Exhibit 10.2
EXECUTION COPY
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$200,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 12, 2002
AMONG
BJ's WHOLESALE CLUB, INC.,
THE LENDERS,
BANK ONE, NA,
AS LC ISSUER, AS SWING LINE LENDER
AND AS AGENT
AND
FLEET NATIONAL BANK,
AS SYNDICATION AGENT
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BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS......................................... 1
ARTICLE II THE CREDITS......................................... 15
2.1 Commitment................................................. 15
2.2 Required Payments; Termination............................. 15
2.3 Ratable Loans.............................................. 15
2.4 Types of Advances.......................................... 16
2.5 Swing Line Loans........................................... 16
2.5.1 Amount of Swing Line Loans............................. 16
2.5.2 Borrowing Notice....................................... 16
2.5.3 Making of Swing Line Loans............................. 16
2.5.4 Repayment of Swing Line Loans.......................... 16
2.6 Facility Fee; Usage Fee; Reductions and Increases in
Aggregate Commitment...................................... 17
2.7 Minimum Amount of Each Advance............................. 19
2.8 Optional Principal Payments................................ 19
2.9 Method of Selecting Types and Interest Periods for New
Advances.................................................. 19
2.10 Conversion and Continuation of Outstanding Advances........ 19
2.11 Changes in Interest Rate, etc.............................. 20
2.12 Rates Applicable After Default............................. 20
2.13 Method of Payment.......................................... 21
2.14 Noteless Agreement; Evidence of Indebtedness............... 21
2.15 Telephonic Notices......................................... 22
2.16 Interest Payment Dates; Interest and Fee Basis............. 22
2.17 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions..................................... 23
2.18 Lending Installations...................................... 23
2.19 Non-Receipt of Funds by the Agent.......................... 23
2.20 Facility LCs............................................... 23
2.21 Replacement of Lender...................................... 28
ARTICLE III YIELD PROTECTION; TAXES............................. 29
3.1 Yield Protection........................................... 29
3.2 Changes in Capital Adequacy Regulations.................... 30
3.3 Availability of Types of Advances.......................... 30
3.4 Funding Indemnification.................................... 31
3.5 Taxes...................................................... 31
3.6 Lender Statements; Survival of Indemnity................... 33
ARTICLE IV CONDITIONS PRECEDENT................................ 33
4.1 Initial Credit Extension................................... 33
4.2 Each Credit Extension...................................... 34
ARTICLE V REPRESENTATIONS AND WARRANTIES...................... 35
5.1 Existence and Standing..................................... 35
5.2 Authorization and Validity................................. 35
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5.3 No Conflict; Government Consent.............................. 35
5.4 Financial Statements......................................... 36
5.5 Material Adverse Change Default.............................. 36
5.6 Taxes........................................................ 36
5.7 Litigation and Contingent Obligations........................ 36
5.8 Subsidiaries................................................. 37
5.9 ERISA........................................................ 37
5.10 Accuracy of Information...................................... 37
5.11 Regulation U................................................. 37
5.12 Material Agreements.......................................... 37
5.13 Compliance With Laws......................................... 37
5.14 Ownership of Properties...................................... 38
5.15 Plan Assets; Prohibited Transactions......................... 38
5.16 Environmental Matters........................................ 38
5.17 Investment Company Act....................................... 38
5.18 Public Utility Holding Company Act........................... 38
5.19 Insurance.................................................... 38
5.20 Solvency..................................................... 38
ARTICLE VI COVENANTS............................................. 38
6.1 Financial Reporting.......................................... 39
6.2 Use of Proceeds.............................................. 40
6.3 Notice of Default............................................ 40
6.4 Conduct of Business.......................................... 41
6.5 Taxes........................................................ 41
6.6 Insurance.................................................... 41
6.7 Compliance with Laws......................................... 41
6.8 Maintenance of Properties.................................... 41
6.9 Inspection................................................... 41
6.10 Dividends.................................................... 41
6.11 Indebtedness................................................. 42
6.12 Merger....................................................... 43
6.13 Sale of Assets............................................... 43
6.14 Investments and Acquisitions................................. 44
6.15 Liens........................................................ 46
6.16 Affiliates................................................... 47
6.17 Amendments................................................... 48
6.18 Rate Hedging Obligations..................................... 48
6.19 Financial Covenants.......................................... 48
6.20 Subsidiary Guaranties........................................ 48
6.21 Intercompany Indebtedness.................................... 49
6.22 Letters of Credit............................................ 49
ARTICLE VII DEFAULTS.............................................. 49
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES........ 51
8.1 Acceleration; Facility LC Collateral Account................. 51
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8.2 Amendments.................................................. 52
8.3 Preservation of Rights...................................... 53
ARTICLE IX GENERAL PROVISIONS................................... 53
9.1 Survival of Representations................................. 53
9.2 Governmental Regulation..................................... 54
9.3 Headings.................................................... 54
9.4 Entire Agreement............................................ 54
9.5 Several Obligations; Benefits of this Agreement............. 54
9.6 Expenses; Indemnification................................... 54
9.7 Numbers of Documents........................................ 55
9.8 Accounting.................................................. 55
9.9 Severability of Provisions.................................. 55
9.10 Nonliability of Lenders..................................... 55
9.11 Confidentiality............................................. 55
9.12 Nonreliance................................................. 56
9.13 Disclosure.................................................. 56
ARTICLE X THE AGENT............................................ 56
10.1 Appointment; Nature of Relationship......................... 56
10.2 Powers...................................................... 56
10.3 General Immunity............................................ 56
10.4 No Responsibility for Loans, Recitals, etc.................. 57
10.5 Action on Instructions of Lenders........................... 57
10.6 Employment of Agents and Counsel............................ 57
10.7 Reliance on Documents; Counsel.............................. 57
10.8 Agent's Reimbursement and Indemnification................... 57
10.9 Notice of Default........................................... 58
10.10 Rights as a Lender.......................................... 58
10.11 Lender Credit Decision...................................... 58
10.12 Successor Agent............................................. 59
10.13 Agent and Arranger Fees..................................... 59
10.14 Delegation to Affiliates.................................... 59
10.15 Co-Agents, Documentation Agent, Syndication Agent, etc...... 59
ARTICLE XI SETOFF; RATABLE PAYMENTS............................. 61
11.1 Setoff...................................................... 61
11.2 Ratable Payments............................................ 61
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.... 61
12.1 Successors and Assigns...................................... 61
12.2 Participations.............................................. 62
12.2.1 Permitted Participants; Effect.......................... 62
12.2.2 Voting Rights........................................... 62
12.2.3 Benefit of Setoff....................................... 62
12.3 Assignments................................................. 62
12.3.1 Permitted Assignments................................... 62
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12.3.2 Effect; Effective Date.................................. 63
12.4 Dissemination of Information............................... 63
12.5 Tax Treatment.............................................. 64
ARTICLE XIII NOTICES............................................. 64
13.1 Notices.................................................... 64
13.2 Change of Address.......................................... 64
ARTICLE XIV COUNTERPARTS........................................ 64
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.......................................... 64
15.1 CHOICE OF LAW.............................................. 64
15.2 CONSENT TO JURISDICTION.................................... 65
15.3 WAIVER OF JURY TRIAL....................................... 65
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EXHIBITS
Exhibit A Form of Compliance Certificate
Exhibit B Form of Assignment Agreement
Exhibit C Written Money Transfer Instructions
Exhibit D Form of Subsidiary Guaranty
SCHEDULES
Pricing Schedule
Schedule 1 Commitments
Schedule 2.20.13 Outstanding Letters of Credit
Schedule 5.8 Subsidiaries
Schedule 6.11 Indebtedness
Schedule 6.14 Investments
Schedule 6.15 Liens
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CREDIT AGREEMENT
This Agreement, dated as of June 12, 2002, is among BJ's Wholesale
Club, Inc., the Lenders and Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, as LC Issuer, as Swing Line Lender
and as Agent. The parties hereto agree as follows:
R E C I T A L S:
A. The Borrower has requested the Lenders to make financial
accommodations to it in the aggregate principal amount of $200,000,000 (as the
same may be increased in accordance with the terms hereof); and
B. The Lenders are willing to extend such financial accommodations on
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements made herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Active Subsidiary" means a Subsidiary that has total assets of at
least $500,000.
"Advance" means a borrowing hereunder, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period. The term "Advance" shall
include Swing Line Loans unless otherwise expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as adjusted from time to time pursuant to the terms hereof. The
initial Aggregate Commitment is $200,000,000.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4
hereof; provided, however, that for purposes of all computations required to be
made with respect to compliance by the Borrower with Section 6.19, such term
shall mean generally accepted accounting principles as in effect on the date
hereof, applied in a manner consistent with those used in preparing the
Financial Statements.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which, as applicable, (i) facility fees are accruing on the Aggregate
Commitment (without regard to usage), (ii) usage fees are accruing, or (iii) LC
Fees are accruing, in each case at such time as set forth in the Pricing
Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the Chairman, President, Chief
Financial Officer, Treasurer, Controller or any Vice President-Finance of the
Borrower, acting singly.
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"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means BJ's Wholesale Club, Inc., a Delaware corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Business Trust" means BJ's Northeast Business Trust, a Massachusetts
business trust and Wholly-Owned Subsidiary of the Borrower, and its successors
and assigns.
"Capital" means, as of any date of determination, the sum of Net Worth
plus Funded Debt.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of the Borrower or (ii) during any period of 12 consecutive months, a majority
of the members of the board of directors or other equivalent governing body of
the Borrower cease to be composed of individuals (a) who were members of that
board or equivalent governing body on the first day of such period, (b) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (a) above constituting at the time of such
election or nomination at least a majority of that board or
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equivalent governing body or (c) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (a) and (b) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1(i).
Commercial LC" means a Facility LC which is the payment mechanism for a
commercial trade transaction.
"Commitment" means, for each Lender, the obligation of such Lender to
make Revolving Loans to, and participate in Facility LCs issued upon the
application of, the Borrower in an aggregate amount not exceeding the amount set
forth opposite its name on Schedule 1 hereto, as it may be modified as a result
of any assignment that has become effective pursuant to Section 12.3.2 or as
otherwise modified from time to time pursuant to the terms hereof.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership (but
does not include (i) any application for a Letter of Credit or (ii) any
obligation of any Person to pay the purchase price of real estate, subject to
the satisfaction of customary conditions precedent, contracted for in the
ordinary course of business. The principal amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the related primary obligation, or portion thereof, covered by such Contingent
Obligation or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the Person in good faith.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC hereunder.
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"Current Maturities" means, as of any date of determination, the sum of
all amounts which were due and payable within 12 months prior to such date with
respect to any Indebtedness (excluding the H2H Obligations) with an original
term in excess of one year (it being understood that Indebtedness under this
Agreement shall not be included), all determined on a consolidated basis for the
Borrower and its Subsidiaries.
"Default" means an event described in Article VII.
"EBITR" means, for any period, Net Income before interest expense,
income taxes and Rentals, all determined on a consolidated basis for the
Borrower and its Subsidiaries.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period, and having a maturity equal
to such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, in the approximate amount of Bank One's
relevant Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
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"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Facility LC" is defined in Section 2.20.1.
"Facility LC Application" is defined in Section 2.20.3.
"Facility LC Collateral Account" is defined in Section 2.20.11.
