of any other Lender or any Participant.
13.8 Relationship of Lenders. The Credit Documents do not create a
partnership or joint venture among Administrative Agent and Lenders or among
Lenders.
13.9 Co-Agents. Certain Lenders are named on the cover page and in
the introductory paragraph of this agreement as "Co-Agents." None of them,
in that capacity, assumes any responsibility or obligation under this
agreement for syndication, servicing, enforcement, or collection of any of
the Obligation, nor any other duties, as agents for Lenders.
13.10 Benefits of Agreement. None of the provisions of this Section
13 inure to the benefit of any Company or any other Person except
Administrative Agent and Lenders. Therefore, no Company or any other Person
is responsible or liable for, entitled to rely upon, or entitled to raise as
a defense, in any manner whatsoever, the failure of Administrative Agent or
any Lender to comply with these provisions.
SECTION 14 MISCELLANEOUS.
14.1 Nonbusiness Days. Any payment or action that is due under any
Credit Document on a non-Business Day may be delayed until the next-
succeeding Business Day (but interest accrues on any payment until it is
made). However, if the payment concerns a Eurodollar-Rate Borrowing and if
the next-succeeding Business Day is in the next calendar month, then that
payment must be made on the next-preceding Business Day.
14.2 Communications. Unless otherwise specified, any communication
from one party to another under any Credit Document must be in writing (which
may be by fax) to be effective and is deemed given (a) in respect of
Borrowing Requests, Conversion Notices, requests for Swing Borrowings,
Competitive-Bid Requests, and Competitive Bids, only when actually received
by Administrative Agent or Swing Lender, as the case may be, or (b) otherwise
(i) if by fax, when transmitted to the appropriate fax number (which, without
affecting the date when deemed given, must be promptly confirmed by
telephone), (ii) if by mail, on the third
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Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, and deposited in the appropriate official postal service, or
(iii) if by any other means, when actually delivered. Until changed by
notice under this agreement, the address, fax number, and telephone number
for Borrower and Administrative Agent are stated beside their respective
signatures to this agreement and for each Lender are stated beside its name
on Schedule 2.
14.3 Form and Number. The form, substance, and number of
counterparts of each writing to be furnished under this agreement must be
satisfactory to Administrative Agent and its special counsel.
14.4 Exceptions. An exception to any Credit Document covenant or
agreement does not permit violation of any other Credit Document covenant or
agreement.
14.5 Survival. All Credit Document provisions survive all closings
and are not affected by any investigation by any party.
14.6 Governing Law. Unless otherwise specified, each Credit Document
must be construed, and its performance enforced, under the Legal Requirements
of the State of Texas and the United States of America.
14.7 Invalid Provisions. If any provision of a Credit Document is
judicially determined to be unenforceable, then all other provisions of it
remain enforceable. If the provision determined to be unenforceable is a
material part of that Credit Document, then, to the extent lawful, it shall
be replaced by a judicially-construed provision that is enforceable but
otherwise as similar in substance and content to the original provision as
the context of it reasonably allows.
14.8 Amendments, Supplements, Waivers, Consents, and Conflicts.
(a) All Lenders. Any amendment or supplement to, or waiver or
consent under, any Credit Document that purports to accomplish any of
the following must be by a writing executed by Borrower and executed (or
approved in writing, as the case may be) by all Lenders: (i) Extends the
due date for, decreases the amount or rate of calculation of, or waives
the late or non-payment of, any scheduled payment or mandatory
prepayment of principal or interest of any of the Obligation or any fees
payable ratably to Lenders under the Credit Documents, except, in each
case, any adjustments or reductions that are contemplated by any Credit
Document; (ii) changes the definition of "Commitment," "Commitment
Percentage," "Default Percentage," or "Required Lenders"; (iii)
increases any part of any Lender's Commitment; (iv) waives the
requirement that a Guaranty be executed and delivered in substantially
the form required or waives compliance with, materially amends, or fully
or partially releases any Guaranty, except, in each case, as expressly
provided by any Credit Document or as a result of a merger,
consolidation, or dissolution expressly permitted in the Credit
Documents; or (v) changes this clause (a) or any other matter
specifically requiring the consent of all Lenders under any Credit
Document.
(b) Administrative Agent or Swing Lender. Any amendment or
supplement to, or waiver or consent under, any Credit Document that
purports to accomplish any of the following must be by a writing
executed by Borrower and executed (or approved in writing, as the case
may be) by Administrative Agent or Swing Lender, as the case may be:
(i) Extends the due date for, decreases the amount or rate of
calculation of, or waives the late or non-payment of, any fees payable
to that Administrative Agent or Swing Lender under any Credit Document,
except, in each case, any adjustments or reductions that are
contemplated by any Credit Document; (ii) increases Administrative
Agent's or Swing Lender's, as the case may be, obligations beyond its
commitments under any Credit Document; or (iii) changes this clause (b)
or any other matter specifically requiring the consent of Administrative
Agent or Swing Lender, as the case may be, under any Credit Document.
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(c) Required Lenders. Except as specified above (i) the
provisions of this agreement may be amended and supplemented, and
waivers and consents under it may be given, in writing executed by
Borrower and Required Lenders and otherwise supplemented only by
documents delivered in accordance with the express terms of this
agreement, and (ii) each other Credit Document may only be amended and
supplemented, and waivers and consents under it may be given, in a
writing executed by the parties to that Credit Document that is also
executed or approved by Required Lenders and otherwise supplemented only
by documents delivered in accordance with the express terms of that
other Credit Document.
(d) Waivers. No course of dealing or any failure or delay by
Administrative Agent, any Lender, or any of their respective
Representatives with respect to exercising any Right of Administrative
Agent or any Lender under any Credit Document operates as a waiver of
that Right. A waiver must be in writing and signed by the parties
otherwise required by this Section 14.8 to be effective and will be
effective only in the specific instance and for the specific purpose for
which it is given.
(e) Conflicts. Although this agreement and other Credit
Documents may contain additional and different terms and provisions, any
conflict or ambiguity between the express terms and provisions of this
agreement and express terms and provisions in any other Credit Document
is controlled by the express terms and provisions of this agreement.
14.9 Counterparts. Any Credit Document may be executed in a number
of identical counterparts (including, at Administrative Agent's discretion,
counterparts or signature pages executed and transmitted by fax) with the
same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same
instrument. Certain parties to this agreement may execute multiple signature
pages to this agreement as well as one or more complete counterparts of it,
and Borrower and Administrative Agent are authorized to execute, where
applicable, those separate signature pages and insert them, along with
signature pages of other parties to this agreement, into one or more complete
counterparts of this agreement that contain signatures of all parties to it.
14.10 Parties.
(a) Parties and Beneficiaries. Each Credit Document binds and
inures to the parties to it and each of their respective successors and
permitted assigns. Only those Persons may rely upon or raise any
defense to this agreement. No Company may assign or transfer any Rights
or obligations under any Credit Document without first obtaining all
Lenders' consent, and any purported assignment or transfer without all
Lenders' consent is void. No Lender may transfer, pledge, assign, sell
any participation in, or otherwise encumber its portion of the
Obligation except as permitted by clauses (c) or (d) below, neither of
which provisions permit any Lender to transfer, pledge, assign, sell any
participation in, or otherwise encumber any of its portion of the
Obligation for consideration that, directly or indirectly, reflects a
discount from face value (i.e., full principal amount involved plus
accrued and unpaid interest and fees related to it) without first having
offered that transfer, pledge, assignment, participation, or encumbrance
to all other Lenders ratably according to their Commitment Percentages
or Default Percentages, as the case may be.
(b) Relationship of Parties. The relationship between each
Lender and each applicable Company is that of creditor/secured party and
obligor, respectively. Financial covenant and reporting provisions in
the Credit Documents are intended solely for the benefit of each Lender
to protect its interest as a creditor/secured party. Nothing in the
Credit Documents may be construed as (i) permitting or obligating any
Lender to act as a financial or business advisor or consultant to any
Company, (ii) permitting or obligating any Lender to control any Company
or conduct its operations, (iii) creating any fiduciary obligation of
any Lender to any Company, or (iv) creating any joint venture, agency,
or other relationship between the parties except as expressly specified
in the Credit Documents.
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(c) Participations. Any Lender may (subject to the provisions
of this section, in accordance with applicable Legal Requirement, in the
ordinary course of its business, and at any time) sell to one or more
Persons (each a "Participant") participating interests in its portion of
the Obligation. The selling Lender remains a "Lender" under the Credit
Documents, the Participant does not become a "Lender" under the Credit
Documents, and the selling Lender's obligations under the Credit
Documents remain unchanged. The selling Lender remains solely
responsible for the performance of its obligations and remains the
holder of its share of the Principal Debt for all purposes under the
Credit Documents. Borrower and Administrative Agent shall continue to
deal solely and directly with the selling Lender in connection with that
Lender's Rights and obligations under the Credit Documents, and each
Lender must retain the sole right and responsibility to enforce due
obligations of the Companies. Participants have no Rights under the
Credit Documents except as provided below. Subject to the following,
each Lender may obtain (on behalf of its Participants) the benefits of
Section 3 with respect to all participations in its part of the
Obligation outstanding from time to time so long as Borrower is not
obligated to pay any amount in excess of the amount that would be due to
that Lender under Section 3 calculated as though no participations have
been made. No Lender may sell any participating interest under which
the Participant has any Rights to approve any amendment, modification,
or waiver of any Credit Document except as to matters in Section
14.8(a)(i).
