EXHIBIT 10.1
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
XXXXXXXX-SONOMA, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as administrative agent and L/C Issuer,
FLEET NATIONAL BANK,
THE BANK OF NEW YORK,
as co-syndication agents,
XXXXX FARGO BANK, N.A.,
JPMORGAN CHASE BANK,
as co-documentation agents,
and
the Lenders party hereto
dated as of
October 22, 2002
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BANC OF AMERICA SECURITIES LLC
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 1 Definitions...............................................................1
Section 1.1 Definitions.......................................................1
Section 1.2 Other Interpretive Provisions....................................19
Section 1.3 Accounting Terms and Determinations..............................20
Section 1.4 Time of Day......................................................20
Section 1.5 Letter of Credit Amounts.........................................20
ARTICLE 2 Credit Facility..........................................................21
Section 2.1 Commitments......................................................21
Section 2.2 Notes............................................................22
Section 2.3 Repayment of Loan................................................22
Section 2.4 Use of Proceeds..................................................22
Section 2.5 Termination or Reduction of Commitments..........................22
Section 2.6 Increase of Commitments..........................................22
ARTICLE 3 Letters of Credit........................................................23
Section 3.1 The Letter of Credit Commitment..................................23
Section 3.2 Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.................................25
Section 3.3 Drawings and Reimbursements; Funding of Participations...........26
Section 3.4 Repayment of Participations......................................27
Section 3.5 Obligations Absolute.............................................28
Section 3.6 Role of L/C Issuer...............................................29
Section 3.7 Cash Collateral..................................................29
Section 3.8 Applicability of ISP98...........................................30
Section 3.9 Letter of Credit Fees............................................30
Section 3.10 Fronting Fee and Documentary and Processing Charges Payable
to L/C Issuer....................................................30
Section 3.11 Conflict with Letter of Credit Application.......................31
ARTICLE 4 Interest and Fees........................................................31
Section 4.1 Interest Rate....................................................31
Section 4.2 Determinations of Margins and Commitment Fee Rate................31
Section 4.3 Payment Dates....................................................32
Section 4.4 Default Interest.................................................32
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Section 4.5 Conversions and Continuations of Balances........................32
Section 4.6 Commitment Fee...................................................33
Section 4.7 Administrative Fee...............................................33
Section 4.8 Computations.....................................................33
ARTICLE 5 Administrative Matters...................................................33
Section 5.1 Borrowing Procedure..............................................33
Section 5.2 Minimum Amounts..................................................34
Section 5.3 Certain Notices..................................................34
Section 5.4 Prepayments......................................................35
Section 5.5 Method of Payment................................................36
Section 5.6 Pro Rata Treatment...............................................37
Section 5.7 Sharing of Payments..............................................37
Section 5.8 Non-Receipt of Funds by the Agent................................38
ARTICLE 6 Change in Circumstances..................................................39
Section 6.1 Increased Cost and Reduced Return................................39
Section 6.2 Limitation on Libor Balances and IBOR Balances...................40
Section 6.3 Illegality.......................................................41
Section 6.4 Treatment of Affected Balances...................................41
Section 6.5 Compensation.....................................................42
Section 6.6 Taxes............................................................42
ARTICLE 7 Guaranties...............................................................43
Section 7.1 Guaranties.......................................................43
Section 7.2 New Guarantors...................................................44
ARTICLE 8 Conditions Precedent.....................................................44
Section 8.1 Conditions to Effectiveness......................................44
Section 8.2 All Advances.....................................................46
ARTICLE 9 Representations and Warranties...........................................47
Section 9.1 Existence, Power and Authority...................................47
Section 9.2 Financial Condition..............................................47
Section 9.3 Corporate and Similar Action; No Breach..........................48
Section 9.4 Operation of Business............................................48
Section 9.5 Litigation and Judgments.........................................48
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 9.6 Rights in Properties; Liens......................................48
Section 9.7 Enforceability...................................................48
Section 9.8 Approvals........................................................49
Section 9.9 Debt.............................................................49
Section 9.10 Taxes............................................................49
Section 9.11 Margin Securities................................................49
Section 9.12 ERISA............................................................49
Section 9.13 Disclosure.......................................................49
Section 9.14 Subsidiaries; Capitalization.....................................50
Section 9.15 Material Agreements..............................................50
Section 9.16 Compliance with Laws.............................................50
Section 9.17 Investment Company Act...........................................50
Section 9.18 Public Utility Holding Company Act...............................50
Section 9.19 Environmental Matters............................................51
Section 9.20 Broker's Fees....................................................52
Section 9.21 Employee Matters.................................................52
Section 9.22 Solvency.........................................................52
ARTICLE 10 Affirmative Covenants....................................................52
Section 10.1 Reporting Requirements...........................................52
Section 10.2 Maintenance of Existence; Conduct of Business....................55
Section 10.3 Maintenance of Properties........................................55