"Facility Termination Date" means June 13, 2005 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Charge Coverage Ratio" means a ratio of (i) EBITR for such fiscal
quarter and the three immediately preceding fiscal quarters to (ii) the sum of
interest expense, Rentals and cash dividends for such fiscal quarter and the
three immediately preceding fiscal quarters plus Current Maturities as of the
end of such fiscal quarter, all determined on a consolidated basis for the
Borrower and its Subsidiaries.
"Floating Rate" means, for any day, a rate per annum equal to the Alternate
Base Rate for such day plus (ii) the Applicable Margin, in each case changing
when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.
"Funded Debt" means, as of any date of determination, for the Borrower and
its Subsidiaries on a consolidated basis, the sum of (i) the outstanding
principal amount of all
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Indebtedness plus (ii) the product of eight (8) times Rentals (for the twelve
(12) months most recently completed prior to the date of determination).
"Guarantor" means any Subsidiary which is from time to time a party to the
Subsidiary Guaranty. The initial Guarantors are Strathmore Holdings, Inc., the
Trademark Subsidiary, BJ's Atlantic Distribution Center, Inc., the Business
Trust, Natick Realty, Inc. and the Investment Subsidiary.
"H2H Obligations" means the indemnification by the Borrower of, and related
obligations arising out of or with respect to, any liabilities which the TJX
Companies, Inc. ("TJX") has incurred or may incur with respect to House2Home,
Inc. (f/k/a HomeBase, Inc.) as provided for in the Indemnification Agreement
dated April 18, 1997 between the Borrower and TJX, including any and all costs,
expenses and charges in connection therewith, and related allocation or other
agreements concerning such liabilities.
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
obligations of such Person to purchase securities or other Property arising out
of or in connection with the sale of the same or substantially similar
securities or Property, (vi) Capitalized Lease Obligations and (vii) any other
obligation for borrowed money or other financial accommodations (excluding trade
payables incurred in the ordinary course) which in accordance with Agreement
Accounting Principles would be shown as a liability on the consolidated balance
sheet of such Person, (viii) net liabilities under Rate Hedging Obligations or
in respect of any other derivative financial instrument, (ix) unreimbursed draws
under Letters of Credit, (x) Contingent Obligations and (xi) the H2H
Obligations.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
seven days or one, two, three or six months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period shall
end on the day which corresponds numerically to such date seven days or one,
two, three or six months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than advances to
officers and employees made in the ordinary course of business), extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade) or contribution of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or
other securities owned by such Person; any deposit accounts and certificate of
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deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts (valued at cost or, at
any time, net liability of such Person thereunder) owned by such Person.
"Investment Subsidiary" means Natick Security Corp., a Massachusetts
corporation and a Wholly-Owned Subsidiary of the Borrower, and its successors.
"LC Fee" is defined in Section 2.20.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder or
any other Lender which agrees with the Borrower to act as an issuer of Facility
LCs hereunder, in its capacity as such Issuer.
"LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.20.5.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes Bank One in its capacity as Swing Line
Lender.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to Section 2.18.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means a Revolving Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, the Facility LC Applications, any
Notes issued pursuant to Section 2.14 and the Subsidiary Guaranty.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the
8
Loan Documents to which it is a party, or (iii) the validity or enforceability
of any of the Loan Documents or the rights or remedies of the Agent, the LC
Issuer or the Lenders thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Modify" and "Modification" are defined in Section 2.20.1.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Income" means, for any period, the net income (or loss) of the
Borrower and its Subsidiaries on a consolidated basis for such period determined
in conformity with Agreement Accounting Principles; provided, however, that to
the extent reported as a separate item on the Borrower's financial statements
delivered pursuant to Section 6.1 hereof, there shall be excluded (i) the income
(or loss) of any Affiliate of the Borrower or other Person (other than a
Subsidiary of the Borrower) in which any Person (other than the Borrower or any
of its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower, or any of its
Subsidiaries by such Affiliate or other Person during such period and (ii) the
income (or loss) of any Person accrued prior to the date such Person becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries or that Person's assets are acquired by the Borrower
or any of its Subsidiaries.
"Net Worth" means the aggregate amount of shareholders equity as determined
from a consolidated balance sheet of the Borrower and its Subsidiaries, prepared
in accordance with Agreement Accounting Principles.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.14.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Borrower to
the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party
arising under the Loan Documents.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Revolving Loans outstanding at such
time, plus (ii) an amount
9
equal to its Pro Rata Share of the LC Obligations at such time, plus (iii) an
amount equal to its Pro Rata Share of the aggregate principal amount of Swing
Line Loans outstanding at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Investments" means Investments in any of the following:
(i) Short-term obligations of, or fully guaranteed by, the United
States of America;
(ii) Commercial paper rated A-2 or better by S&P or P-2 or better
by Moody's and securities commonly known as "short-term bank notes" issued
by any Lender denominated in United States dollars which at the time of
purchase have been rated and the ratings for which are not less than P-2 if
rated by Moody's, and not less than A-2 if rated by S&P;
(iii) Demand deposit accounts maintained in the ordinary course of
business;
(iv) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000;
(v) Tax-free government securities rated "A" or better as rated by
S&P or Moody's which have a weighted average life of less than two (2)
years;
(vi) Government securities mutual funds which invest primarily in
tax-free government securities rated "A" or better as rated by S&P or
Moody's which have a weighted average life of less than two (2) years;
(vii) Corporate debt securities rated "A" or better as rated by S&P
or Moody's that mature within two (2) years from the date the Investment is
made by the Borrower or any of its Subsidiaries;
(viii) Collateralized mortgage obligations rated "A" or better as
rated by S&P or Moody's with an average life less than two (2) years;
(ix) Money market preferred stock investments rated "A" or better
as rated by S&P or Moody's;
(x) Repurchase agreements relating to a security which is rated
"A" or better as rated by S&P or Moody's that mature within two (2) years
from the date the Investment is made by the Borrower or any of its
Subsidiaries;
10
(xi) Tax free government securities rated "SP2" or better by S&P or
"MIG2" or better by Moody's with an average life of less than two (2)
years; and
(xii) Money market mutual funds with an average maturity of not more
than 270 days which invest primarily in corporate or governmental debt
securities and which debt securities have a rating equal to or better than
the applicable rating for such securities set forth in clauses (ii), (vii),
(x) or (xi) above.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Prior Agreement" means the Credit Agreement dated as of July 9, 1997 among
the Borrower, Bank One (formerly known as The First National Bank of Chicago),
as agent, and the Lenders party thereto, as amended through the date hereof.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Agreements" of a Person means (i) any and all agreements,
devices or arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or
11
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under Rate Hedging Agreements.
"Real Estate Subsidiary" means any Wholly-Owned Subsidiary of the Borrower
existing on the date hereof or formed after the date hereof (i) for the purpose
of (a) purchasing, developing and/or carrying real estate or lending money to
the Borrower or any Wholly-Owned Subsidiary or (b) acting as a holding company
for Subsidiaries which purchase, develop and/or carry real estate, (ii) which
conducts no business other than that which is incidental to purchasing,
developing and/or carrying real estate or lending money to the Borrower or any
Wholly-Owned Subsidiary and (iii) which owns no significant assets other than
real estate, Subsidiaries which are Real Estate Subsidiaries or mortgages on
real estate owned by the Borrower or any Wholly-Owned Subsidiary.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the Aggregate Outstanding
Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
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"Revolving Loan" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1 (or any conversion
or continuation thereof).
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" means, when used with respect to a Person, that (i) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities (including loss reserves as determined by such Person), whether
or not reflected on a balance sheet prepared in accordance with Agreement
Accounting Principles and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (ii) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (iii) such
Person does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Standby LC" means a Facility LC which is not a Commercial Letter of
Credit.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty" means that certain Guaranty dated as of the date
hereof executed and delivered by the applicable Subsidiaries in favor of the
Agent, on behalf of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time, including any joinder agreements entered
into pursuant to Section 6.20 hereto.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the
13
month in which such determination is made, or (ii) is responsible for more than
10% of the consolidated net sales or of the consolidated Net Income (excluding
the effect of the H2H Obligations) of the Borrower and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
"Swing Line Borrowing Notice" is defined in Section 2.5.2.
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $15,000,000 at any one
time outstanding.
"Swing Line Lender" means Bank One or such other Lender which may succeed
to its rights and obligations as Swing Line Lender pursuant to the terms of this
Agreement.
"Swing Line Loan" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.5.
"Tangible Net Worth" means Net Worth minus Intangible Assets. For purposes
of this definition "Intangible Assets" means the amount (to the extent reflected
in determining Net Worth) of (i) all write-ups (other than write-ups resulting
from foreign currency translations or from increases in the value of Permitted
Investments owned by the Borrower or the Investment Subsidiary) subsequent to
February 2, 2002 in the book value of any asset owned by the Borrower or a
consolidated Subsidiary, (ii) all investments in unconsolidated Subsidiaries and
all equity investments in Persons which are not Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible items.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Trademark Subsidiary" means Strathmore Partners LP, a Delaware limited
partnership and Wholly-Owned Subsidiary of the Borrower, formed for the purpose
of (i) owning trademarks and/or other intellectual property and whose income is
primarily derived from royalties received from the Borrower and its Subsidiaries
for the use of such trademarks and/or other intellectual property and/or (ii)
owning and operating retail stores in states in which the Borrower has
determined there are advantages to operating retail stores in such state through
a Wholly-Owned Subsidiary.
"Transferee" is defined in Section 12.4.
"Trademark Subsidiary Promissory Note" means that certain subordinated
Promissory Note issued by the Borrower in favor of the Business Trust (as
assignee of BJ's Northeast Operating Company) in the aggregate principal amount
of $648,000,000 and dated September 21, 1999.
14
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more direct or indirect
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled by such Person.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and prior to
the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (i) make Loans to the Borrower and
(ii) participate in Facility LCs issued upon the request of the Borrower,
provided that, after giving effect to the making of each such Loan and the
issuance of each such Facility LC, such Lender's Outstanding Credit Exposure
shall not exceed in the aggregate at any one time outstanding the amount of its
Commitment. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow at any time prior to the Facility Termination Date. The
Commitments to extend credit hereunder shall expire on the Facility Termination
Date. The LC Issuer will issue Facility LCs hereunder on the terms and
conditions set forth in Section 2.20.
2.2 Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.
2.3 Ratable Loans. Each Advance hereunder (other than any Swing Line Loan)
shall consist of Revolving Loans made from the several Lenders ratably according
to their Pro Rata Shares.
15
2.4 Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10, or Swing Line Loans selected by the
Borrower in accordance with Section 2.5.
2.5 Swing Line Loans.
2.5.1 Amount of Swing Line Loans. Upon the satisfaction of the
conditions precedent set forth in Section 4.2 and, if such Swing Line
Loan is to be made on the date of the initial Advance hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as
well, from and including the date of this Agreement and prior to the
Facility Termination Date, the Swing Line Lender agrees, on the terms
and conditions set forth in this Agreement, to make Swing Line Loans to
the Borrower from time to time in an aggregate principal amount not to
exceed the Swing Line Commitment, provided that the Aggregate
Outstanding Credit Exposure shall not at any time exceed the Aggregate
Commitment, and provided further that at no time shall the sum of (i)
the Swing Line Lender's Pro Rata Share of the Swing Line Loans, plus
(ii) the outstanding Revolving Loans made by the Swing Line Lender
pursuant to Section 2.1, exceed the Swing Line Lender's Commitment at
such time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Facility Termination Date.