(d) Assignments. Each Lender may make assignments to the
Federal Reserve Bank. Each Lender may also assign to one or more
assignees (each an "Assignee") all or any part of its Rights and
obligations under the Credit Documents so long as (i) the assignor
Lender and Assignee execute and deliver to Administrative Agent and
Borrower for their consent and acceptance (that may not be unreasonably
withheld in any instance, is not required if the Assignee is an
Affiliate of the assigning Lender, and is not required by Borrower if an
Event of Default exists) an assignment and assumption agreement in
substantially the form of Exhibit F (an "Assignment") and pay to
Administrative Agent a processing fee of $3,500, (ii) the assignment
must be for a minimum total Commitment of $10,000,000 and, if the
assigning Lender retains any Commitment, it must be a minimum total
Commitment of $10,000,000, (iii) the assignment may not cover any
Competitive-Bid Borrowings; and (iv) the conditions for that assignment
set forth in the applicable Assignment are satisfied. The Effective
Date in each Assignment must (unless a shorter period is agreeable to
Borrower and Administrative Agent) be at least five Business Days after
it is executed and delivered by the assignor Lender and the Assignee to
Administrative Agent and Borrower for acceptance. Once that Assignment
is accepted by Administrative Agent and Borrower, and subject to all of
the following occurring, then, on and after the Effective Date stated in
it (i) the Assignee automatically becomes a party to this agreement and,
to the extent provided in that Assignment, has the Rights and
obligations of a Lender under the Credit Documents, (ii) the assignor
Lender, to the extent provided in that Assignment, is released from its
obligations to fund Borrowings under this agreement and its
reimbursement obligations under this agreement and, in the case of an
Assignment covering all of the remaining portion of the assignor
Lender's Rights and obligations under the Credit Documents, that Lender
ceases to be a party to the Credit Documents, (iii) Borrower shall
execute and deliver to the assignor Lender and the Assignee the
appropriate Notes in accordance with this agreement following the
transfer, (iv) upon delivery of the Notes under clause (iii) preceding,
the assignor Lender shall return to Borrower all Notes previously
delivered to that Lender under this agreement, and (v) Schedule 2 is
automatically deemed to be amended to reflect the name, address,
telecopy number, and Commitment of the Assignee and the remaining
Commitment (if any) of the assignor Lender, and Administrative Agent
shall prepare and circulate to Borrower and Lenders an amended Schedule
2 reflecting those changes. Notwithstanding the foregoing, no Assignee
may be recognized as a party to the Credit Documents (and the assigning
Lender shall continue to be treated for all purposes as the party to the
Credit Documents) with respect to the Rights and obligations assigned to
that Assignee until the actions described in clauses (iii) and (iv) have
occurred. The Obligation is registered on the books of Borrower as to
both principal and any stated interest, and transfers of (as opposed to
participations in) principal and interest of the Obligation may only be
made in accordance with this section.
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14.11 Venue, Service of Process, and Jury Trial. BORROWER AND
(PURSUANT TO ITS GUARANTY) EACH OTHER COMPANY, IN EACH CASE FOR ITSELF AND
ITS SUCCESSORS AND ASSIGNS, IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS IN TEXAS, (B) WAIVES, TO THE
FULLEST EXTENT LAWFUL, ANY OBJECTION THAT IT MAY NOW OR IN THE FUTURE HAVE TO
THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH
ANY CREDIT DOCUMENT AND THE OBLIGATION BROUGHT IN THE DISTRICT COURTS OF
DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION, (C) WAIVES ANY CLAIMS THAT ANY LITIGATION
BROUGHT IN ANY OF THE FOREGOING COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, (D) CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN
ANY LITIGATION BY THE MAILING OF COPIES OF THAT PROCESS BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND DELIVERY, OR BY DELIVERY
BY A NATIONALLY-RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED
COMPLETE UPON DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS FOR PURPOSES OF
THIS AGREEMENT, (E) AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY
CREDIT DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE CREDIT DOCUMENTS OR
THE OBLIGATION MAY BE BROUGHT IN ONE OF THE FOREGOING COURTS, AND (F) WAIVES
TO THE FULLEST EXTENT PERMITTED BY GOVERNMENTAL REQUIREMENT, ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF ANY CREDIT DOCUMENT. The scope of each of the foregoing waivers is
intended to be all encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. BORROWER AND
(PURSUANT TO ITS GUARANTY) EACH OTHER COMPANY ACKNOWLEDGES THAT THESE WAIVERS
ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT'S AND EACH LENDER'S
AGREEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT ADMINISTRATIVE AGENT
AND EACH LENDER HAS ALREADY RELIED ON THESE WAIVERS IN ENTERING INTO THIS
AGREEMENT, AND THAT ADMINISTRATIVE AGENT AND EACH LENDER WILL CONTINUE TO
RELY ON EACH OF THESE WAIVERS IN RELATED FUTURE DEALINGS. BORROWER AND
(PURSUANT TO ITS GUARANTY) EACH OTHER RESTRICTED COMPANY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THESE WAIVERS WITH ITS LEGAL COUNSEL, AND
THAT IT KNOWINGLY AND VOLUNTARILY AGREES TO EACH WAIVER FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. The waivers in this section are
irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions,
amendments, modifications, or replacements in respect of the applicable
Credit Document. In connection with any Litigation, this agreement may be
filed as a written consent to a trial by the court.
14.12 Entirety. THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN BORROWER, LENDERS, AND ADMINISTRATIVE AGENT WITH RESPECT TO THEIR
SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Remainder of page intentionally blank.
Signature pages follow.
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EXECUTED as of the date first stated in this Credit Agreement.
Xxxxxxx X. Xxxx PIER 1 IMPORTS, INC., as Borrower
Treasurer
Pier 1 Imports, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000 By /s/ Xxxxxxx X. Xxxxxx
Xxxx Xxxxx, XX 00000 -----------------------------------
Phone: 000-000-0000 Xxxxxxx X. Xxxxxx, Senior Vice
Fax: 000-000-0000 President and Chief Financial
Officer
Xxxx Xxxxxxx NATIONSBANK, N.A., as Administrative
Senior Vice President Agent and a Lender
NationsBank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 By /s/ Xxxx Xxxxxxx
Phone: 000-000-0000 -----------------------------------
Fax: 000-000-0000 Xxxx Xxxxxxx, Senior Vice President
BANK ONE, TEXAS, N.A., as a XXXXX FARGO BANK (TEXAS), NATIONAL
Co-Agent and a Lender ASSOCIATION, as a Co-Agent and a
Lender
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- --------------------------------------
Xxxxx X. Xxxxxxxx, Vice President Xxxxx X. Xxxxxxxxx, Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., CHASE BANK OF TEXAS, NATIONAL
as a Lender ASSOCIATION, as a Lender
By /s/ Xxxx X. Xxxxxx By /s/ X. X. Xxxxxxxx
-------------------------- -----------------------------------
Xxxx X. Xxxxxx, Vice President X.X. Xxxxxxxx, Vice President
FLEET NATIONAL BANK, as a Lender CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxx Xxxxxxxxx
---------------------------- -----------------------------------
Xxxxxx Xxxxxxx, Vice President Xxxxxx Xxxxxxxxx, Senior Vice
President
Signature Page
SCHEDULE 1.1
FISCAL-MONTH ENDS
Fiscal Year - 99 Fiscal Year - 01 Fiscal Year - 03
---------------- ---------------- ----------------
April 4, 1998 April 1, 2000 April 6, 2002
May 2, 1998 April 29, 2000 May 4, 2002
May 30, 1998* May 27, 2000* June 1, 2002*
July 4, 1998 July 1, 2000 July 6, 2002
August 1, 1998 July 29, 2000 August 3, 2002
August 29, 1998* August 26, 2000* August 31, 2002*
October 3, 1998 September 30, 2000 October 5, 2002
October 31, 1998 October 28, 2000 November 2, 2002
November 28, 1998* November 25, 2000* November 30, 2002*
January 2, 1999 December 30, 2000 January 4, 2003
January 30, 1999 January 27, 2001 February 1, 2003
February 27, 1999* March 3, 2001* March 1, 2003*
Fiscal Year - 00 Fiscal Year - 02
---------------- ----------------
April 3, 1999 April 7, 2001
May 1, 1999 May 5, 2001
May 29, 1999* June 2, 2001*
July 3, 1999 July 7, 2001
July 31, 1999 August 4, 2001
August 28, 1999* September 1, 2001*
October 2, 1999 October 6, 2001
October 30, 1999 November 3, 2001
November 27, 1999* December 1, 2001*
January 1, 2000 January 5, 2002
January 29, 2000 February 2, 2002
February 26, 2000* March 2, 2002*
---------------------
*Fiscal-quarter ends.