Section 10.4 Taxes and Claims.................................................55
Section 10.5 Insurance........................................................55
Section 10.6 Inspection Rights................................................56
Section 10.7 Keeping Books and Records........................................56
Section 10.8 Compliance with Laws.............................................56
Section 10.9 Compliance with Agreements.......................................56
Section 10.10 Further Assurances...............................................56
Section 10.11 ERISA............................................................57
ARTICLE 11 Negative Covenants.......................................................57
Section 11.1 Debt.............................................................57
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries.............58
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(CONTINUED)
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Section 11.3 Mergers, Etc.....................................................60
Section 11.4 Restricted Payments..............................................60
Section 11.5 Investments......................................................61
Section 11.6 Limitation on Issuance of Capital Stock of Subsidiaries..........62
Section 11.7 Transactions with Affiliates.....................................62
Section 11.8 Disposition of Assets............................................62
Section 11.9 Lines of Business................................................62
Section 11.10 Limitations on Restrictions Affecting the Borrower and its
Subsidiaries.....................................................63
Section 11.11 Environmental Protection.........................................63
Section 11.12 ERISA............................................................63
ARTICLE 12 Financial Covenants......................................................64
Section 12.1 Leverage Ratio...................................................64
Section 12.2 Fixed Charge Coverage Ratio......................................64
Section 12.3 Minimum Tangible Net Worth.......................................64
Section 12.4 Capital Expenditures.............................................64
ARTICLE 13 Default..................................................................64
Section 13.1 Events of Default................................................64
Section 13.2 Remedies.........................................................67
Section 13.3 Performance by the Agent.........................................68
Section 13.4 Set-off..........................................................68
Section 13.5 Continuance of Default...........................................68
ARTICLE 14 The Agent................................................................68
Section 14.1 Appointment and Authorization of the Agent.......................68
Section 14.2 Delegation of Duties.............................................69
Section 14.3 Liability of the Agent...........................................69
Section 14.4 Reliance by the Agent............................................69
Section 14.5 Notice of Default................................................70
Section 14.6 Credit Decision; Disclosure of Information by the Agent..........70
Section 14.7 Indemnification of the Agent.....................................71
Section 14.8 The Agent in Individual Capacity.................................71
Section 14.9 Resignation of the Agent.........................................72
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 14.10 Agent May File Proofs of Claim...................................72
Section 14.11 Guaranty Matters.................................................73
Section 14.12 Co-Agents; Lead Managers.........................................73
ARTICLE 15 Miscellaneous............................................................73
Section 15.1 Attorney Costs, Expenses and Taxes...............................73
Section 15.2 Indemnification by the Borrower..................................74
Section 15.3 Limitation of Liability..........................................74
Section 15.4 No Duty..........................................................75
Section 15.5 No Fiduciary Relationship........................................75
Section 15.6 Equitable Relief.................................................75
Section 15.7 No Waiver; Cumulative Remedies...................................75
Section 15.8 Successors and Assigns...........................................75
Section 15.9 Survival.........................................................78
Section 15.10 Entire Agreement.................................................79
Section 15.11 Amendments and Waivers...........................................79
Section 15.12 Maximum Interest Rate............................................80
Section 15.13 Notices and Other Communications; Facsimile Copies...............80
Section 15.14 Governing Law; Venue; Service of Process.........................81
Section 15.15 Counterparts.....................................................82
Section 15.16 Severability.....................................................82
Section 15.17 Headings.........................................................82
Section 15.18 Construction.....................................................82
Section 15.19 Independence of Covenants........................................82
Section 15.20 Waiver of Jury Trial.............................................82
Section 15.21 Confidentiality..................................................83
Section 15.22 Foreign Lenders..................................................83
Section 15.23 Amendment and Restatement........................................84
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INDEX TO EXHIBITS
EXHIBIT A Form of Revolving Note
EXHIBIT B Form of Swingline Note
EXHIBIT C Form of Assignment and Acceptance
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Subsidiary Guaranty
EXHIBIT F Form of Notice of Borrowings, Conversions, Continuations
or Prepayments
EXHIBIT G Form of Joinder Agreement
EXHIBIT H Form of Acknowledgment of Intercreditor Agreement
INDEX TO SCHEDULES
Schedule 1 Existing Letters of Credit
Schedule 9.4 Operation of Business
Schedule 9.5 Litigation and Judgments
Schedule 9.9 Debt
Schedule 9.10 Taxes
Schedule 9.12 ERISA Matters
Schedule 9.14 Subsidiaries; Capitalization
Schedule 9.15 Material Agreements
Schedule 9.19 Environmental Matters
Schedule 9.20 Broker's Fees
Schedule 9.21 Employee Matters
Schedule 11.2 Permitted Liens
Schedule 11.5 Investments
Schedule 15.13 Addresses for Notices
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"),
dated as of October 22, 2002, is among XXXXXXXX-SONOMA, INC., a corporation duly
organized and validly existing under the laws of the State of California (the
"Borrower"), each of the banks or other lending institutions which is (or which
may from time to time become) a party hereto or any successor or assignee
thereof pursuant to Section 15.8(b) (individually, a "Lender" and, collectively,
the "Lenders"), and BANK OF AMERICA, N.A., a national banking association, as
administrative agent for the Lenders (in its capacity as administrative agent,
together with its successors in such capacity, the "Agent") and as L/C Issuer.