2.5.2 Borrowing Notice. The Borrower shall deliver to the Agent and
the Swing Line Lender irrevocable notice (a "Swing Line Borrowing
Notice") not later than noon (Chicago time) on the Borrowing Date of
each Swing Line Loan, specifying (i) the applicable Borrowing Date
(which date shall be a Business Day), and (ii) the aggregate amount of
the requested Swing Line Loan which shall be an amount not less than
$100,000. The Swing Line Loans shall bear interest at the Floating
Rate.
2.5.3 Making of Swing Line Loans. Promptly after receipt of a Swing
Line Borrowing Notice, the Agent shall notify each Lender by fax, or
other similar form of transmission, of the requested Swing Line Loan.
Not later than 2:00 p.m. (Chicago time) on the applicable Borrowing
Date, the Swing Line Lender shall make available the Swing Line Loan,
in funds immediately available in Chicago, to the Agent at its address
specified pursuant to Article XIII. The Agent will promptly make the
funds so received from the Swing Line Lender available to the Borrower
on the Borrowing Date at the Agent's aforesaid address.
2.5.4 Repayment of Swing Line Loans. Each Swing Line Loan shall be
paid in full by the Borrower on or before the fifth (5th) Business Day
after the Borrowing Date for such Swing Line Loan. In addition, the
Swing Line Lender (i) may at any time in its sole discretion with
respect to any outstanding Swing Line Loan, or (ii) shall on the fifth
(5th) Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Lender) to make a
Revolving Loan in the amount of such Lender's Pro Rata Share of such
Swing
16
Line Loan (including, without limitation, any interest accrued
and unpaid thereon), for the purpose of repaying such Swing Line
Loan. Not later than noon (Chicago time) on the date of any
notice received pursuant to this Section 2.5.4, each Lender
shall make available its required Revolving Loan, in funds
immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. Revolving Loans made
pursuant to this Section 2.5.4 shall initially be Floating Rate
Loans and thereafter may be continued as Floating Rate Loans or
converted into Eurodollar Loans in the manner provided in
Section 2.10 and subject to the other conditions and limitations
set forth in this Article II. Unless a Lender shall have
notified the Swing Line Lender, prior to its making any Swing
Line Loan, that any applicable condition precedent set forth in
Sections 4.1 or 4.2 had not then been satisfied, such Lender's
obligation to make Revolving Loans pursuant to this Section
2.5.4 to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected
by any circumstances, including, without limitation, (a) any
set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Agent, the Swing Line Lender or
any other Person, (b) the occurrence or continuance of a Default
or Unmatured Default, (c) any adverse change in the condition
(financial or otherwise) of the Borrower, or (d) any other
circumstances, happening or event whatsoever. In the event that
any Lender fails to make payment to the Agent of any amount due
under this Section 2.5.4, the Agent shall be entitled to
receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until
the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Lender fails to make payment to
the Agent of any amount due under this Section 2.5.4, such
Lender shall be deemed, at the option of the Agent, to have
unconditionally and irrevocably purchased from the Swing Line
Lender, without recourse or warranty, an undivided interest and
participation in the applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and participation may be
recovered from such Lender together with interest thereon at the
Federal Funds Effective Rate for each day during the period
commencing on the date of demand and ending on the date such
amount is received. On the Facility Termination Date, the
Borrower shall repay in full the outstanding principal balance
of the Swing Line Loans.
2.6 Facility Fee; Usage Fee; Reductions and Increases in Aggregate
Commitment.
(a) The Borrower agrees to pay to the Agent for the account of each
Lender according to its Pro Rata Share a facility fee at a per
annum rate equal to the Applicable Fee Rate on the Aggregate
Commitment (without regard to usage) from the date hereof to and
including the Facility Termination Date, payable on each Payment
Date hereafter and on the Facility Termination Date.
(b) The Borrower agrees to pay to the Agent for the account of each
Lender according to its Pro Rata Share a usage fee at a per
annum rate equal to the
17
Applicable Fee Rate on the average daily Outstanding Credit
Exposure for each calendar quarter for which such average daily
Outstanding Credit Exposure exceeds 33% of the Aggregate
Commitments as of the end of such calendar quarter, payable on
each Payment Date hereafter and on the Facility Termination
Date.
(c) The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders in integral
multiples of $5,000,000, upon at least three (3) Business Days'
written notice to the Agent, which notice shall specify the
amount of any such reduction, provided, however, that the amount
of the Aggregate Commitment may not be reduced below the
Aggregate Outstanding Credit Exposure. All accrued facility and
usage fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Credit
Extensions hereunder.
(d) The Borrower may, at its option, on up to two occasions, seek to
increase the Aggregate Commitment by up to an aggregate amount
of $50,000,000 (resulting in a maximum Aggregate Commitment of
$250,000,000) upon at least three (3) Business Days' prior
written notice to the Agent, which notice shall specify the
amount of any such increase and shall be delivered at a time
when no Default or Unmatured Default has occurred and is
continuing. The Borrower may, after giving such notice, offer
the increase (which may be declined by any Lender in its sole
discretion) in the Aggregate Commitment on either a ratable
basis to the Lenders or on a non pro-rata basis to one or more
Lenders and/or to other Lenders or entities reasonably
acceptable to the Agent. No increase in the Aggregate Commitment
shall become effective until the existing or new Lenders
extending such incremental Commitment amount and the Borrower
shall have delivered to the Agent a document in form reasonably
satisfactory to the Agent pursuant to which any such existing
Lender states the amount of its Commitment increase, any such
new Lender states its Commitment amount and agrees to assume and
accept the obligations and rights of a Lender hereunder and the
Borrower accepts such incremental Commitments. The Lenders (new
or existing) shall accept an assignment from the existing
Lenders, and the existing Lenders shall make an assignment to
the new or existing Lender accepting a new or increased
Commitment, of a direct or participation interest in each then
outstanding Advance and Facility L/C such that, after giving
effect thereto, all credit exposure hereunder is held ratably by
the Lenders in proportion to their respective Commitments.
Assignments pursuant to the preceding sentence shall be made in
exchange for the principal amount assigned plus accrued and
unpaid interest and facility, usage and letter of credit fees.
The Borrower shall make any payments under Section 3.4 resulting
from such assignments. Any such increase of the Aggregate
Commitment shall be subject to receipt by the Agent from the
Borrower of such supplemental opinions, resolutions,
certificates and other documents as the Agent may reasonably
request.
18
2.7 Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Floating Rate Advance (other than an Advance to repay Swing
Line Loans) shall be in the minimum amount of $3,000,000 (and in multiples of
$1,000,000 if in excess thereof), provided, however, that any Floating Rate
Advance may be in the amount of the Available Aggregate Commitment.
2.8 Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances (other
than Swing Line Loans), or, in a minimum aggregate amount of $1,000,000 any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Floating Rate Advances (other than Swing Line Loans) upon one (1)
Business Day's prior notice to the Agent. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans, or, in a minimum
amount of $100,000 and increments of $50,000 in excess thereof, any portion of
the outstanding Swing Line Loans, with notice to the Agent and the Swing Line
Lender by 11:00 a.m. (Chicago time) on the date of repayment. The Borrower may
from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $5,000,000 or any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Eurodollar Advances upon three (3) Business Days' prior notice to
the Agent.
2.9 Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) on the proposed Borrowing Date of each
Floating Rate Advance (other than a Swing Line Loan) and three (3) Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Revolving Loans in funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XIII. The Agent will make the funds so received from the Lenders available to
the Borrower at the Agent's aforesaid address.
2.10 Conversion and Continuation of Outstanding Advances. Floating
Rate Advances (other than Swing Line Loans) shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.10 or are repaid in accordance
with Section 2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest Period therefor, at which time
19
such Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance with
Section 2.8 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.7,
the Borrower may elect from time to time to convert all or any part of a
Floating Rate Advance (other than Swing Line Loans) into a Eurodollar Advance.
The Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of a Floating Rate Advance into a Eurodollar Advance
or continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time)
at least three (3) Business Days prior to the date of the requested conversion
or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.11 Changes in Interest Rate, etc. Each Floating Rate Advance (other
than Swing Line Loans) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.10, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.10 hereof, at a rate per annum
equal to the Floating Rate. Each Swing Line Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the day
such Swing Line Loan is made to but excluding the date it is paid, at a rate per
annum equal to the Floating Rate (or such other rate as may have been agreed to
by the Borrower and the Swing Line Lender) for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate Advance
will take effect simultaneously with each change in the Alternate Base Rate.
Each Eurodollar Advance shall bear interest on the outstanding principal amount
thereof from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined by the Agent as applicable to such Eurodollar Advance
based upon the Borrower's selections under Sections 2.8 and 2.9 and otherwise in
accordance with the terms hereof. No Interest Period may end after the Facility
Termination Date.
2.12 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may
20
be revoked at the option of the Required Lenders notwithstanding any provision
of Section 8.2 requiring unanimous consent of the Lenders to changes in interest
rates), declare that (i) each Eurodollar Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall
bear interest at a rate per annum equal to the Floating Rate in effect from time
to time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per
annum, provided that, during the continuance of a Default under Section 7.6 or
7.7, the interest rates set forth in clauses (i) and (ii) above and the increase
in the LC Fee set forth in clause (iii) above shall be applicable to all Credit
Extensions without any election or action on the part of the Agent or any
Lender.
2.13 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except with respect to repayments of Swing Line Loans and except in
the case of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Agent among the Lenders. Each payment delivered to the
Agent for the account of any Lender shall be delivered promptly by the Agent to
such Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of the Borrower maintained with Bank One for each payment of
principal, interest, Reimbursement Obligations and fees as it becomes due
hereunder. Each reference to the Agent in this Section 2.13 shall also be deemed
to refer, and shall apply equally, to the LC Issuer, in the case of payments
required to be made by the Borrower to the LC Issuer pursuant to Section 2.20.6.
2.14 Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such
Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof and
the Interest Period with respect thereto, (b) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, (c) the
original stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any
sum received by the Agent hereunder from the Borrower and each
Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or any Lender
to maintain such accounts or any error therein shall not in any
manner
21
affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note or, in the case of the Swing Line Lender, promissory notes
representing its Revolving Loans and Swing Line Loans, respectively
(each a "Note"). In such event, the Borrower shall prepare, execute
and deliver to such Lender a Note payable to the order of such Lender
in a form supplied by the Agent. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after
any assignment pursuant to Section 12.3) be represented by one or
more Notes payable to the order of the payee named therein or any
assignee pursuant to Section 12.3, except to the extent that any such
Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as
described in paragraphs (i) and (ii) above.
2.15 Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.16 Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, facility and usage fees and LC Fees shall be
calculated for actual days elapsed on the basis of a 360-day year (except that
interest on Floating Rate Advances shall be calculated for actual days elapsed
on the basis of a 365-day year, or when appropriate, 366-day year). Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
22
2.17 Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Agent will notify each Lender of the contents of each request for issuance of a
Facility LC hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.18 Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.19 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.20 Facility LCs.
2.20.1 Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue Standby LCs and
Commercial LCs (each, a "Facility LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("Modify,"
and each such action a "Modification"), from time to time from and
including the date of this Agreement and prior to the Facility
Termination Date upon the request of and for the account of the
Borrower; provided that immediately after each such Facility LC is
issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed
23
$50,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall
not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than the earlier of (x) the fifth Business Day
prior to the Facility Termination Date and (y) one year after its
issuance (provided that any Facility LC may provide for annual
successive one-year renewals thereof provided that no Facility LC
expiry date shall occur after the date in clause (x) above).
2.20.2 Participations. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.20, the LC
Issuer shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably purchased from the LC Issuer,
a participation in such Facility LC (and each Modification thereof)
and the related LC Obligations in proportion to its Pro Rata Share.