SCHEDULE 2
LENDERS AND COMMITMENTS
Commitment
Lender Commitment Percentage
--------------------------------- ---------- ----------
NationsBank, N.A. $25,000,000 20%
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Senior Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
-----------------------------------------------------------------------------
Bank One, Texas, N.A. 22,500,000 18%
000 Xxxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Vice President
Phone: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------
Xxxxx Fargo Bank (Texas) National 22,500,000 18%
Association
Commercial Banking Group
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Vice President
Phone: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd. 15,000,000 12%
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Vice President
Phone: 000-000-0000x000
Fax: 000-000-0000
-----------------------------------------------------------------------------
Chase Bank of Texas, National 15,000,000 12%
Association
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attn: X.X. Xxxxxxxx
Vice President
Phone: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------
Fleet National Bank 15,000,000 12%
MADFDO71
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Vice President
Phone: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------
Credit Lyonnais New York Branch 10,000,000 8%
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Vice President
Phone: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------
Total Commitments $125,000,00 100%
=============================================================================
SCHEDULE 6
CLOSING DOCUMENTS
Unless otherwise specified, all dated either
November 12, 1998 (which is the Closing Date)
or a date no earlier than 30 days before
the Closing Date (a "Current Date").
H&B [1.] CREDIT AGREEMENT (the "Credit Agreement") dated as of
November 12, 1998, between PIER 1 IMPORTS, INC., a Delaware
corporation ("Borrower"), certain Lenders, NATIONSBANK,
N.A., as Administrative Agent (the defined terms in which
have the same meanings when used in this schedule),
accompanied by:
Schedule 1.1 - Fiscal-Month Ends
Schedule 2 - Lenders and Commitments
Schedule 6 - Closing Documents
Schedule 7.2 - Companies
Schedule 9.3 - Existing Liens
Exhibit A-1 - Ratable Note
Exhibit A-2 - Swing Note
Exhibit A-3 - Master Competitive-Bid Note
Exhibit B - Guaranty
Exhibit C-1 - Borrowing Request
Exhibit C-2 - Conversion Notice
Exhibit C-3 - Competitive-Bid Request
Exhibit C-4 - Notice of Competitive-Bid Request
Exhibit C-5 - Competitive Bid
Exhibit D - Compliance Certificate
Exhibit E - Opinion of Counsel to Companies
Exhibit F - Assignment and Assumption Agreement
H&B [2.] RATABLE NOTES dated the Closing Date, executed by Borrower,
substantially in the form of Exhibit A-1 to the Credit
Agreement, one payable to each Lender in the stated
principal amount beside its name below:
Lender Amount
==========================================================
NationsBank, N.A. $25,000,000
Bank One, Texas, N.A. 22,500,000
Xxxxx Fargo Bank (Texas) National Association 22,500,000
The Bank of Tokyo-Mitsubishi, Ltd. 15,000,000
Chase Bank of Texas, National Association 15,000,000
Fleet National Bank 15,000,000
Credit Lyonnais New York Branch 10,000,000
==========================================================
Total $125,000,000
==========================================================
H&B [3.] SWING NOTE dated the Closing Date, executed by Borrower,
substantially in the form of Exhibit A-2 to the Credit
Agreement, payable to NationsBank, N.A., as Swing Lender, in
the stated principal amount of $10,000,000.
H&B [4.] MASTER COMPETITIVE-BID NOTES dated the Closing Date,
executed by Borrower, substantially in the form of Exhibit
A-3 to the Credit Agreement, one payable to each Lender: in
the stated principal amount beside its name below:
Lender Amount
==========================================================
NationsBank, N.A. $25,000,000
Bank One, Texas, N.A. 22,500,000
Xxxxx Fargo Bank (Texas) National Association 22,500,000
The Bank of Tokyo-Mitsubishi, Ltd. 15,000,000
Chase Bank of Texas, National Association 15,000,000
Fleet National Bank 15,000,000
Credit Lyonnais New York Branch 10,000,000
==========================================================
Total $125,000,000
==========================================================
H&B [5.] GUARANTY dated as of the Closing Date, in substantially the
form of Exhibit B to the Credit Agreement, and executed by
each of the following Restricted Companies ("Guarantors"):
Guarantor
============================
Pier 1 Assets, Inc.
Pier 1 Licensing, Inc.
Pier 1 Holdings, Inc.
Pier 1 Imports (U.S.), Inc.
Pier 1 Services Company
===========================
Pier 1 [6.] BORROWING REQUEST executed and delivered by Borrower for the
initial Ratable Borrowing dated either (a) two Business Days
before the Closing Date if it is a Eurodollar-Rate Borrowing
or (b) the Closing Date if it is a Base-Rate Borrowing.
Pier 1 [7.] COMPETITIVE-BID REQUEST executed and delivered by Borrower
for the initial Competitive-Bid Borrowings on the Closing
Date, if any, dated either (a) five Business Days before the
Closing Date if it is a Eurodollar-Rate Borrowing or (b) one
Business Day before the Closing Date if it is a Base-Rate
Borrowing.
H&B [8.] UP-FRONT FEE AGREEMENT dated as of the Closing Date,
executed by Borrower and Administrative Agent with respect
to the fee payable under Section 4.4 of the Credit
Agreement.
Pier 1 [9.] EVIDENCE satisfactory to Administrative Agent of the payment
of all fees under Section 4 of the Credit Agreement due on
or before the Closing Date.
Pier 1 [10.] EVIDENCE satisfactory to Administrative Agent that the
Refinanced Credit Agreement has been paid in full and
terminated and all other Debt to be repaid on the Closing
Date has been paid in full.
Borrower [11.] COMPLIANCE CERTIFICATE dated as of the Closing Date,
executed and delivered by Borrower.
12. CORPORATE CHARTER for Borrower certified as of October 26,
1998 by the Delaware Secretary of State.
KH&H [13.] OFFICER'S CERTIFICATE for Borrower dated as of the Closing
Date, executed by its Secretary as to resolutions of its
directors authorizing the Credit Documents and the
transactions contemplated therein, the incumbency and
signatures of its officers, its bylaws, and its corporate
charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Charter
14. CORPORATE CHARTER for Pier 1 Assets, Inc., certified as of
October 23, 1998, by the Delaware Secretary of State.
KH&H [15.] OFFICER'S CERTIFICATE for Pier 1 Assets, Inc., dated as of
the Closing Date, executed by its Secretary as to
resolutions of its directors authorizing the Credit
Documents and the transactions contemplated therein, the
incumbency and signatures of its officers, its bylaws, and
its corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Charter
16. CORPORATE CHARTER for Pier 1 Licensing, Inc., certified as
of October 26, 1998, by the Delaware Secretary of State.
KH&H [17.] OFFICER'S CERTIFICATE for Pier 1 Licensing, Inc., dated as
of the Closing Date, executed by its Secretary as to
resolutions of its directors authorizing the Credit
Documents and the transactions contemplated therein, the
incumbency and signatures of its officers, its bylaws, and
its corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Charter
18. CORPORATE CHARTER for Pier 1 Holdings, Inc., certified as of
October 23, 1998, by the Delaware Secretary of State.
KH&H [19.] OFFICER'S CERTIFICATE for Pier 1 Holdings, Inc., dated as of
the Closing Date, executed by its Secretary as to
resolutions of its directors authorizing the Credit
Documents and the transactions contemplated therein, the
incumbency and signatures of its officers, its bylaws, and
its corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Charter
20. CORPORATE CHARTER for Pier 1 Imports (U.S.), Inc., certified
as of October 26, 1998, by the Delaware Secretary of State.
KH&H [21.] OFFICER'S CERTIFICATE for Pier 1 Imports (U.S.), Inc., dated
as of the Closing Date, executed by its Secretary as to
resolutions of its directors authorizing the Credit
Documents and the transactions contemplated therein, the
incumbency and signatures of its officers, its bylaws, and
its corporate charter, accompanied by:
Annex A - Resolutions
Annex B - Bylaws
Annex C - Charter
KH&H [22.] CERTIFICATE OF TRUST for Pier 1 Services Company certified
as of a Current Date by the Delaware Secretary of State.