R E C I T A L S:
A. The Borrower has requested that the Lenders extend a $200,000,000
unsecured credit facility to the Borrower in the form of a revolving credit
facility to refinance existing debt of the Borrower, finance capital
expenditures, provide working capital to the Borrower and its Subsidiaries and
for other general corporate purposes.
B. The Lenders are willing to extend such credit to the Borrower upon
the terms and conditions set forth in this Agreement and the other Loan
Documents.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Wherever used in this Agreement, the following
terms have the following meanings:
"Acknowledgment of Intercreditor Agreement" means an agreement, in
substantially the form of Exhibit H, entered into by a Lender pursuant to
Section 8.1(a)(vii) or an Eligible Assignee pursuant to Section 15.8(b).
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Agent.
"Affected Balances" has the meaning specified in Section 6.4.
"Affected Libor/IBOR Balances" has the meaning specified in Section 6.5.
"Affiliate" means, with respect to any Person, any other Person: (a)
that directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10.0%) or more of any
class of Capital Stock of such Person; or (c) ten percent (10.0%) or more of the
Capital Stock of which is directly or indirectly beneficially owned or held by
the Person in
question. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause direction of the
management and policies of a Person, whether through the ownership of Capital
Stock, by contract or otherwise; provided, however, in no event shall the Agent
or any Lender be deemed an Affiliate of the Borrower or any Subsidiary of the
Borrower.
"Agent" has the meaning specified in the introductory paragraph of this
Agreement.
"Agent-Related Persons" means the Agent (including any successor
administrative agent), each of the Agent's Affiliates (including, in the case of
Bank of America in its capacity as the Agent, the Arranger) and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agreement" has the meaning specified in the introductory paragraph of
this Agreement, as the same may be amended, restated or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Balance, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Balance in such Lender's Administrative
Questionnaire (or, with respect to a Lender that becomes a party to this
Agreement pursuant to an assignment made in accordance with Section 15.8(b), in
the Assignment and Acceptance executed by it) or such other office of such
Lender (or an Affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which advances of such Type of Balance are to be
made and maintained.
"Applicable Rate" has the meaning specified in Section 4.1.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Asset Disposition" means, with respect to any Person, the disposition,
whether a sale (including any sale/lease-back arrangement), lease, assignment,
transfer or other voluntary disposition of any asset of such Person (including
the sale or other disposition of any Capital Stock of any Subsidiary of such
Person, but excluding any transaction among any of the Borrower and any
Guarantor or any Subsidiary that concurrently therewith becomes a Guarantor)
other than (a) sales of inventory in the ordinary course of business, (b) asset
dispositions which constitute an Investment permitted by Section 11.5, (c)
Permitted Sale-Leasebacks and (d) sales of equipment that is obsolete or no
longer useful in the business of such Person for an aggregate amount not in
excess of $10,000,000 in any Fiscal Year.
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit C, entered into by a Lender and an Eligible
Assignee pursuant to Section 15.8(b) and accepted by the Borrower (if required)
and the Agent.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal legal services and all disbursements of internal counsel.
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"Balance" means any of the Base Rate Balance, a Libor Balance or an IBOR
Balance.
"Bank of America" means Bank of America, N.A. and its successors and
assigns.
"Bankruptcy Code" has the meaning specified in Section 13.1(e).
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus one-half of one percent (0.50%) and
(b) the rate of interest in effect for such day as publicly announced from time
to time by Bank of America as its "prime rate." Such rate is a rate set by Bank
of America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Balance" means the portion of the Loan that bears interest at
a rate based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 4.2.
"Borrower" has the meaning specified in the introductory paragraph of
this Agreement.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the laws of, or are in
fact closed in, the state of Washington and, if such day relates to any Libor
Balance or IBOR Balance, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the offshore Dollar interbank market.