2.20.3 Notice. Subject to Section 2.20.1, the Borrower shall give
the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least
three (3) Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of
such Facility LC, and describing the proposed terms of such Facility
LC and the nature of the transactions proposed to be supported
thereby. Upon receipt of such notice, the LC Issuer shall promptly
notify the Agent, and the Agent shall promptly notify each Lender, of
the contents thereof and of the amount of such Lender's participation
in such proposed Facility LC. The issuance or Modification by the LC
Issuer of any Facility LC shall, in addition to the conditions
precedent set forth in Article IV (the satisfaction of which the LC
Issuer shall have no duty to ascertain), be subject to the conditions
precedent that such Facility LC shall be satisfactory to the LC
Issuer and that the Borrower shall have executed and delivered such
application agreement and/or such other instruments and agreements
relating to such Facility LC as the LC Issuer shall have reasonably
requested (each, a "Facility LC Application"). In the event of any
conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
2.20.4 Fees. The Borrower shall pay to the Agent, for the account
of the Lenders ratably in accordance with their respective Pro Rata
Shares, (i) with respect to each Standby LC, a letter of credit fee
at a per annum rate equal to the Applicable Fee Rate for Standby LCs
in effect from time to time on the average daily undrawn stated
amount under such Standby LC, such fee to be payable in arrears on
each Payment Date and on the Facility Termination Date, and (ii) with
respect to each Commercial LC, a per annum rate equal to the
Applicable Fee Rate for Commercial LCs in effect from time to time on
the average daily undrawn stated amount under such Commercial LC,
such fee to be payable in arrears on each Payment Date and on the
Facility Termination Date (each such fee described in this sentence
an "LC Fee"). The Borrower shall also pay to the LC Issuer for its
own account (x) at the time of issuance of each Facility LC, a
fronting fee in an
24
amount to be agreed upon between the LC Issuer and the Borrower, and
(y) documentary and processing charges in connection with the
issuance or Modification of and draws under Facility LCs in
accordance with the LC Issuer's standard schedule for such charges as
in effect from time to time.
2.20.5 Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify the Borrower and each other Lender as to the
amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of
the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment
shall be in conformity in all material respects with such Facility
LC. The LC Issuer shall endeavor to exercise the same care in the
issuance and administration of the Facility LCs as it does with
respect to letters of credit in which no participations are granted,
it being understood that in the absence of any gross negligence or
willful misconduct by the LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the
occurrence of any Default or any condition precedent whatsoever, to
reimburse the LC Issuer on demand for (i) such Lender's Pro Rata
Share of the amount of each payment made by the LC Issuer under each
Facility LC to the extent such amount is not reimbursed by the
Borrower pursuant to Section 2.20.6 below, plus (ii) interest on the
foregoing amount to be reimbursed by such Lender, for each day from
the date of the LC Issuer's demand for such reimbursement (or, if
such demand is made after 11:00 a.m. (Chicago time) on such date,
from the next succeeding Business Day) to the date on which such
Lender pays the amount to be reimbursed by it, at a rate of interest
per annum equal to the Federal Funds Effective Rate for the first
three (3) days and, thereafter, at a rate of interest equal to the
rate applicable to Floating Rate Advances.
2.20.6 Reimbursement by Borrower. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the LC Issuer on or before
the applicable LC Payment Date for any amounts paid by the LC Issuer
upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that neither the
Borrower nor any Lender shall hereby be precluded from asserting any
claim for direct (but not consequential) damages suffered by the
Borrower or such Lender to the extent, but only to the extent, caused
by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued
by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC
Issuer and remaining unpaid by the Borrower shall bear interest,
payable on demand, for each day until paid at a rate per annum equal
to (x) the rate applicable to Floating Rate Advances for such day if
such day falls on or
25
before the applicable LC Payment Date and (y) the sum of 2% plus the
rate applicable to Floating Rate Advances for such day if such day
falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole
or in part, of the Reimbursement Obligation in respect of any
Facility LC issued by the LC Issuer, but only to the extent such
Lender has made payment to the LC Issuer in respect of such Facility
LC pursuant to Section 2.20.5. Subject to the terms and conditions of
this Agreement (including without limitation the submission of a
Borrowing Notice in compliance with Section 2.9 and the satisfaction
of the applicable conditions precedent set forth in Article IV), the
Borrower may request an Advance hereunder for the purpose of
satisfying any Reimbursement Obligation.
2.20.7 Obligations Absolute. The Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. Subject to
the provisions of Section 2.20.8, the Borrower further agrees with
the LC Issuer and the Lenders that the LC Issuer and the Lenders
shall not be responsible for, and the Borrower's Reimbursement
Obligation in respect of any Facility LC shall not be affected by,
among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, fraudulent or forged, or any
dispute between or among the Borrower, any of its Affiliates, the
beneficiary of any Facility LC or any financing institution or other
party to whom any Facility LC may be transferred or any claims or
defenses whatsoever of the Borrower or of any of its Affiliates
against the beneficiary of any Facility LC or any such transferee.
Subject to the provisions of Section 2.20.8, the LC Issuer shall not
be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. Subject to the
provisions of Section 2.20.8, the Borrower agrees that any action
taken or omitted by the LC Issuer or any Lender under or in
connection with each Facility LC and the related drafts and
documents, if done without gross negligence or willful misconduct,
shall be binding upon the Borrower and shall not put the LC Issuer or
any Lender under any liability to the Borrower. Nothing in this
Section 2.20.7 is intended to limit the right of the Borrower to make
a claim against the LC Issuer for damages as contemplated by the
proviso to the first sentence of Section 2.20.6.
2.20.8 Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC
Issuer shall be
26
fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems
appropriate or it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take
any such action. Notwithstanding any other provision of this Section
2.20, the LC Issuer shall, as between the Lenders and the LC Issuer,
in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.20.9 Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent
by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure
to pay under any Facility LC or any actual or proposed use of any
Facility LC, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the LC Issuer may incur
by reason of or in connection with (i) the failure of any other
Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender) or (ii) by reason of
or on account of the LC Issuer issuing any Facility LC which
specifies that the term "Beneficiary" included therein includes any
successor by operation of law of the named Beneficiary, but which
Facility LC does not require that any drawing by any such successor
Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such
successor Beneficiary; provided that the Borrower shall not be
required to indemnify any Lender, the LC Issuer or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct
or gross negligence of the LC Issuer or (y) the LC Issuer's failure
to pay under any Facility LC after the presentation to it of a
request strictly complying with the terms and conditions of such
Facility LC. Nothing in this Section 2.20.9 is intended to limit the
obligations of the Borrower under any other provision of this
Agreement.
2.20.10 Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation
to it of a request strictly complying with the terms and conditions
of the Facility LC) that
27
such indemnitees may suffer or incur in connection with this Section
2.20 or any action taken or omitted by such indemnitees hereunder.
2.20.11 Facility LC Collateral Account. The Borrower agrees that it
will, upon the request of the Agent or the Required Lenders and until
the final expiration date of any Facility LC and thereafter as long
as any amount is payable to the LC Issuer or the Lenders in respect
of any Facility LC, maintain a special collateral account pursuant to
arrangements satisfactory to the Agent (the "Facility LC Collateral
Account") at the Agent's office at the address specified pursuant to
Article XIII, in the name of such Borrower but under the sole
dominion and control of the Agent, for the benefit of the Lenders and
in which such Borrower shall have no interest other than as set forth
in Section 8.1. The Borrower hereby pledges, assigns and grants to
the Agent, on behalf of and for the ratable benefit of the Lenders
and the LC Issuer, a security interest in all of the Borrower's
right, title and interest in and to all funds which may from time to
time be on deposit in the Facility LC Collateral Account to secure
the prompt and complete payment and performance of the Obligations.
The Agent will invest any funds on deposit from time to time in the
Facility LC Collateral Account in certificates of deposit of Bank One
having a maturity not exceeding thirty (30) days. Nothing in this
Section 2.20.11 shall either obligate the Agent to require the
Borrower to deposit any funds in the Facility LC Collateral Account
or limit the right of the Agent to release any funds held in the
Facility LC Collateral Account in each case other than as required by
Section 8.1.
2.20.12 Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other
Lender.
2.20.13 Outstanding Letters of Credit. The letters of credit set
forth on Schedule 2.20.13 hereto were issued pursuant to the Prior
Agreement and remain outstanding as of the date of this Agreement
(the "Outstanding Letters of Credit"). The Borrower, each LC Issuer
and each of the Lenders hereby agree with respect to the Outstanding
Letters of Credit that effective upon the first date upon which the
conditions set forth in Sections 4.1 and 4.2 are satisfied, such
Outstanding Letters of Credit, for all purposes under this Agreement,
shall be deemed to be Facility LCs governed by the terms and
conditions of this Agreement and each Lender shall participate in
each Outstanding Letter of Credit issued by any LC Issuer in an
amount equal to its Pro Rata Share of the face amount of such
Outstanding Letter of Credit.
2.21 Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided
28
further that, concurrently with such replacement, (i) another bank or other
entity which is reasonably satisfactory to the Borrower and the Agent (provided
that any existing Lender shall be automatically deemed satisfactory) shall
agree, as of such date, to purchase for cash the Advances and other Obligations
due to the Affected Lender pursuant to an assignment substantially in the form
of Exhibit B and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Affected Lender to be terminated as of such date
and to comply with the requirements of Section 12.3 applicable to assignments,
and (ii) the Borrower shall pay to such Affected Lender in same day funds on the
day of such replacement (A) all interest, fees and other amounts then accrued
but unpaid to such Affected Lender by the Borrower hereunder to and including
the date of termination, including without limitation payments due to such
Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1 Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation or the LC
Issuer to any Taxes, or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to any Lender or the LC
Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation or the LC
Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation or the LC
Issuer of making, funding or maintaining its Eurodollar Loans, or of
issuing or participating in Facility LCs, or reduces any amount
receivable by any Lender or any applicable Lending Installation or
the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated
by reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest
29
or LC Fees received by it, by an amount deemed material by such
Lender, or the LC Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within fifteen (15) days of demand by such Lender or the LC Issuer, as the case
may be, the Borrower shall pay such Lender or the LC Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.
3.2 Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
determines the amount of capital required to be maintained by such Lender or the
LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any
corporation controlling such Lender or the LC Issuer is increased as a result of
a Change, then, within fifteen (15) days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or the LC Issuer or any Lending
Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3 Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
30
3.4 Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5 Taxes. (i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or Facility LC
Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within thirty (30)
days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder
or under any Note or Facility LC Application or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note
or Facility LC Application ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Agent, the LC Issuer or
such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within thirty (30) days of
the date the Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not more than ten (10) Business Days after the
date of this Agreement, or, if later, the date it becomes a Lender,
deliver to each of the Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form W-8BEN, W-8ECI,
W-8IMY or such other form as allowed by the United States Internal
Revenue Service, certifying in each case that such Lender is entitled
to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. Each Non-U.S.