KH&H [23.] CERTIFICATE OF TRUSTEE for Pier 1 Services Company, dated as
of the Closing Date, executed by one of its Trustees as to
resolutions adopted by its Trustees authorizing the Credit
Documents and the transactions contemplated therein, the
incumbency and signatures of its Trustees, and its governing
instrument, accompanied by:
Annex A - Resolutions
Annex B - Governing Instrument
KH&H [24.] CERTIFICATES OF EXISTENCE, AUTHORITY, AND GOOD STANDING OR
SIMILAR STATUS for the following Companies and jurisdictions
as of the following dates:
Company Jurisdiction Date/Comments
Pier 1 Imports, Inc. Delaware 10/23/98
Texas 10/26/98 and 10/23/98
Pier 1 Assets, Inc. Delaware 10/23/98
Pier 1 Licensing, Inc. Delaware 10/23/98
Texas 10/26/98 and 10/23/98
Pier 1 Holdings, Inc. Delaware 10/23/89
Texas 10/26/98 and 10/23/98
Pier 1 Services Company Delaware KH&H
KH&H [25.] OPINION dated as of the Closing Date, of the law firm of
Xxxxx, Xxxx & Xxxxxxx, of Fort Worth, Texas, as counsel to
Borrower and Guarantors, addressed to Administrative Agent
and Lenders, covering the matters described Exhibit E to the
Credit Agreement, and otherwise in form and substance
satisfactory to Administrative Agent and its special
counsel.
26. Such other documents and items as Administrative Agent may
reasonably request.
------------------
[ ] indicate items not complete at the time this version of this
schedule was prepared, along with the initials of the party or
counsel responsible for them.
SCHEDULE 7.2
COMPANIES
Company Restricted Incorporated Qualified to Shareholder(s)
Company to do (100% Unless
Business Otherwise Noted)
as Foreign
corporation
Pier 1 Yes Delaware Texas Publicly held
Imports, Inc.
Xxxx 0 Xxxxxx, Xxx Xxxxxxxx Xxxx Xxxx 0 Imports, Inc.
Inc.
Pier 1 No (national [ ] Pier 1 Assets, Inc.
National Bank banking
association)
Pier 1 Yes Delaware Texas Pier 1 Assets, Inc.
Licensing,
Inc.
Pier 1 Yes Delaware Texas Pier 1 Licensing,
Holdings, Inc. Inc.
Xxxx 0 Xxx Xxxxxxxx Xxxx Xxxx 0 Holdings,
Services (business Inc.
Company trust)
Pier 1 Imports Yes Delaware Alabama, Pier 1 Licensing,
(U.S.), Inc. Arizona, Inc.
Arkansas,
California,
Colorado,
Connecticut,
Florida,
Georgia,
Idaho,
Illinois,
Indiana,
Iowa,
Kansas
Kentucky,
Louisiana,
Maryland,
Massachusetts,
Michigan,
Minnesota,
Mississippi,
Missouri,
Montana,
Nebraska,
Nevada,
New Hampshire,
New Jersey,
New Mexico,
New York,
North Carolina,
North Dakota,
Ohio,
Oklahoma,
Oregon,
Pennsylvania,
Rhode Island
South Carolina,
South Dakota,
Tennessee,
Texas,
Utah,
Virginia,
Washington,
West Virginia,
Wisconsin,
Wyoming
Pier 1 No Delaware [ ] Pier 1 Imports
Funding, Inc. (U.S.), Inc.
Pier Lease, No Delaware [ ] Pier 1 Imports
Inc. (U.S.), Inc.
Pier-SNG, Inc. No Delaware [ ] Pier 1 Imports
(U.S.), Inc.
PIR Trading, No Delaware [ ] Pier 1 Imports
Inc. (U.S.), Inc.
Pier No Hong Kong [ ] PIR Trading, Inc.
International
Limited
Pier Alliance No Bermuda [ ] Pier International
Ltd. Limited
The Pier No United [ ] PIR Trading,
Retail Group Kingdom Inc.(90%)
Limited Xxxxxx Xxxxxxxx(10%)
The Pier No United [ ] The Pier Retail
(Retail) Kingdom Group Limited
Limited
Pier Direct No United [ ] The Pier (Retail)
Limited Limited
Pier-FTW, No Delaware [ ] Pier 1 Imports
Inc. (U.S.), Inc.
Pacific No Texas [ ] Pier 1 Imports
Industrial (U.S.), Inc.
Properties,
Inc.
Pier Group, No Delaware [ ] Pier 1 Imports
Inc. (U.S.), Inc.
SCHEDULE 9.3
EXISTING LIENS
Fixed and floating charges on all or substantially all of the present and
future assets of The Pier (Retail) Limited.
EXHIBIT A-1
RATABLE NOTE
$[ ] November 12, 1998
FOR VALUE RECEIVED, PIER 1 IMPORTS, INC., a Delaware corporation
("Maker"), promises to pay to the order of [ ]
("Payee"), that portion of the principal amount of $[ ] that may
from time to time be disbursed and outstanding under this note, together with
interest.
This note is a "Ratable Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of November
12, 1998, between Maker, Payee, certain other Lenders, and NationsBank, N.A.,
as Administrative Agent for Lenders. All of the terms defined in the Credit
Agreement have the same meanings when used, unless otherwise defined, in this
note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation,
the final maturity date for this note, which is the Actual-Termination Date.
Principal and interest are payable to the holder of this note through
Administrative Agent at its offices or at any other address of which
Administrative Agent may notify Maker in writing.
This note also incorporates by reference all other provisions in the
Credit Agreement applicable to this note such as provisions for disbursement
of principal, applicable interest rates before and after an Event of Default,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorney's fees, courts costs, and other costs of
collection, certain waivers by Maker and other obligors, assurances and
security, choice of Texas and United States federal law, usury savings, and
other matters applicable to Credit Document under the Credit Agreement.
PIER 1 IMPORTS, INC., as Maker
By [ ]
Xxxxxxx X. Xxxxxx, Vice President and
Chief Financial Officer
EXHIBIT A-2
SWING NOTE
$10,000,000 November 12, 1998
FOR VALUE RECEIVED, PIER 1 IMPORTS, INC., a Delaware corporation
("Maker"), promises to pay to the order of NATIONSBANK, N.A. ("Payee"), that
portion of the principal amount of $10,000,000 that may from time to time be
disbursed and outstanding under this note, together with interest.
This note is the "Swing Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of November
12, 1998, between Maker, certain Lenders, and Payee, as Administrative Agent
for Lenders. All of the terms defined in the Credit Agreement have the same
meanings when used, unless otherwise defined, in this note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation,
the final maturity date for this note, which is the Actual-Termination Date.
Principal and interest are payable to Payee at its offices, or at any other
address of which Payee may notify Maker in writing.
This note also incorporates by reference all other provisions in the
Credit Agreement applicable to this note, such as provisions for disbursement
of principal, applicable interest rates before and after an Event of Default,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorney's fees, courts costs, and other costs of
collection, certain waivers by Maker and other obligors, assurances and
security, choice of Texas and United States federal law, usury savings, and
other matters applicable to Credit Document under the Credit Agreement.
PIER 1 IMPORTS, INC., as Maker
By [ ]
Xxxxxxx X. Xxxxxx, Vice President and
Chief Financial Officer
EXHIBIT A-3
MASTER-COMPETITIVE-BID NOTE
$[ ] November 12, 1998
FOR VALUE RECEIVED, PIER 1 IMPORTS, INC., a Delaware corporation
("Maker"), promises to pay to the order of [ ]
("Payee"):
(1) on the last day of the Interest Period for any Competitive-Bid
Borrowing disbursed by Payee to Borrower under the Credit Agreement,
which Interest Period ends before the Actual-Termination Date, the
aggregate principal amount of that Competitive-Bid Borrowing outstanding
and unpaid on that last day of that Interest Period (together with
accrued and unpaid interest thereon); and
(2) on the Actual-Termination Date, the aggregate principal amount
of all Competitive-Bid Borrowings disbursed by Payee to Borrower under
and outstanding and unpaid on the Actual-Termination Date (together with
accrued and unpaid interest thereon).
This note is a "Competitive-Bid Note" under the Credit Agreement (as
renewed, extended, amended, or restated, the "Credit Agreement") dated as of
November 12, 1998, between Maker, Payee, certain other Lenders, and
NationsBank, N.A., as Administrative Agent for Lenders. All of the terms
defined in the Credit Agreement have the same meanings when used, unless
otherwise defined, in this note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note. Principal and interest are
payable to the holder of this note through Administrative Agent at its
offices or at any other address of which Administrative Agent may notify
Maker in writing.
This note also incorporates by reference all other provisions in the
Credit Agreement applicable to this note such as provisions for disbursement
of principal, applicable interest rates before and after an Event of Default,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorney's fees, courts costs, and other costs of
collection, certain waivers by Maker and other obligors, assurances and
security, choice of Texas and United States federal law, usury savings, and
other matters applicable to Credit Document under the Credit Agreement.
PIER 1 IMPORTS, INC., as Maker
By [ ]
Xxxxxxx X. Xxxxxx, Vice President and
Chief Financial Officer
EXHIBIT B
GUARANTY
THIS GUARANTY is executed as of [ ] by [ ],
a [ ] corporation ("Guarantor"), for the benefit of NATIONSBANK,
N.A. (in its capacity as Administrative Agent for the Lenders now or in the
future party to the Credit Agreement described below, "Administrative
Agent").