Lender further undertakes to deliver
31
to each of the Borrower and the Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms
so delivered by it, such additional forms or amendments thereto as
may be reasonably requested by the Borrower or the Agent. All forms
or amendments described in the preceding sentence shall certify that
such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with respect to
it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of
United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv) above
or a Lender has failed to provide the forms pursuant to clause (vi)
below (unless, in each case, such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes that would have been avoided
if the Lender had provided the forms that it was required to provide
under clauses (iv) and/or (vi); provided that, should a Lender which
is otherwise exempt from or subject to a reduced rate of withholding
tax become subject to Taxes because of its failure to deliver a form
required under clause (iv) or (vi) the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any
Note pursuant to the law of any relevant jurisdiction or any treaty
shall deliver to the Borrower (with a copy to the Agent), at the time
or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate;
provided, however, that a Non-U.S. Lender that complies with the
requirements of clause (iv) shall be considered to have complied with
this clause (vi) with respect to the withholding of Taxes under the
Code.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or properly
completed, because such Lender failed to notify the Agent of a change
in
32
circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the
Agent as tax, withholding therefor, or otherwise, including penalties
and interest, and including taxes imposed by any jurisdiction on
amounts payable to the Agent under this subsection, together with all
costs and expenses related thereto (including attorneys fees and time
charges of attorneys for the Agent, which attorneys may be employees
of the Agent). The obligations of the Lenders under this Section
3.5(vii) shall survive the payment of the Obligations and termination
of this Agreement.
3.6 Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement; provided, that
notwithstanding anything herein to the contrary, the Borrower shall not be
liable for and shall not be required to compensate or indemnify any Lender or
the LC Issuer for any amount or amounts pursuant to Section 3.1, 3.2 or 3.4
unless a demand is made upon the Borrower within 120 days after the date upon
which the applicable Lender's or LC Issuer's right to reimbursement arises.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder unless the Borrower has furnished to the
Agent with sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation, certificate
of limited partnership or declaration of trust, as applicable, of the
Borrower and each Guarantor, together with all amendments, and a
certificate of good standing, each certified by the appropriate
governmental officer in the applicable jurisdiction of incorporation.
33
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Guarantor, of its by-laws or agreement of limited
partnership, as applicable, and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower or such Guarantor is a party.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and each Guarantor, which shall identify
by name and title and bear the signatures of the Authorized Officers
and any other officers of the Borrower or such Guarantor authorized
to sign the Loan Documents to which the Borrower or such Guarantor
is a party, upon which certificate the Agent and the Lenders shall
be entitled to rely until informed of any change in writing by the
Borrower or such Guarantor.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in form and substance satisfactory to the Agent and its
counsel.
(vi) Any Notes requested by a Lender pursuant to Section 2.14 payable to
the order of each such requesting Lender.
(vii) Executed originals of this Agreement and of the Subsidiary Guaranty
substantially in the form attached hereto as Exhibit D, each of
which shall be in full force and effect, together with all schedules
and exhibits required to be delivered pursuant hereto and thereto.
(viii) Written money transfer instructions, in substantially the form of
Exhibit C, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
(ix) Evidence that concurrently with the initial Credit Extension
hereunder, the Prior Agreement is being terminated and all amounts
due and payable thereunder paid.
(x) Such other documents as any Lender, the LC Issuer or its counsel may
have reasonably requested.
4.2 Each Credit Extension. The Lenders shall not be required to make any
Credit Extension (except as otherwise set forth in Section 2.5.4 with respect to
Revolving Loans for the purpose of repaying Swing Line Loans) unless on the
applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
34
(ii) The representations and warranties contained in Article V are true
and correct as of such Credit Extension Date except to the extent any
such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit Extension
shall be reasonably satisfactory to the Lenders and their counsel.
Each Borrowing Notice, Swing Line Borrowing Notice, or request for issuance
of a Facility LC, as the case may be, with respect to each such Credit Extension
shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender
may require a duly completed compliance certificate in substantially the form of
Exhibit A as a condition to making a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Existence and Standing. Each of the Borrower and its Subsidiaries is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to have such requisite
authority or to have such good standing would not have a Material Adverse
Effect.
5.2 Authorization and Validity. The Borrower and each Guarantor has the
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery by the Borrower and each Guarantor of the Loan Documents to which it is
a party and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings, and the Loan Documents to which the
Borrower and each Guarantor is a party constitute legal, valid and binding
obligations of the Borrower and such Guarantor enforceable against such party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3 No Conflict; Government Consent. Neither the execution and delivery by
the Borrower and each Guarantor of the Loan Documents to which it is a party,
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate (i) any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement
35
to which the Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms of
any such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by the Borrower or any of its Subsidiaries, is required to be
obtained by the Borrower or any of its Subsidiaries in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower of the Obligations or the
legality, validity, binding effect or enforceability of any of the Loan
Documents.
5.4 Financial Statements. The consolidated financial statements of the
Borrower and its Subsidiaries heretofore delivered to the Lenders were prepared
in accordance with generally accepted accounting principles in effect on the
date such statements were prepared and fairly present the consolidated financial
condition and operations of the Borrower and its Subsidiaries at such date and
the consolidated results of their operations for the period then ended.
5.5 Material Adverse Change Default. Since February 2, 2002, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries taken
as a whole which could reasonably be expected to have a Material Adverse Effect.
No Default or Unmatured Default has occurred and is continuing.
5.6 Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which no
Lien exists. The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service (or the
applicable statute of limitations is closed) through the fiscal year ended
January 31, 1998. No tax liens have been filed and no claims are being asserted
with respect to any such taxes. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate. If the Borrower or any of its Subsidiaries is
a limited liability company, each such limited liability company qualifies for
partnership tax treatment under United States federal tax law.
5.7 Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extension. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
36
5.8 Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $1,000,000. Neither the Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group has withdrawn from any Plan or initiated steps to
do so, and no steps have been taken to reorganize or terminate any Plan for
which the Borrower or other member of the Controlled Group has any Unfunded
Liability.
5.10 Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact as of the date furnished or omitted
to state a material fact or any fact necessary to make the statements contained
therein not misleading as of the date furnished.
5.11 Regulation U. Neither the Borrower nor any Subsidiary is engaged,
directly or indirectly, principally, or as one of its important activities, in
the business of extending, or arranging for the extension of, credit for the
purpose of purchasing or carrying Margin Stock. No part of the proceeds of any
Loan will be used in a manner which would violate, or result in a violation of,
Regulation U or Regulation X. Neither the making of any Advance hereunder nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulation U or Regulation X. Margin stock (as defined in
Regulation U) constitutes less than 25% of the value of those assets of the
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge, or other restriction hereunder.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13 Compliance With Laws. The Borrower and its Subsidiaries have complied
in all material respects with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property.
37
5.14 Ownership of Properties. On the date of this Agreement, the Borrower
and its Subsidiaries have good title, free of all Liens other than those
permitted by Section 6.15, to all of the Property and assets reflected in the
Borrower's most recent consolidated financial statements provided to the Agent
as owned by the Borrower and its Subsidiaries.
5.15 Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code.
5.16 Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17 Investment Company Act. Neither the Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18 Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19 Insurance. The property and casualty insurance program carried by the
Borrower is adequate for its business needs.
5.20 Solvency. Immediately after the consummation of the transactions to
occur on the date hereof and immediately following the making of each Credit
Extension, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Credit Extensions the Borrower and its
Subsidiaries taken as a whole are Solvent.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
38
6.1 Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary on a consolidated basis, a system of accounting established and
administered in accordance with generally accepted accounting principles, and
furnish to the Lenders:
(i) Within ninety (90) days after the close of each of its fiscal years,
an unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in generally
accepted accounting principles and required or approved by the
Borrower's independent certified public accountants) audit report
certified by independent certified public accountants acceptable to
the Lenders, prepared in accordance with Agreement Accounting
Principles on a consolidated basis for itself and its Subsidiaries,
including balance sheets as of the end of such period, related profit
and loss, reconciliation of surplus and cash flow statements,
accompanied by (a) any management letter prepared by said
accountants, and (b) a certificate of said accountants that, in the
course of their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature and
status thereof and setting forth the calculation of the covenants set
forth in Section 6.19 hereof. Such accountants shall not be liable by
reason of any failure to obtain knowledge of any Default or Unmatured
Default which would not be disclosed in the ordinary course of an
audit.
(ii) Within fifty (50) days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its Subsidiaries,
a consolidated unaudited balance sheet as at the close of each such
period and consolidated profit and loss and reconciliation of surplus
and a statement of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its
chief financial officer.
(iii) Together with the financial statements required under Sections 6.1(i)
and (ii), a compliance certificate in substantially the form of
Exhibit A signed by its chief financial officer showing the
calculations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status
thereof.
(iv) As soon as available, but in any event on or before the 120th day of
each fiscal year of the Borrower, a copy of the plan and forecast
(including a one year projected consolidated balance sheet, income
statement and funds flow statement) of the Borrower and its
Subsidiaries on a consolidated basis for such fiscal year.
(v) With respect to each Single Employer Plan, within 270 days after the
close of each fiscal year, a statement of the Unfunded Liabilities of
such Single Employer Plan, certified as correct by an actuary
enrolled under ERISA.
39
(vi) As soon as possible and in any event within ten (10) days after the
Borrower knows that any Reportable Event has occurred with respect
to any Plan, a statement, signed by the chief financial officer of
the Borrower, describing said Reportable Event and the action which
the Borrower proposes to take with respect thereto.
(vii) As soon as possible and in any event within ten (10) days after
receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the release by the Borrower, any
of its Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
and (c) any notice of any event or occurrence or the assertion or
commencement of any claims, actions, or other proceeding or against
or affecting the Borrower or any Subsidiary which, in the case of
clause (a), (b) or (c) could reasonably be expected to have a
Material Adverse Effect.
(viii) For any fiscal quarter during which the Borrower has created a new
Subsidiary or terminated the existence of any existing Subsidiary as
may be permitted hereunder, together with the financial statements
required hereunder covering such period, a certificate signed by an
Authorized Officer attaching a revised Schedule 5.8 which modifies
the list of Subsidiaries contained therein to show any such
additions and deletions the delivery of which shall be deemed to be
a representation and warranty of the Borrower as to the accuracy of
such revised Schedule.
(ix) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(x) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission.
(xi) Such other information (including non-financial information) as the
Agent or any Lender may from time to time reasonably request.
6.2 Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for general corporate purposes.
The Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U).
6.3 Notice of Default. The Borrower will, and will cause each Guarantor
to, give prompt notice in writing to the Lenders of the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
40
6.4 Conduct of Business. The Borrower will, and will cause each Active
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to conduct business,
remain incorporated or organized and in good standing or have such requisite
authority would not have a Material Adverse Effect.
6.5 Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles. At any time that the Borrower or any of
its Subsidiaries is organized as a limited liability company, each such limited
liability company will qualify for partnership tax treatment under United States
federal tax law.
6.6 Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies (and/or
through a self-insurance program) insurance on all their Property in such
amounts (and/or with such reserves) and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply in all material respects with all material laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental Laws.
6.8 Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property which is used or useful in the business of the Borrower or any of
its Subsidiaries in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9 Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may request.
6.10 Dividends. The Borrower will not, nor will it permit any Subsidiary
to, declare or pay any dividends on its capital stock (other than dividends
payable in its own capital stock) or
41
redeem, repurchase or otherwise acquire or retire any of its capital stock at
any time outstanding, except that (i) any Subsidiary may declare and pay
dividends to the Borrower or to a Wholly-Owned Subsidiary and (ii) so long as
prior to and after giving effect thereto no Default or Unmatured Default shall
exist the Borrower and each Subsidiary may declare or pay any dividends on its
capital stock and redeem, repurchase or otherwise acquire or retire any of its
capital stock. Solely for purposes of determining compliance with Sections
6.19.1 and 6.19.2 for purposes of the foregoing condition, the date of the
proposed declaration, dividend, redemption, repurchase or other acquisition or
retirement shall be deemed the end of a fiscal quarter.