Pier 1 Imports, Inc., a Delaware corporation ("Borrower"),
Administrative Agent, and Lenders have executed the Credit Agreement (as
renewed, extended, amended, or restated, the "Credit Agreement") dated as of
November 12, 1998. Guarantor is a direct or indirect wholly owned subsidiary
of Borrower. The execution and delivery of this guaranty are requirements to
Administrative Agent's and Lenders' execution of the Credit Agreement and
other Credit Document (see Paragraph 1 below for definitions), are integral
to the transactions contemplated by the Credit Document, and are conditions
precedent to Lenders' obligations to make Credit Extensions under the Credit
Agreement.
ACCORDINGLY, for adequate and sufficient consideration, Guarantor
jointly and severally guarantees to Administrative Agent and Lenders the
prompt payment of the Guaranteed Obligation (defined below) at, and at all
times after, its maturity (by acceleration or otherwise) as follows:
1. Definitions. Terms defined in the Credit Agreement have the same
meanings when used (unless otherwise defined) in this guaranty. As used in
this guaranty:
"Administrative Agent" is defined in the preamble to this guaranty and
includes its successor appointed under Section 13.1 of the Credit Agreement
and acting as Administrative Agent for Lenders under the Credit Document.
"Borrower" is defined in the recitals to this guaranty and includes,
without limitation, Borrower, Borrower as a debtor-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for Borrower or for all or substantially all of Borrower's assets
under any Debtor Law.
"Credit Agreement" is defined in the recitals to this guaranty.
"Guaranteed Obligation" means the Obligation, as defined in the Credit
Agreement, and all present and future costs, attorneys' fees, and expenses
reasonably incurred by Administrative Agent or any Lender to enforce
Borrower's, Guarantor's, or any other obligor's payment of any of the
Obligation, including, without limitation, all present and future amounts
that would become due but for the operation of Paragraphs 502 or 506 or any
other provision of Title 11 of the United States Code and all present and
future accrued and unpaid interest (including, without limitation, all post-
petition interest if Borrower or Guarantor voluntarily or involuntarily
becomes subject to any Debtor Law).
"Guarantor" is defined in the preamble to this guaranty.
2. Guaranty. This is an absolute, irrevocable, and continuing
guaranty, and the circumstance that at any time or from time to time the
Guaranteed Obligation may be paid in full does not affect the obligation of
Guarantor with respect to the Guaranteed Obligation incurred after that
payment in full. This guaranty remains in effect until the Guaranteed
Obligation is fully paid and performed, and all commitments to extend
Borrowings under the Credit Agreement have terminated. Any holder or
assignee of the Guaranteed Obligation may enforce this guaranty. Guarantor
may not rescind or revoke its obligations with respect to the Guaranteed
Obligation. Notwithstanding any contrary provision in this guaranty,
however, Guarantor's maximum liability under this guaranty is limited, to the
extent, if any, required so that its liability is not subject to avoidance
under any Debtor Law.
3. Representations and Warranties. Guarantor represents and warrants
that (a) the value of the consideration received and to be received by it is
reasonably worth at least as much as its liability under this guaranty, (b)
its liability under this guaranty may reasonably be expected to directly or
indirectly benefit it, and (c) Guarantor, after giving effect to this
guaranty (i) Guarantor has assets, the aggregate fair market value of which
exceeds its liabilities, (ii) Guarantor has sufficient cash flow to enable it
to pay its debts as they mature, and (iii) Guarantor does not have
unreasonably small capital to conduct its business.
4. Cumulative Rights. If Guarantor becomes liable for any
indebtedness owing by Borrower to Administrative Agent or any Lender, other
than under this guaranty, that liability may not be in any manner impaired or
affected by this guaranty. The Rights of Administrative Agent or Lenders
under this guaranty are cumulative of any and all other Rights that
Administrative Agent or Lenders may ever have against Guarantor. The
exercise by Administrative Agent or Lenders of any Right under this guaranty
or otherwise does not preclude the concurrent or subsequent exercise of any
other Right.
5. Payment Upon Demand. If an Event of Default exists, Guarantor
shall, on demand and without further notice of dishonor and without any
notice having been given to Guarantor previous to that demand of either the
acceptance by Administrative Agent or Lenders of this guaranty or the
creation or incurrence of any Guaranteed Obligation, pay the amount of the
Guaranteed Obligation then due and payable to Administrative Agent and
Lenders. It is not necessary for Administrative Agent or Lenders, in order
to enforce that payment by Guarantor, first or contemporaneously to
accelerate payment of any of the Guaranteed Obligation, to institute suit or
exhaust remedies against Borrower or others liable on any Guaranteed
Obligation, or to enforce Rights against any collateral securing any
Guaranteed Obligation.
6. Subordination. All principal of and interest on all indebtedness,
liabilities, and obligations of Borrower to Guarantor (the "Subordinated
Debt"), whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, now or in the future
existing, due or to become due to Guarantor, or held or to be held by
Guarantor, whether created directly or acquired by assignment or otherwise,
and whether evidenced by written instrument or not, is expressly subordinated
to the full and final payment of the Guaranteed Obligation. Guarantor agrees
not to accept any payment of any Subordinated Debt from Borrower if an Event
of Default or Potential Default exists. If Guarantor receives any payment of
any Subordinated Debt in violation of these subordination provisions, then
Guarantor shall hold that payment in trust for Administrative Agent and
Lenders and promptly turn it over to Administrative Agent, in the form
received (with any necessary endorsements), to be applied to the Guaranteed
Obligation.
7. Subrogation and Contribution. Until no Lender is obligated to
extend Borrowings under the Credit Agreement and the Guaranteed Obligation
has been fully paid and performed (a) Guarantor may not assert, enforce, or
otherwise exercise any Right of subrogation to any of the Rights or Liens of
Administrative Agent or Lenders or any other beneficiary against Borrower or
any other obligor on the Guaranteed Obligation or any collateral or other
security or any Right of recourse, reimbursement, subrogation, contribution,
indemnification, or similar Right against Borrower or any other obligor on
any Guaranteed Obligation or any guarantor of it, (b) Guarantor defers all of
the foregoing Rights (whether they arise in equity, under contract, by
statute, under common law, or otherwise), and (c) Guarantor defers the
benefit of, and any Right to participate in, any collateral or other security
given to Administrative Agent or Lenders or any other beneficiary to secure
payment of any Guaranteed Obligation.
8. No Release. Guarantor's obligations under this guaranty are not
released, diminished, or impaired by the occurrence of any one or more of the
following events: (a) Any taking or accepting of any other security or
assurance for any Guaranteed Obligation; (b) any release, surrender,
exchange, subordination, impairment, or loss of any collateral securing any
Guaranteed Obligation; (c) any full or partial release of the liability of
any other obligor on the Obligation; (d) the modification of, or waiver of
compliance with, any terms of any other Credit Document; (e) any present or
future insolvency, bankruptcy, or lack of corporate or partnership power of
any other obligor at any time liable for any Guaranteed Obligation; (f) any
renewal, extension, or rearrangement of any Guaranteed Obligation or any
adjustment, indulgence, forbearance, or compromise that may be granted or
given by Administrative Agent or any Lender to any other obligor on any
Guaranteed Obligation; (g) any neglect, delay, omission, failure, or refusal
of Administrative Agent or any Lender to take or prosecute any action in
connection with any Guaranteed Obligation; (h) any failure of Administrative
Agent or any Lender to notify Guarantor of any renewal, extension, or
assignment of any Guaranteed Obligation, or the release of any security or of
any other action taken or refrained from being taken by Administrative Agent
or any Lender against Borrower, or any new agreement between Administrative
Agent, any Lender, and Borrower, it being understood that neither
Administrative Agent nor any Lender is required to give Guarantor any notice
of any kind under any circumstances whatsoever with respect to or in
connection with any Guaranteed Obligation, other than any notice specifically
required to be given to Guarantor by applicable Legal Requirements or
elsewhere in this guaranty; (i) the unenforceability of any Guaranteed
Obligation against any other obligor because it exceeds the amount permitted
by applicable Legal Requirements, the act of creating it is ultra xxxxx, the
officers creating it exceeded their authority or violated their fiduciary
duties in connection with it, or otherwise; or (j) any payment of any
Guaranteed Obligation to Administrative Agent or Lenders is held to
constitute a preference under any Debtor Law or for any other reason
Administrative Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this guaranty shall be
reinstated in an amount equal to that payment).