6.11 Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans, the Reimbursement Obligations and obligations to the
Lenders under or in connection with the Loan Documents.
(ii) Indebtedness existing on the date hereof and described in Schedule
6.11 hereto.
(iii) Contingent Obligations (a) by endorsement of instruments for deposit
or collection in the ordinary course of business, (b) to purchase
real property from another Person or guaranties incurred in the
ordinary course of business in connection with the purchase or lease
of stores or distribution centers, provided that (A) not less than
eighty percent (80%) of the total square footage of each such store
or distribution center so purchased or leased shall be utilized by
the Borrower or its Subsidiaries and (B) the aggregate amount of
such Contingent Obligations pursuant to this clause (b) at any time
outstanding shall not exceed $50,000,000, (c) consisting of
guaranties incurred by the Borrower to support operating leases
and/or Indebtedness incurred by any Subsidiary not prohibited
hereunder and (d) obligations as the general partner of the
Trademark Subsidiary.
(iv) Indebtedness of one or more special purpose Wholly-Owned
Subsidiaries in connection with a transfer by the Borrower or a
Wholly-Owned Subsidiary of interests in accounts or notes receivable
on a limited recourse basis, provided that (a) such transfer
qualifies as a sale under generally accepted accounting principles
and (b) any such Indebtedness, at any time outstanding, does not
exceed $50,000,000 in the aggregate.
(v) Capitalized Lease Obligations due from the Borrower or any Real
Estate Subsidiary not to exceed, at any time outstanding,
$75,000,000 in the aggregate.
(vi) Obligations to make "earnout" payments in respect of Acquisitions
permitted hereby.
(vii) Investments permitted under Section 6.14.
(viii) Indebtedness of the Borrower owing to any Wholly-Owned Subsidiary or
of any Guarantor owing to the Borrower or to any Wholly-Owned
Subsidiary.
42
(ix) Additional Indebtedness of the Borrower or its Subsidiaries, at any
time outstanding; provided that no more than $25,000,000 in the
aggregate of such Indebtedness incurred by the Borrower's
Subsidiaries may be outstanding at any one time; and provided further
that, after giving effect thereto, the Borrower would be in
compliance with Section 6.19.1 (treating the date of incurrence as a
fiscal quarter end).
6.12 Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that:
(i) a Subsidiary may merge with and into the Borrower or a Wholly-Owned
Subsidiary;
(ii) the Borrower may merge or consolidate with any Person which is in a
business related to the Borrower's business; and
(iii) any Subsidiary of the Borrower may merge or consolidate with or into
another Person in a transaction constituting (A) a disposition of
assets by the Borrower so long as such disposition is permitted by
Section 6.13 hereof or (B) an Acquisition so long as such Acquisition
is permitted by Section 6.14;
provided that in each such case, (a) immediately after giving effect thereto, no
event shall occur and be continuing that constitutes a Default or Unmatured
Default and, (b) in the case of any such merger or consolidation to which the
Borrower is a party, the Borrower is the surviving corporation.
6.13 Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except:
(i) for sales of inventory in the ordinary course of business and
obsolete, worn out or no longer useful equipment in the ordinary
course of business;
(ii) that (A) any Subsidiary may sell, lease or otherwise dispose of
assets (x) to any other Subsidiary which is a Guarantor or to the
Borrower and (y) to any Subsidiary which is not a Guarantor so long
as after giving effect to any such disposition the aggregate amount
of all such dispositions pursuant to this subsection (ii) during the
proceeding twelve month period does not exceed five percent (5%) of
the Borrower's consolidated assets as of the last day of the most
recently ended fiscal quarter of the Borrower, (B) the Borrower may
transfer liquor licenses owned by the Borrower or other permits
obtained by the Borrower and used in the operation of any of the
stores to any such Subsidiary and (C) the Borrower may transfer or
sell operating assets to the Trademark Subsidiary in the ordinary
course of business consistent with the past practices of the
Borrower;
(iii) for any transfer of an interest in accounts or notes receivable on a
limited recourse basis, provided that such transfer qualifies as a
sale under generally accepted accounting principles;
43
(iv) for leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other than
dispositions permitted under clauses (i), (ii) and (iii) above) as
permitted by this Section during the twelve-month period ending with
the month in which any such lease, sale or other disposition occurs,
do not constitute a Substantial Portion of the Property of the
Borrower and its Subsidiaries;
(v) for sales of Permitted Investments in the ordinary course of
business;
provided that in each such case, immediately after giving effect thereto, no
event shall have occurred and be continuing that constitutes a Default or an
Unmatured Default.
6.14 Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to:
(a) make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, except:
(i) Investments in Subsidiaries made prior to the date hereof and
described in Schedule 6.14 hereto.
(ii) Permitted Investments.
(iii) Investments consisting of loans to participants, or the purchase of
securities of the Borrower from participants, made pursuant to the
provisions of any employee benefit plan, including without
limitation the Borrower's 1997 Replacement Stock Incentive Plan,
1997 Stock Incentive Plan or the 1997 Director Stock Option Plan.
(iv) Investments consisting of stock or other securities acquired in
connection with the satisfaction or enforcement of Indebtedness or
other claims due or owing to the Borrower or any Subsidiary or as
security for any such Indebtedness or claim.
(v) Loans made by the Borrower in connection with the development of new
retail establishments or distribution centers for the Borrower;
provided that the aggregate outstanding amount of all such loans, as
and when any such loan is made, shall not exceed five percent (5%)
of the Borrower's consolidated assets as of the last day of the most
recently ended fiscal quarter of the Borrower.
(vi) Investments made by the Borrower in the Investment Subsidiary for
the purpose of making Permitted Investments.
(vii) Investments made by any Subsidiary in the Borrower.
(viii) Investments in the Trademark Subsidiary; provided that when
aggregated with Investments made pursuant to clause 6.14(a)(i)
hereof, (A) the aggregate amount of all such Investments shall not
exceed twenty five percent (25%) of an amount
44
equal to (i) the book value of the Borrower's consolidated assets
less (ii) the book value of real estate owned by the Real Estate
Subsidiaries and (B) the aggregate amount of all such Investments in
the Trademark Subsidiary shall not exceed an amount equal to fifteen
percent (15%) of an amount equal to (i) the book value of the
Borrower's consolidated assets less (ii) the book value of real
estate owned by the Real Estate Subsidiaries.
(ix) Investments made by the Borrower, any Real Estate Subsidiary or the
Trademark Subsidiary in any Real Estate Subsidiary, so long as, for
any such Real Estate Subsidiary receiving Investments, the sum of
such Investments plus any other Indebtedness of such Real Estate
Subsidiary does not exceed 105% of the acquisition cost of the real
estate owned by such Real Estate Subsidiary.
(x) Investments made by means of a merger or consolidation permitted by
Section 6.12 hereof.
(xi) For the Borrower only: any Investment consisting of (A) the
acquisition of stock or other equity interests which constitutes an
Acquisition permitted pursuant to the terms of Section 6.14(b); (B)
the creation of any new Subsidiary to act as the purchaser in an
Acquisition permitted pursuant to the terms of Section 6.14(b); and
(C) an Investment in a Subsidiary for the purpose of facilitating an
Acquisition permitted pursuant to the terms of Section 6.14(b),
provided, however, that the aggregate amount of such Investments
made since the date hereof is less than thirty percent (30%) of Net
Worth at the time of the Investment.
(xii) The creation of any new Wholly-Owned Subsidiary.
(xiii) Investments in one or more special purpose entities made in
connection with a transfer by the Borrower or a Wholly-Owned
Subsidiary of interests in accounts or notes receivable on a limited
recourse basis, provided that (a) such transfer qualifies as a sale
under generally accepted accounting principles and (b) any such
Investments, at any time outstanding, do not exceed $50,000,000 in
the aggregate.
(xiv) Rate Hedging Obligations in a notional amount not to exceed
$100,000,000.
(xv) Additional Investments, at any time outstanding, not to exceed
$25,000,000 in the aggregate.
(b) make any Acquisition of any Person, except for an Acquisition: (i)
for which the board of directors of the Person being acquired has approved the
terms of the Acquisition, (ii) the purchase price of which (including the
aggregate amount of (i) assumed liabilities for borrowed money, (ii) deferred
compensation and (iii) non-compete and earn-out payments), when added to the
purchase price of all other Acquisitions made during the same fiscal year, is
less than twenty five percent (25%) of the Borrower's consolidated assets as of
the beginning of such fiscal year, (iii) the giving effect to which will not
cause a Default or an Unmatured Default and (iv) for which the Borrower has
previously provided the Lenders with (a) financial information with
45
respect to the entity to be acquired (including historical financial statements,
pro-forma statements after giving effect to the Acquisition and projections) and
(b) to the extent available, a detailed description of the entity to be
acquired, its products, markets served and customer concentrations.
6.15 Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business.
(iii) Liens arising out of pledges or deposits under worker's compensation
laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other encumbrances
or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which
do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of the Borrower or
the Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 6.15
hereto.
(vi) Liens incurred in connection with purchase money financing of
Property in the ordinary course of business, provided that such
Liens shall attach solely to the Property acquired and any
improvement thereon and shall not attach to any other Property and
the amount of Indebtedness secured thereby shall at no time exceed
$50,000,000 in the aggregate.
(vii) Liens existing on Property acquired by the Borrower or any of its
Subsidiaries at the time of its Acquisition, so long as such Lien
was not created in contemplation of such Acquisition.
(viii) Liens resulting from commitments of the Borrower and its
Subsidiaries under Capitalized Leases.
(ix) Liens incurred in connection with any transfer of an interest in
accounts or notes receivable, that at the time of such transfer,
qualified as a sale under generally accepted accounting principles.
46
(x) Liens under leases of personalty or real estate to which the
Borrower and any of its Subsidiaries is a party, provided that such
Liens (A) do not attach to inventory held for sale in leased stores
or warehouses except only after bankruptcy, insolvency or similar
events to the extent of any landlord's lien, (B) are not incurred in
connection with the borrowing of money or the obtaining of advances
or credit by the Borrower or any of its Subsidiaries, and (C) do not
in the aggregate materially detract from the value of the Property
of the Borrower and its Subsidiaries or materially impair the use
thereof in the operation of their respective businesses.
(xi) Liens incidental to the conduct of the business of the Borrower or
any of its Subsidiaries which do not cover accounts receivable,
cover only de minimis amounts of inventory sold to the Borrower and
its Subsidiaries by certain suppliers to secure the amounts owing
such suppliers for the same, are not incurred in connection with the
borrowing of money or the obtaining of advances or credits or in
connection with the acquisition of real property or machinery or
equipment except incidental to the acquisition of business
properties as a whole or as a going concern, and which do not in the
aggregate materially detract from the value of the Property of the
Borrower or any of its Subsidiaries or materially impair the use
thereof in the operation of their respective businesses.
(xii) Liens granted by any Subsidiary to the Borrower or a Wholly-Owned
Subsidiary to secure loans from the Borrower or such Wholly-Owned
Subsidiary, which loans were permitted by Section 6.14(a) and Liens
on real estate granted by the Borrower to any Real Estate Subsidiary
which secure Indebtedness owed by the Borrower to any Wholly-Owned
Subsidiary in an aggregate amount at any time outstanding not in
excess of $50,000,000.
(xiii) Liens on real property which relate to Indebtedness of the Borrower
or any Real Estate Subsidiary incurred in the ordinary course of
business in connection with the financing of real property in an
amount not to exceed $50,000,000 in the aggregate at any time
outstanding.