9. Waivers. Guarantor waives:
(a) All defenses to the enforcement of this guaranty (and Rights
which may be asserted as defenses to the enforcement of this guaranty)
including, but not limited to (i) any Right to revoke this guaranty with
respect to future indebtedness; (ii) any Right to require Administrative
Agent or Lenders to do any of the following before Guarantor is
obligated to pay any Guaranteed Obligation or before Administrative
Agent or Lenders may proceed against Guarantor; (A) xxx or exhaust
remedies against Borrower and other guarantors or obligors, (B) xxx on
an accrued right of action in respect of any Guaranteed Obligation or
bring any other action, exercise any other right, or exhaust all other
remedies, or (C) enforce rights against Borrower's assets or the
collateral pledged by Borrower to secure any Guaranteed Obligation;
(iii) any right relating to the timing, manner, or conduct of
Administrative Agent's or Lenders' enforcement of rights against
Borrower's assets or the collateral pledged by Borrower to secure any
Guaranteed Obligation; (iv) if Guarantor and Borrower (or a third party)
have each pledged assets to secure any Guaranteed Obligation, any right
to require Administrative Agent and Lenders to proceed first against the
other collateral before proceeding against collateral pledged by
Guarantor; (v) notice that this guaranty has been accepted by
Administrative Agent and Lenders and notice of any indebtedness to which
this guaranty may apply; (vi) any right of Guarantor to receive notice
from Administrative Agent or Lenders of changes which affect the
creditworthiness of Borrower; and (vii) presentation, presentment,
demand for payment, protest, notice of protest, notice of dishonor or
nonpayment of any indebtedness, notice of intent to accelerate, notice
of acceleration, notice of any suit or other action by Lender against
Borrower, Guarantor, or any other Person and any notice to any party
liable for the obligation which is the subject of the suit or action;
and
(b) Each of the foregoing rights or defenses regardless whether
they arise under (i) Section 34.01 et seq. of the Texas Business and
Commerce Code, as amended, (ii) Section 17.001 of the Texas Civil
Practice and Remedies Code, as amended, (iii) Rule 31 of the Texas Rules
of Civil Procedure, as amended, or (iv) common law, in equity, under
contract, by statute, or otherwise.
10. Credit Agreement Provisions. Guarantor acknowledges that certain
(a) representations and warranties in the Credit Agreement are applicable to
it and confirms that each such representation and warranty is true and
correct, (b) covenants, agreements, and other provisions in the Credit
Agreement (INCLUDING, WITHOUT LIMITATION, INDEMNIFICATION AND RELATED
PROVISIONS IN SECTION 8.17 OF THE CREDIT AGREEMENT) are applicable to it or
are imposed upon it and agrees to promptly and properly comply with or be
bound by each of them, and (c) IT IRREVOCABLY CONSENTS AND APPROVES TO THE
VENUE, SERVICE OF PROCESS, AND WAIVER OF JULY TRIAL PROVISIONS OF SECTION
14.11 OF THE CREDIT AGREEMENT.
11. Reliance and Duty to Remain Informed. Guarantor confirms that it
has executed and delivered this guaranty after reviewing the terms and
conditions of the Credit Document and all other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute
and deliver this guaranty. Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is
not executing and delivering this guaranty in reliance on any representation
or warranty by Administrative Agent or any Lender as to that
creditworthiness. Guarantor expressly assumes all responsibilities to remain
informed of the financial condition of Borrower and any circumstances
affecting Borrower's ability to perform under the Credit Document to which it
is a party or any collateral securing any Guaranteed Obligation.
12. No Reduction. The Guaranteed Obligation may not be reduced,
discharged, or released because or by reason of any existing or future
offset, claim, or defense (except for the defense of complete and final
payment of the Guaranteed Obligation) of Borrower or any other obligor
against Administrative Agent or Lenders or against payment of the Guaranteed
Obligation, whether that offset, claim, or defense arises in connection with
the Guaranteed Obligation or otherwise and whether it arises out of failure
of consideration, breach of warranty, fraud, bankruptcy, incapacity/infancy,
statute of limitations, lender liability, accord and satisfaction, usury,
forged signatures, mistake, impossibility, frustration of purpose,
unconscionability, or otherwise.
13. Credit Document. This guaranty is a Credit Document and is subject
to the applicable provisions of Sections 1 and 14 of the Credit Agreement,
all of which are incorporated into this guaranty by reference the same as if
set forth in this guaranty verbatim.
14. Communications. For purposes of Section 14.2 of the Credit
Agreement, Guarantor's address and fax number are set forth beside its
signature below.
15. Amendments, Etc. No amendment, waiver, or discharge to or under
this guaranty is valid unless it is in writing and is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with
the requirements of Section 14.8 of the Credit Agreement.
16. ENTIRETY. THIS GUARANTY AND ANY OTHER CREDIT DOCUMENT TO WHICH
GUARANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT BETWEEN GUARANTOR,
ADMINISTRATIVE AGENT, AND LENDERS WITH RESPECT TO THE SUBJECT MATTER OF THIS
GUARANTY AND ANY SUCH OTHER CREDIT DOCUMENT AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
17. Administrative Agent and Lenders. Administrative Agent is the
Administrative Agent for each Lender under the Credit Agreement. All Rights
granted to Administrative Agent under or in connection with this guaranty are
for each Lender's ratable benefit. Administrative Agent may, without the
joinder of any Lender, exercise any Rights in Administrative Agent's or
Lenders' favor under or in connection with this guaranty. Administrative
Agent's and each Lender's Rights and obligations vis-a-vis each other may be
subject to one or more separate agreements between those parties. However,
Guarantor is not required to inquire about any such agreement or is subject
to any terms of it unless Guarantor specifically joins it. Therefore,
neither Guarantor nor its successors or assigns is entitled to any benefits
or provisions of any such separate agreement or is entitled to rely upon or
raise as a defense any party's failure or refusal to comply with the
provisions of it.
18. Parties. This guaranty benefits Administrative Agent, Lenders, and
their respective successors and assigns and binds Guarantor and its
successors and assigns. Upon appointment of any successor Administrative
Agent under the Credit Agreement, all of the Rights of Administrative Agent
under this guaranty automatically vests in that new Administrative Agent as
successor Administrative Agent on behalf of Lenders without any further act,
deed, conveyance, or other formality other than that appointment. The Rights
of Administrative Agent and Lenders under this guaranty may be transferred
with any assignment of any Guaranteed Obligation. The Credit Agreement
contains provisions governing assignments of the Guaranteed Obligation and of
Rights and obligations under this guaranty.
Remainder of page intentionally blank.
Signature page follows.
EXECUTED as of the date first stated in this Subsidiary Guaranty.
[ ] [ ]
000 Xxxxxxxx Xxxxxx, Xxxxx 000 as Guarantor
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Treasurer
Phone: 000-000-0000 By [ ]
Fax: 000-000-0000 Xxxxxxx X. Xxxxxx, Senior Vice
President and Chief Financial
Officer
EXECUTED by Administrative Agent solely in acknowledgment of Paragraph
16 above.
NATIONSBANK, N.A., as Administrative Agent
By [ ]
Xxxx Xxxxxxx, Senior Vice President
Signature Page to Subsidiary Guaranty
EXHIBIT C-1
BORROWING REQUEST
TO: NationsBank, N.A., DATE:[ ], 19[ ]
as Administrative Agent
FROM: Pier 1 Imports, Inc.,
as Borrower
=============================================================================
This notice is delivered under Section 2.1(b) of the Credit Agreement
(as renewed, extended, and amended, the "Credit Agreement") dated as of
November 12, 1998, between Borrower, Administrative Agent, and certain
Lenders. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this request.
Borrower requests a Borrowing under Section 2.1 of the Credit Agreement
as follows:
Borrowing Date(1) [ ], 199[ ]
Amount of Borrowing(2) $[ ]
Type of Borrowing(3) [ ]
If Eurodollar-Rate Borrowing,
the Interest Period(4) [ ] months
Borrower certifies that on the date of this request and on the above
Borrowing Date (after giving effect to the requested Borrowing) (a) all of
the representations and warranties in the Credit Document are and will be
true and correct in all material respects (unless they speak to a specific
date or the facts on which they are based have been changed by transactions
contemplated or permitted by the Credit Agreement), (b) no Material-Adverse
Event, Event of Default, or Potential Default exists or will exist, and (c)
that the undersigned is a Responsible Officer of Borrower.
PIER 1 IMPORTS, INC., as Borrower
By [ ]
Name: [ ]
(5)Title: [ ]
--------------------
(1) Business Day of request for Base-Rate Borrowing or at least second
Business Day after request for Eurodollar-Rate Borrowing.
(2) Not less than $500,000 or a greater integral multiple of $100,000 if a
Base-Rate Borrowing, and not less than $1,000,000 or a greater integral
of $1,000,000 if a Eurodollar-Rate Borrowing.
(3) Eurodollar-Rate Borrowing or Base-Rate Borrowing.
(4) 1, 2, 3, or 6 months.
(5) Must be a Responsible Officer.
EXHIBIT C-2
NOTICE OF CONVERSION
TO: NationsBank, N.A., DATE: [ ], 19[ ]
as Administrative Agent
FROM: Pier 1 Imports, Inc.,
as Borrower
=============================================================================
This notice is delivered under Section 3.10 of the Credit Agreement (as
renewed, extended, amended, or restated, the "Credit Agreement") dated as of
November 12, 1998, between Borrower, Administrative Agent, and certain
Lenders. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this notice.
Borrower presently has a [ ](1) Borrowing
(the "Existing Borrowing") under the Credit Agreement in the amount of
$[ ], which, if a Eurodollar-Rate
Borrowing, has an Interest Period of [ ](2)
ending on [ ]. On [ ]
(the "Conversion Date"), Borrower shall partially pay, continue in full or
part as the same Type of Borrowing, or convert in full or part to another
Type of Borrowing and (if applicable) with the Interest Period(s) designated
below [check applicable boxes]:
o Amount to be paid, if any, $[ ].
o Balance to be in the following Types of Borrowings with (if
applicable) the following Interest Period(s):
==================================================
Type(1) Amount(3) Interest Period(2)
==================================================
[ $ ]
[ $ ]
[ $ ]
[ $ ]
==================================================
Borrower certifies that on the date of this notice and on the Conversion
Date (and after giving effect to the above actions) (a) all of the
representations and warranties in the Credit Document will be true and
correct in all material respects (unless they speak to a specific date or the
facts on which they are based have been changed by transactions contemplated
or expressly permitted by the Credit Agreement), (b) no Material Adverse
Event, Event of Default, or Potential Default exists or will exist, and (c)
that the undersigned is a Responsible Officer of Borrower.
PIER 1 IMPORTS, INC., as Borrower
By [ ]
Name:[ ]
(4)Title: [ ]
---------------------
(1) Base-Rate or Eurodollar-Rate.
(2) 1, 2, 3 or 6 months.
(3) Must be $500,000 or a greater integral multiple of $100,000 for a Base-
Rate Borrowing and $1,000,000 or a greater integral multiple of
$1,000,000 for a Eurodollar-Rate Borrowing.
(4) Must be a Responsible Officer.
EXHIBIT C-3
FORM OF COMPETITIVE-BID REQUEST
TO: NationsBank, N.A., DATE: [ ], 19[ ]
as Administrative Agent and
[ ]
FROM: Pier 1 Imports, Inc.,
as Borrower
=============================================================================
This notice is delivered under Section 2.3(b) of the Credit Agreement
(as renewed, extended, amended, or restated, the "Credit Agreement") dated as
of November 12, 1998, between Borrower, Administrative Agent, and certain
Lenders. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this notice.
Borrowing Date of Competitive Borrowing(1) [ ]
Principal amount of Competitive Borrowing(2) [ ]
Type of Borrowing(3) [ ]
Interest Period and the last day thereof(4) [ ]
Borrower hereby certifies that the following statements are true on the
date hereof, and will be true on the Borrowing Date specified herein after
giving effect to such Borrowing this Borrowing will not cause the total
Principal Debt to exceed the total Commitments.
Borrower certifies that on the above Borrowing Date (after giving effect
to this Borrowing) (a) all of the representations and warranties in the
Credit Document will be true and correct in all material respects (unless
they speak to a specific date or the facts on which they are based have been
changed by transactions contemplated or permitted by the Credit Agreement),
(b) no Material Adverse Event, Event of Default, or Potential Default will
exist, and (c) that the undersigned is a Responsible Officer of Borrower.
Very truly yours,
PIER 1 IMPORTS, INC.
By [ ]
Name: [ ]
(5)Title: [ ]
---------------------------
(1) Must be a Responsible Officer.
(2) Not less than $5,000,000 (and in integral multiples of $1,000,000
thereafter), and not greater than the lesser of (i) the unused and
available portion of the Total Commitments.
(3) Eurodollar Borrowing or Base Rate Borrowing.
(4) 1, 2, 3 or 6 months.
(5) Must be a Responsible Officer
EXHIBIT C-4
FORM OF NOTICE TO LENDERS OF COMPETITIVE-BID REQUEST
TO: [ ] DATE: [ ], 19[ ]
FROM: NationsBank, N.A.
as Administrative Agent
=============================================================================
This notice is delivered under Section 2.3(b) of the Credit Agreement
(as renewed, extended, amended, or restated, the "Credit Agreement") dated as
of November 12, 1998, between Borrower, Administrative Agent, and certain
Lenders. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this notice. Borrower delivered a
Competitive-Bid Request dated [ ], [ ],
pursuant to Section 2.3(b) of the Agreement, and in that connection you are
invited to submit a Competitive-Bid by [ (Date) / (Time) ].(1) Your
Competitive-Bid must comply with Section 2.3(c) of the Agreement and the
terms set forth below on which the Competitive-Bid Request was made:
Borrowing Date of Competitive-Bid Borrowing [ ]
Principal amount of Competitive-Bid Borrowing [ ]
Type of Borrowing [ ]
Interest Period and the last day thereof [ ]
Very truly yours,
NATIONSBANK, N.A., as
Administrative Agent
By [ ]
Name: [ ]
Title:[ ]
-------------------------
(1) The Competitive-Bid must be received by the Administrative Agent (i) in
the case of Eurodollar Borrowings, not later than 11:00 a.m., Dallas,
Texas time, four Business Days before the Borrowing Date of the proposed
Competitive-Bid Borrowing, and (ii) in the case of Base Rate Borrowings,
not later than 10:00 a.m., Dallas, Texas time, on the Borrowing Date of
the proposed Competitive-Bid Borrowing.
EXHIBIT C-5
FORM OF COMPETITIVE-BID
TO: NationsBank, N.A. DATE: [ ], 19[ ]
as Administrative Agent
FROM: [ ]
=============================================================================
This notice is delivered under Section 2.3(d) of the Credit Agreement
(as renewed, extended, amended, or restated, the "Credit Agreement") dated as
of November 12, 1998, between Borrower, Administrative Agent, and certain
Lenders. The undersigned hereby makes a Competitive-Bid pursuant to Section
2.3(c) of the Agreement in response to the Competitive-Bid Request made by
Borrower on [ ], [ ], and in that connection sets forth below
the terms on which such Competitive-Bid is made:
Principal amount(1) [ ]
Competitive-Bid Rate(2) [ ]
Interest Period and the last day thereof(3) [ ]
The undersigned hereby confirms that it is prepared to extend credit to
Borrower upon acceptance by Borrower of this bid in accordance with Section
2.3(e) of the Agreement.
Very truly yours,
(NAME OF LENDER)
By [ ]
Name: [ ]
Title: [ ]
---------------------
(1) Not less than $5,000,000 (and in integral multiples of $1,000,000
thereafter) and which may equal the entire principal amount of the
Competitive-Bid Borrowing requested by Borrower and which may exceed
such Lender's Commitment (subject to the limitations set forth in
Section 2.4(a) of the Agreement). Multiple bids will be accepted by
Administrative Agent.
(2) Eurodollar Rate plus [ ]% or minus [ ]%, in the case of
Eurodollar Borrowings; or [ ]%, in the case of Base-Rate Borrowings
(in such case, expressed in form of a decimal to no more than four
decimal places).
(3) The Interest Period must be the Interest Period specified in the
Competitive-Bid Request.
EXHIBIT D
COMPLIANCE CERTIFICATE
FOR THE FISCAL QUARTER/YEAR ENDED [ ] (the "Subject Period")
TO: NationsBank, N.A. DATE: [ ], 19[ ]
as Administrative Agent
FROM: Pier 1 Imports, Inc.
as Borrower
=============================================================================
This certificate is delivered under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of November
12, 1998, between Borrower, Administrative Agent, and certain Lenders, all
defined terms in which have the same meanings when used, unless otherwise
defined, in this certificate.
In my capacity as a Responsible Officer of (and on behalf of) Borrower,
I certify to Administrative Agent and Lenders on the date of this certificate
that (a) I am a Responsible Officer of Borrower, (b) Borrower's Financial
Statements attached to this certificate were prepared in accordance with GAAP
and present fairly the Companies' consolidated financial condition and
results of operations as of, and for the fiscal quarter or year, as the case
may be, ended on, the last day of the Subject Period, (c) a review of the
activities of the Companies during the Subject Period has been made under my
supervision with a view to determining whether, during the Subject Period,
the Companies performed and complied with all of their obligations under the
Credit Document, and, during the Subject Period, to my knowledge (i) the
Companies performed, and complied with all of their obligations under the
Credit Document (except for the deviations, if any, described on a schedule
to this certificate) in all material respects, and (ii) no Event of Default
(nor any Potential Default) has occurred which has not been cured or waived
(except the Events of Default or Potential Defaults, if any, described on the
schedule to this certificate), and (d) to my knowledge, the status of
compliance by the Companies with Sections 9.2, 9.4, 9.5, 10.1, 10.2, 10.3,
and 10.4 of the Credit Agreement are described in the schedule attached to
this certificate.
By [ ]
Name: [ ]
Title: [ ]
EXHIBIT E
OPINION OF COUNSEL TO COMPANIES
Matters to which Xxxxx Xxxx & Xxxxxxx is to opine as of the Closing Date on
behalf of Borrower and each Guarantor (the "Subject Companies"):
1. Each Subject Company is a corporation duly organized, validly
existing, and in good standing under the laws of its state of
incorporation as represented in Schedule 7.3 to the Credit Agreement,
and is duly qualified and in good standing as a foreign corporation
under the laws of each other state where the conduct of its business or
the ownership or leasing of its properties makes such qualification or
registration necessary for that Subject Company.