(xiv) In addition to Liens otherwise permitted by this Section 6.15, Liens
on assets of the Borrower and its Subsidiaries securing obligations
not exceeding $20,000,000 in the aggregate at any time outstanding.
6.16 Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate (other than the Borrower or a Wholly-Owned Subsidiary
with respect to transactions other than the sale, transfer or other disposition
of assets) except in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
47
6.17 Amendments. The Borrower will not, and will not permit any Subsidiary
to make any amendment, waiver, cancellation, termination or modification to the
Trademark Subsidiary Promissory Note except with the consent of the Agent which
consent shall not be unreasonably withheld. The parties agree that the Agent
shall consent to amendments to the Trademark Subsidiary Promissory Note, on one
or more occasions, to provide for inclusion in the definition of "Senior Debt"
in the Trademark Subsidiary Promissory Note other indebtedness which the
Borrower is allowed to incur under Section 6.11 hereof and which the Borrower
elects to designate as "Senior Debt" solely for purposes of the Trademark
Subsidiary Promissory Note and to make conforming changes in the Trademark
Subsidiary Promissory Note as is reasonably necessary to implement the inclusion
of other obligations of the Borrower in the definition of "Senior Debt". The
form of any such amendment shall be reasonably satisfactory to the Agent.
6.18 Rate Hedging Obligations. The Borrower will not, and will not permit
any Subsidiary to, enter into or remain liable upon any Rate Hedging
Obligations, except for Rate Hedging Obligations in a notional amount not to
exceed $100,000,000.
6.19 Financial Covenants. On and subsequent to the date hereof, the
Borrower shall maintain, for itself and its Subsidiaries on a consolidated
basis, each of the following financial covenants, each calculated in accordance
with Agreement Accounting Principles.
6.19.1. Funded Debt to Capital Ratio. The Borrower shall maintain, on
a consolidated basis, as of the end of each fiscal quarter a ratio of
Funded Debt to Capital not exceeding .60 to 1.0.
6.19.2. Fixed Charge Coverage Ratio. The Borrower shall maintain, on
a consolidated basis, as of the end of each fiscal quarter a Fixed Charge
Coverage Ratio greater than 1.75 to 1.0.
6.19.3. Tangible Net Worth. The Borrower shall maintain, on a
consolidated basis, at all times a Tangible Net Worth that is greater than
or equal to the sum of (i) $565,000,000 plus (ii) 50% of the Borrower's
quarterly Net Income, if positive, for each fiscal quarter ending after
February 2, 2002 plus (iii) 50% of the aggregate net proceeds of any equity
offering received by the Borrower after the date hereof.
6.20 Subsidiary Guaranties. If the Subsidiaries (other than the Real
Estate Subsidiaries, the Trademark Subsidiary, the Investment Subsidiary and the
Business Trust) have assets which in the aggregate have a book value equal to or
greater than twenty-five percent (25%) of an amount equal to (i) the book value
of the Borrower's total consolidated assets and less (ii) the book value of real
estate owned by the Real Estate Subsidiaries, each determined on a consolidated
basis as at the end of any fiscal quarter, the Borrower shall cause all
Subsidiaries other than the Real Estate Subsidiaries to deliver to the Agent, on
behalf of the Lenders and the LC Issuer, within thirty (30) days after the end
of any such fiscal quarter (i) an executed guaranty in substantially the form
attached hereto as Exhibit D or a joinder agreement in substantially the form
attached to such guaranty and (ii) an opinion of counsel to such Subsidiaries
that such guaranty has been duly executed and delivered and is a legal, valid
and binding obligation of such Subsidiaries enforceable in accordance with its
terms (subject to customary exceptions). If
48
any Subsidiary (other than a Real Estate Subsidiary) has assets which in the
aggregate have a book value equal to or greater than fifteen percent (15%) of an
amount equal to (i) the book value of the Borrower's total consolidated assets
and less (ii) the book value of real estate owned by the Real Estate
Subsidiaries, each determined on a consolidated basis as at the end of any
fiscal quarter, the Borrower shall cause such Subsidiary to deliver to the
Agent, on behalf of the Lenders and the LC Issuer, within thirty (30) days after
the end of any such fiscal quarter (i) an executed guaranty substantially in the
form attached hereto as Exhibit D or a joinder agreement substantially in the
form attached to such guaranty and (ii) an opinion of counsel to such Subsidiary
that such guaranty has been duly executed and delivered and is a legal, valid
and binding obligation of such Subsidiary enforceable in accordance with its
terms (subject to customary exceptions).
6.21 Intercompany Indebtedness. After the occurrence and during the
continuance of a Default or an Unmatured Default, the Borrower will not prepay,
defease or in substance defease, purchase, redeem, retire or otherwise acquire,
any Indebtedness owed to any Subsidiary.
6.22 Letters of Credit. The Borrower will not, nor will it permit any
Subsidiary to, apply for or become liable upon any Letter of Credit, except for:
(i) Facility LCs; (ii) other standby Letters of Credit, provided that the
aggregate amount of issued but undrawn standby Letters of Credit (which are not
Facility LCs) and all unreimbursed drawings thereunder shall not at any time
exceed $50,000,000; and (iii) commercial Letters of Credit utilized in the
ordinary course of business to purchase inventory, provided that the aggregate
amount of issued but undrawn commercial Letters of Credit shall not at any time
exceed ten percent (10%) of the value of the Borrower's consolidated merchandise
inventory.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Agent under or in
connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2 Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one (1) Business Day after the same becomes due,
or nonpayment of interest upon any Loan or of any facility fee, usage fee, LC
Fee or other obligations under any of the Loan Documents within five (5)
Business Days after the same becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of Article
VI Section 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19,
6.20, 6.21 or 6.22.
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7.4 The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within twenty (20) days after
written notice from the Agent or any Lender.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when due any
Indebtedness with a principal amount in excess of $10,000,000 ("Material
Indebtedness"); or the default by the Borrower or any of its Subsidiaries in the
performance of any material term, provision or condition contained in any
agreement under which any such Material Indebtedness was created or is governed,
or any other material event shall occur or material condition exist, the effect
of which default or event is to cause, or to permit the holder or holders of
such Material Indebtedness to cause, such Material Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of the Borrower or
any of its Subsidiaries shall be declared to be due and payable or required to
be prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or any of its Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.
7.6 The Borrower or any of its Active Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7 Without the application, approval or consent of the Borrower or any of
its Active Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Active Subsidiaries
or any Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Active
Subsidiaries and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty (60) consecutive days.
7.8 Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.
7.9 The Borrower or any of its Subsidiaries shall fail within thirty (30)
days to pay, bond or otherwise discharge one or more (i) judgments or orders for
the payment of money in
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excess of $10,000,000 (or the equivalent thereof in currencies other than U.S.
Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgment(s), in any such case, is/are not stayed
on appeal or otherwise being appropriately contested in good faith.
7.10 The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $5,000,000 or any Reportable Event shall occur in connection with
any Plan.
7.11 Any Change in Control shall occur.
7.12 The Subsidiary Guaranty shall fail to remain in full force or effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Subsidiary Guaranty, or any Guarantor shall fail to
comply with any of the terms or provisions of the Subsidiary Guaranty or any
Guarantor shall deny that it has further liability under the Subsidiary
Guaranty, or shall give notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration; Facility LC Collateral Account.
(i) If any Default described in Section 7.6 or 7.7 occurs with respect to
the Borrower, the obligations of the Lenders to make Loans hereunder
and the obligation and power of the LC Issuer to issue Facility LCs
shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of
the Agent, the LC Issuer or any Lender and the Borrower will be and
become thereby unconditionally obligated, without any further notice,
act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral
Account, equal to the difference of (x) the amount of LC Obligations
at such time, less (y) the amount on deposit in the Facility LC
Collateral Account at such time which is free and clear of all rights
and claims of third parties and has not been applied against the
Obligations (such difference, the "Collateral Shortfall Amount"). If
any other Default occurs, the Required Lenders (or the Agent with the
consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation
and power of the LC Issuer to issue Facility LCs, or declare the
Obligations to be due and payable, or both, whereupon the Obligations
shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Borrower hereby
expressly waives, and (b) upon notice to the Borrower and in addition
to the continuing right to demand payment of all amounts payable under
this Agreement, make demand on the Borrower to pay, and the Borrower
will, forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount, which funds
shall be deposited in the Facility LC Collateral Account.
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(ii) If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the
Borrower will, forthwith upon such demand and without any further
notice or act, pay to the Agent the Collateral Shortfall Amount,
which funds shall be deposited in the Facility LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to
the payment of the Obligations and any other amounts as shall from
time to time have become due and payable by the Borrower to the
Lenders or the LC Issuer under the Loan Documents.
(iv) At any time while any Default is continuing, neither the Borrower nor
any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC
Collateral Account. After all of the Obligations have been
indefeasibly paid in full and the Aggregate Commitment has been
terminated, any funds remaining in the Facility LC Collateral Account
shall be returned by the Agent to the Borrower or paid to whomever
may be legally entitled thereto at such time. At such time as no
Default is continuing and the Aggregate Commitment has not been
terminated, any funds remaining in the Facility LC Collateral Account
shall be returned by the Agent to the Borrower.
(v) If, within thirty (30) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make
Loans and the obligation and power of the LC Issuer to issue Facility
LCs hereunder as a result of any Default (other than any Default as
described in Section 7.6 or 7.7 with respect to the Borrower) and
before any judgment or decree for the payment of the Obligations due
shall have been obtained or entered, the Required Lenders (in their
sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry date of
any Facility LC to a date after the Facility Termination Date or
forgive all or any portion of the principal amount thereof or any
Reimbursement Obligation related thereto, or reduce the rate or
extend the time of payment of interest or fees thereon or
Reimbursement Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
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(iii) Extend the Facility Termination Date, or reduce the amount or extend
the payment date for, the mandatory payments required under Section
2.2, or except as contemplated by Section 2.6(d), increase the amount
of the Aggregate Commitment or the Commitment of any Lender hereunder
or the commitment to issue Facility LCs, or permit the Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor from its obligations under the Subsidiary
Guaranty.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. No amendment of any provision of this Agreement
relating to the Swing Line Lender or any Swing Line Loans shall be effective
without the written consent of the Swing Line Lender. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this Agreement. Notwithstanding the foregoing, upon the
execution and delivery of all documentation required by Section 2.6(d) to be
delivered in connection with an increase to the Aggregate Commitment, the Agent,
the Borrower and the new or existing Lenders whose Commitments have been
affected may and shall enter into an amendment hereof (which shall be binding on
all parties hereto and the new Lenders) solely for the purpose of reflecting any
new Lenders and their new Commitments and any increase in the Commitment of any
existing Lender.
8.3 Preservation of Rights. No delay or omission of the Lenders, the LC
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
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9.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent,
the LC Issuer and the Lenders relating to the subject matter thereof other than
the fee letter described in Section 10.13.
9.5 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6 Expenses; Indemnification. (i) The Borrower shall reimburse the Agent
and the Arranger for any reasonable costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent) paid or incurred by the Agent or
the Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, distribution (including, without limitation, via the
internet), review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Agent, the Arranger, the LC
Issuer and the Lenders for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may
be employees of the Agent, the Arranger, the LC Issuer or the Lenders) paid or
incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer and each Lender, their respective affiliates, and each
of their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, the LC Issuer or any Lender or any
affiliate is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Credit Extension hereunder except to
54
the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.
9.7 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to the LC Issuer and each of the Lenders.