2. Each Subject Company possesses all requisite corporate power
and authority to conduct its business as it is now being conducted, to
own and operate its business as now owned and operated, and to enter
into and consummate each Credit Document to which it is a party.
3. The execution and delivery by each Subject Company of each
Credit Document to which it is a party and the performance by it of its
obligations thereunder (a) are within its corporate power, (b) have been
duly authorized by all necessary corporate action on the part of that
Subject Company, (c) require no action by or filing with any
Governmental Authority or other Person, (d) do not violate any provision
of its Constituent Documents, and (e) do not violate any provision of
any Legal Requirement applicable to it or any material agreement to
which it is a party.
4. Each Credit Document to which each Subject Company is a party
constitutes a legal and binding obligation of that Subject Company,
enforceable against that Subject Company in accordance with that Credit
Document's terms.
5. There is no Litigation pending or threatened against any
Subject Company.
6. No Subject Company is an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended, or subject to regulation
under the Public Utility Holding Company Act of 1935, as amended.
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT is entered into as of [ ],
between [ ] ("Assignor"), and
[ ] ("Assignee").
PIER 1 IMPORTS, INC., a Delaware corporation ("Borrower"), certain
lenders ("Lenders"), and NationsBank, N.A., a national banking association
(in its capacity as Administrative Agent for Lenders, "Administrative
Agent"), are party to the Credit Agreement (as renewed, extended, amended, or
restated, the "Credit Agreement") dated as of November 12, 1998, all of the
defined terms in which have the same meanings when used, unless otherwise
defined, in this agreement. This agreement is entered into as required by
Section 14.10(d) of the Credit Agreement and is not effective (unless
otherwise provided in that section) until consented to by Borrower and
Administrative Agent, which consents may not under the Credit Agreement be
unreasonably withheld.
ACCORDINGLY, for adequate and sufficient consideration, Assignor and
Assignee agree as follows:
10 Assignment. By this agreement, and effective as of [ ]
(which must be at least five Business Days after the execution and delivery
of this agreement to both Borrower and Administrative Agent for consent, the
"Effective Date"), Assignor sells and assigns to Assignee (without recourse
to Assignor) and Assignee purchases and assumes from Assignor a [ ]%
interest (the "Assigned Interest"), which, if not equal to 100%, must be a
percentage, when computed as an aggregate dollar amount, that is at least
$10,000,000, in and to all of Assignor's Rights and obligations under the
Credit Agreement as of the Effective Date, including, without limitation, the
Assigned Interest in (a) Assignor's Commitment as of the Effective Date, (b)
the Ratable Notes held by Assignor as of the Effective Date, (c) all
Principal Debt of Ratable Borrowings owed to Assignor on the Effective Date,
(d) all outstanding participations owned by Assignor under Section 2.2(c) of
the Credit Agreement on the Effective Date, (e) all interest accruing in
respect of the Assigned Interest after the Effective Date, (f) all commitment
fees accruing in respect of the Assigned Interest under Section 4.3 of the
Credit Agreement after the Effective Date, but not (g) any Competitive-Bid
Borrowings or interest thereon.
2. Assignor Provisions. Assignor (a) represents and warrants to
Assignee that as of the Effective Date (i) the following principal amounts
are owed to it without reduction for any assignments that have not yet become
effective:
=======================================================
Item Amount
=======================================================
Principal Debt of Ratable Borrowings $
Paragraph 2.2(c) participations $
========================================================
and (ii) Assignor is the legal and beneficial owner of the Assigned Interest,
which is free and clear of any adverse claim, and (b) makes no representation
or warranty to Assignee and assumes no responsibility to Assignee with
respect to (i) any statements, warranties, or representations made in or in
connection with any Credit Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of any Credit Document, or
(iii) the financial condition of any Company, or the performance or
observance by any Company of any of its obligations under any Credit
Document.
3. Assignee Provisions. Assignee (a) represents and warrants to
Assignor, Borrower, and Administrative Agent that Assignee is legally
authorized to enter into this agreement, (b) confirms that it has received a
copy of the Credit Agreement, copies of the Current Financials, and such
other documents and information as it deems appropriate to make its own
credit analysis and decision to enter into this agreement, (c) agrees with
Assignor, Borrower, and Administrative Agent that Assignee shall
(independently and without reliance upon Administrative Agent, Assignor, or
any other Lender and based on such documents and information as Assignee
deems appropriate at the time) continue to make its own credit decisions in
taking or not taking action under the Credit Document, (d) appoints and
authorizes Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers under the Credit Document as are
delegated to Administrative Agent by the terms of the Credit Document and all
other reasonably-incidental powers, and (e) agrees with Assignor, Borrower,
and Administrative Agent that Assignee shall perform and comply with all
provisions of the Credit Document applicable to Lenders in accordance with
their respective terms. If Assignee is not organized under the laws of the
United States of America or one of its states, it (i) represents and warrants
to Assignor, Administrative Agent, and Borrower that no Taxes are required to
be withheld by Assignor, Administrative Agent, or Borrower with respect to
any payments to be made to it in respect of the Obligation, and it has
furnished to Administrative Agent and Borrower two duly completed copies of
either U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any
other form acceptable to Administrative Agent that entitles Assignee to
exemption from U.S. federal withholding Tax on all interest payments under
the Credit Document, (ii) covenants to provide Administrative Agent and
Borrower a new Form 4224, Form 1001, Form W-8, or other form acceptable to
Administrative Agent upon the expiration or obsolescence of any previously
delivered form according to law, duly executed and completed by it, and to
comply from time to time with all laws with regard to the withholding Tax
exemption, and (iii) agrees with Administrative Agent and Borrower that, if
any of the foregoing is not true or the applicable forms are not provided,
then Administrative Agent and Borrower (without duplication) may deduct and
withhold from interest payments under the Credit Document any United States
federal-income Tax at the full rate applicable under the IRC.
4. Credit Agreement and Commitments. From and after the Effective
Date (a) Assignee shall be a party to the Credit Agreement and (to the extent
provided in this agreement) have the Rights and obligations of a Lender under
the Credit Document and (b) Assignor shall (to the extent provided in this
agreement) relinquish its Rights and be released from its obligations under
the Credit Document. On the Effective Date, after giving effect to this
agreement, but without giving effect to any other assignments that have not
yet become effective, Assignor's total Commitment (which, if positive, must
be at least $10,000,000) and Assignee's total Commitment will be as follows:
=============================
Lender Total
=============================
Assignor $
Assignee $
=============================
5. Ratable Notes. Assignor and Assignee request Borrower to issue new
Ratable Notes to Assignor and Assignee in the amounts of their respective
Commitments under Paragraph 4 above and otherwise issued in accordance with
the Credit Agreement. Upon delivery of those Ratable Notes, Assignor shall
return to Borrower all Ratable Notes previously delivered to Assignor under
the Credit Agreement.
6. Payments and Adjustments. From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees, and other amounts)
to Assignee. Assignor and Assignee shall make all appropriate adjustments in
payments for periods before the Effective Date by Administrative Agent or
with respect to the making of this assignment directly between themselves.
7. Conditions Precedent. Paragraphs 1 through 5 above are not
effective until (a) counterparts of this agreement are executed and delivered
by Assignor and Assignee to (and are executed in the spaces below by)
Borrower and Administrative Agent and (b) Administrative Agent receives from
Assignor a $3,500 processing fee.
8. Incorporated Provisions. Although this agreement is not a Credit
Document, the provisions of Sections 1 and 14 of the Credit Agreement
applicable to a Credit Document are incorporated into this instrument by
reference as if this agreement were a Credit Document and those provisions
were set forth in this agreement verbatim.
9. Communications. For purposes of Section 14.2 of the Credit
Agreement, Assignee's address, telephone number, and telecopy number (until
changed under that section) are beside its signature below.
10. Amendments, Etc. No amendment, waiver, or discharge to or under
this agreement is valid unless in a writing that is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with
the requirements of the Credit Agreement.
11. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
ASSIGNOR AND ASSIGNEE ABOUT ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF ASSIGNOR
AND ASSIGNEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN ASSIGNOR AND
ASSIGNEE.
12. Parties. This agreement binds and benefits Assignor, Assignee, and
their respective successors and assigns that are permitted under the Credit
Agreement.
Remainder of page intentionally blank.
Signature page follows.
EXECUTED as of the date first stated in this Assignment Agreement.
(ASSIGNOR) (ASSIGNEE)
By [ ] By [ ]
Name [ ] Name [ ]
Title[ ] Title[ ]
Address [ ]
[ ]
[ ]
Telephone No. [ ]
Telecopy No. [ ]
As of the Effective Date, Borrower and Administrative Agent consent to
this agreement and the transactions contemplated in it.
PIER 1 IMPORTS, INC., as NATIONSBANK, N.A., as Administrative
Borrower Agent
By [ ] By [ ]
Name [ ] Name [ ]
Title[ ] Title[ ]