9.8 Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.9 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be
solely that of borrower and lender. Neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have any fiduciary responsibilities to the Borrower.
Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations. The Borrower
agrees that neither the Agent, the Arranger, the LC Issuer nor any Lender shall
have liability to the Borrower (whether sounding in tort, contract or otherwise)
for losses suffered by the Borrower in connection with, arising out of, or in
any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to xxx for, any special, indirect, consequential or punitive damages
suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
9.11 Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower or any Subsidiary pursuant to
this Agreement in confidence, except for disclosure (i) to its Affiliates and to
other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (v) to any Person in connection
with any legal proceeding to which such Lender is a party, (vi) to such Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties,
(vii) permitted by Section 12.4, and (viii) rating agencies if requested or
required
55
by such agencies in connection with a rating relating to the Advances hereunder.
Each Lender will instruct each Person to which it transmits confidential
information hereunder to abide by the provisions of this Section.
9.12 Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.13 Disclosure. The Borrower and each Lender hereby acknowledge and agree
that Bank One and/or its Affiliates from time to time may hold investments in,
make other loans to or have other relationships with the Borrower and its
Affiliates.
ARTICLE X
THE AGENT
10.1 Appointment; Nature of Relationship. Bank One, NA is hereby appointed
by each of the Lenders as its contractual representative (herein referred to as
the "Agent") hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 1-201 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
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10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to
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such termination) (i) for any amounts not reimbursed by the Borrower for which
the Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted against the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders), or the enforcement of any of the terms of the Loan
Documents or of any such other documents, provided that (i) no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Agent and (ii)
any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding
the provisions of this Section 10.8, be paid by the relevant Lender in
accordance with the provisions thereof. The obligations of the Lenders under
this Section 10.8 shall survive payment of the Obligations and termination of
this Agreement.
10.9 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
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10.12 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five (45) days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty (30) days
after the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13 Agent and Arranger Fees. The Borrower agrees to pay to the Agent and
the Arranger, for their respective accounts, the fees agreed to by the Borrower,
the Agent and the Arranger pursuant to that certain fee letter agreement dated
April 25, 2002, or as otherwise agreed from time to time.
10.14 Delegation to Affiliates. The Borrower and the Lenders agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15 Co-Agents, Documentation Agent, Syndication Agent, etc. Neither any
of the Lenders identified in this Agreement as a "co-agent" nor the
Documentation Agent or the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the
59
foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same acknowledgments
with respect to such Lenders as it makes with respect to the Agent in Section
10.11.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns, except that (i) the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents
and (ii) any assignment by any Lender must be made in compliance with Section
12.3. The parties to this Agreement acknowledge that clause (ii) of this Section
12.1 relates only to absolute assignments and does not prohibit assignments
creating security interests, including, without limitation, (x) any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender
which is a fund, any pledge or assignment of all or any portion of its rights
under this Agreement and any Note to its trustee in support of its obligations
to its trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 12.3. The Agent may treat the Person which made any Loan or which
holds any Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 12.3; provided, however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Loan or which holds any Note to direct payments relating
to such Loan or Note to another Person. Any assignee of the rights to any Loan
or any Note agrees by acceptance of such assignment to be
61
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.
12.2 Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Outstanding Credit Exposure of such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the owner of its Outstanding Credit Exposure and
the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not
sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest
which would require consent of all of the Lenders pursuant to the
terms of Section 8.2 or of any other Loan Document.
12.2.3 Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1
in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as
if each Participant were a Lender.
12.3 Assignments.
Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to
one or more
62
banks or other entities ("Purchasers") all or any part of its rights
and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit B or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower and the
Agent and the LC Issuer shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof; provided, however, that if a Default has
occurred and is continuing, the consent of the Borrower shall not be
required. Such consent shall not be unreasonably withheld or delayed.
Each such assignment with respect to a Purchaser which is not a Lender
or an Affiliate thereof shall (unless each of the Borrower and the
Agent otherwise consents) be in an amount not less than the lesser of
(i) $5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2 Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Section 12.3.1, and
(ii) payment of a $3,500 fee to the Agent for processing such
assignment (unless such fee is waived by the Agent), such assignment
shall become effective on the effective date specified in such
assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Outstanding Credit Exposure under
the applicable assignment agreement constitutes "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by or on behalf of the Lenders and shall
have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto,
and no further consent or action by the Borrower, the Lenders or the
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Outstanding Credit
Exposure assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
12.4 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.
63
12.5 Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1 Notices. Except as otherwise permitted by Section 2.15 with respect to
all borrowing or Facility LC notices, all notices, requests and other
communications to any party hereunder shall be in writing (including electronic
transmission, facsimile transmission or similar writing) and shall be given to
such party: (x) in the case of the Borrower or the Agent, at its address or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Lender, at its address or facsimile number set forth below its signature hereto
or (z) in the case of any party, at such other address or facsimile number as
such party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received (so long as received during
normal business hours, if not, then the next Business Day), (ii) if given by
mail, 96 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission, received) at
the address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
13.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE
64
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER,
THE AGENT AND EACH LENDER HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE
LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
[SIGNATURE PAGES FOLLOW]
65
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
BJ'S WHOLESALE CLUB, INC.
By: /s/ Xxxxx Forward
----------------------------------------
Print Name: Xxxxx Forward
--------------------------------
Title: Executive Vice President
-------------------------------------
Address: Xxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Forward
Executive Vice President and
Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
66
Bank One, NA (Main Office Chicago)
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
--------------------------------
Print Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Director
Address: 1 Bank Xxx Xxxxx
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attn: Xxxx X. Xxxxxx
---------------------
Telephone: (000) 000-0000
---------------------
Telecopy: (000) 000-0000
---------------------
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
FLEET NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxxxxx
Vice President
Address: 000 Xxxxxxx Xxxxxx
---------------------------
Xxxxxx XX 00000
---------------------------
Attn: Xxxxxxx Xxxxxxxxxxxx
---------------------
Telephone: (000) 000-0000
---------------------
Telecopy: (000) 000-0000
---------------------
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
CITIZENS BANK
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Print Name: Xxxxxxx X. Xxxxx
Title: Vice President
Address: 00 Xxxxx Xx
Xxxxxx, XX 00000
Attn: X.X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
SunTrust Bank
By: /s/ Xxxxx Xxxxx
---------------------------------
Print Name: Xxxxx Xxxxx
-------------------------
Title: Managing Director
-----------------------------
Address: 000 Xxxxx Xxx.
---------------------
Xxx Xxxx, XX 00000
---------------------
Attn: Xxxxx Xxxxxxxxx
----------------
Telephone: (000) 000-0000
-------------
Telecopy: (000) 000-0000
-------------
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
Wachovia Bank, N.A.
By: /s/ Xxxx Xxx
--------------------------------
Print Name: Xxxx Xxx
Title: Assistant Vice President
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: ______________
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
The Bank of New York
--------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Print Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Address: 0 Xxxx Xxxxxx - 0xx xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to Credit Agreement
for BJ's Wholesale Club, Inc.
FIFTH THIRD BANK
-----------------------------------------------
By: /s/ Xxxxxxxxx X. Xxxxxx
--------------------------------
Print Name: Xxxxxxxxx X. Xxxxxx
------------------------
Title: Assistant Vice President
-----------------------------
Address: 00 Xxxxxxxx Xxxxxx MD
---------------------------
109054
---------------------------
Xxxxxxxxxx XX 00000
---------------------------
Attn: Xxxxxxxxx X. Xxxxxx
---------------------
Telephone: (000) 000-0000
---------------------
Telecopy: (000) 000-0000
---------------------
Signature Page to Credit Agreement
U. S. Bank National Association
-------------------------------
By: /s/ Xxxxxx X. Xxxxx
------------------------
Print Name: Xxxxxx X. Xxxxx
Title: Vice President
Address: XX-XX-12MP
Xxx X. X. Xxxx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Xxx Xxxxx
Telephone: (000)000-0000
Telecopy: (000)000-0000
PRICING SCHEDULE
==============================================================================================================
Applicable Level I Level II Level III Level IV Level V
Margin Status Status Status Status Status
--------------------------------------------------------------------------------------------------------------
Eurodollar Rate .45% .50% .575% .675% .875%
--------------------------------------------------------------------------------------------------------------
ABR 0% 0% 0% 0% 0%
==============================================================================================================
===============================================================================================================
Applicable Fee Level I Level II Level III Level IV Level V
Rate Status Status Status Status Status
===============================================================================================================
Standby Letter of .45% .50% .575% .675% .875%
Credit Fee
---------------------------------------------------------------------------------------------------------------
Commercial Letter of .225% .25% .2875% .3375% .4375%
Credit Fee
---------------------------------------------------------------------------------------------------------------
Facility Fee .125% .150% .175% .20% .25%%
---------------------------------------------------------------------------------------------------------------
Usage Fee .05% .10% .125% .125% .125%
===============================================================================================================
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to the Credit Agreement.
"Level I Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, the
Fixed Charge Coverage Ratio is greater than 3.50 to 1.00.
"Level II Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status and (ii) the Fixed Charge
Coverage Ratio is greater than or equal to 3.00 to 1.00.
"Level III Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status or Level II Status and (ii)
the Fixed Charge Coverage Ratio is greater than or equal to 2.50 to 1.00.
"Level IV Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status, Level II or Level III Status
and (ii) the Fixed Charge Coverage Ratio is greater than or equal to 2.00 to
1.00.
"Level V Status" exists at any date if the Borrower has not qualified
for Level I Status, Level II Status, Level III Status or Level IV Status
"Status" means Level I Status, Level II Status, Level III Status, Level
IV Status or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials; provided, that on the Closing Date and until
adjusted as described below, the Borrower will be deemed to be Level III Status,
unless the Borrower's Status is determined to be a higher Status as determined
from the Financials delivered prior to the Closing Date. Adjustments, if any, to
the Applicable Margin or Applicable Fee Rate shall be effective five (5)
business days after the Agent has received the applicable Financials. If the
Borrower fails to deliver the Financials to the Agent at the time required
pursuant to the Credit Agreement, then the Applicable Margin and Applicable Fee
Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in
the foregoing table until five (5) business days after such Financials are so
delivered.
2
SCHEDULE 1
COMMITMENTS
----------------------------------------------------------------------------------------------------
Lender Commitment
----------------------------------------------------------------------------------------------------
Bank One, NA $45,000,000
----------------------------------------------------------------------------------------------------
Fleet National Bank $40,000,000
----------------------------------------------------------------------------------------------------
Citizens Bank $25,000,000
----------------------------------------------------------------------------------------------------
SunTrust Bank $25,000,000
----------------------------------------------------------------------------------------------------
Wachovia Bank, National Association $25,000,000
----------------------------------------------------------------------------------------------------
Bank of New York $15,000,000
----------------------------------------------------------------------------------------------------
Fifth Third Bank $15,000,000
----------------------------------------------------------------------------------------------------
US Bank $10,000,000
-----------
----------------------------------------------------------------------------------------------------
Total $200,000,000
----------------------------------------------------------------------------------------------------
3
SCHEDULE 2.20.13
OUTSTANDING LETTERS OF CREDIT
-----------------------------------------------------------------------------------------------
LC Number Amount Beneficiary Expiration Date
--------- ------ ----------- ---------------
-----------------------------------------------------------------------------------------------
1069 NEMM 50087451 $2,256,300.00 Continental Casualty June 30, 2002
Company and/or
Transportation Insurance
Company
-----------------------------------------------------------------------------------------------
4