"Capital Expenditures" means, for any period, all expenditures of the
Borrower and its Subsidiaries which are classified as capital expenditures in
accordance with GAAP, including the aggregate amount of all such expenditures
incurred during such period which constitute Capital Lease Obligations.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations are
classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares,
partnership interests, limited liability company interests, membership
interests, equity interests, participations, rights, securities (excluding debt
securities) or other equivalent evidences (however designated) of ownership or
any options, warrants, voting trust certificates or other instruments evidencing
an ownership interest or a right to acquire an ownership interest in a Person
(however designated) issued by any entity (whether a corporation, partnership,
limited liability company or other type of entity).
3
"Cash Collateralize" has the meaning specified in Section 3.7.
"Change of Control" means, with respect to any Person, an event or
series of events by which: (a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such Person or its Subsidiaries, or any
Person acting in its capacity as trustee, agent or other fiduciary, or
administrator of any such plan) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of fifty
percent (50.0%) or more of the membership interests of such Person; or (b)
during any period of twelve (12) consecutive months, a majority of the members
of the board of directors or other equivalent governing body of such Person
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) preceding constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clause (i) and clause
(ii) preceding constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body.
"Closing Date" has the meaning specified in Section 8.1.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, the obligation of such Lender to
(a) make advances of funds pursuant to Section 2.1 and (b) purchase
participations in L/C Obligations in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount set forth opposite the name
of such Lender on the signature pages hereto (or if applicable, the most recent
Assignment and Acceptance executed by such Lender) under the heading
"Commitment," as the same may be reduced or terminated pursuant to Section 2.5
or Section 13.2. The aggregate amount of the Commitments as of the Closing Date
equals two hundred million Dollars ($200,000,000).
"Commitment Fee Rate" has the meaning specified in Section 4.2.
"Commitment Percentage" means, with respect to each Lender, the
percentage equivalent (carried to nine (9) decimal places) of a fraction, the
numerator of which is the aggregate amount of the Commitment of such Lender (or
if such Commitment has terminated or expired, the outstanding principal amount
of the Revolving Loan of such Lender with respect thereto) and the denominator
of which is the aggregate amount of the Commitments of all of the Lenders (or if
such Commitments have terminated or expired, the outstanding principal amount of
the Revolving Loans of all of the Lenders with respect thereto).
"Compliance Certificate" means a certificate in substantially the form
of Exhibit D, properly completed and executed by the chief financial officer or
Vice President, Finance of the Borrower.
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"Continue," "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 4.5, from one Interest Period to the next
Interest Period, of a Libor Balance as a Libor Balance or of an IBOR Balance as
an IBOR Balance.
"Convert," "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 4.5 or Article 6 of (a) Balances of one Type under the
Revolving Loan into Balances of the other Type under the Revolving Loan and (b)
Balances of one Type under the Swingline Advances into Balances of the other
Type under the Swingline Advances.
"Debt" means, with respect to any Person at any time (without
duplication): (a) all obligations of such Person for borrowed money; (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments; (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than ninety (90) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP; (d) all Capital Lease Obligations of such
Person; (e) Guarantees by such Person of indebtedness, liabilities or
obligations of the kinds described in clauses (a), (b), (c), (d), (f), (g), (h),
(i), (j), (k) and (l) of this definition; (f) all indebtedness, liabilities and
obligations of the types described in the foregoing clauses (a) through (e)
secured by a Lien existing on Property owned by such Person, whether or not the
indebtedness, liabilities and obligations secured thereby have been assumed by
such Person or are non-recourse to such Person; provided, however, that the
amount of such Debt of any Person described in this clause (f) shall, for
purposes of this Agreement, be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Debt or (ii) the fair market value of the
Property encumbered, as determined by the Agent in its discretion; (g) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds and
similar instruments; (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); (i) all vested obligations
of such Person for the payment of money under any earn-out, noncompete,
consulting or similar arrangements providing for the deferred payment of the
purchase price for any property to the extent that any such obligations are,
according to GAAP, reflected as a capitalized liability on a balance sheet of
such Person; (j) all obligations of such Person to redeem or retire shares of
Capital Stock of such Person; (k) all indebtedness, liabilities and obligations
of such Person under any Hedge Agreement; and (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP. The Debt of any Person shall include the Debt of any
partnership or joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person
for payment of such Debt.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of the Loan or any
other amount payable by the Borrower under any Loan Document, a rate per annum
equal to the sum of two
5
percent (2.00%), plus the Applicable Rate for the Base Rate Balance as in effect
from time to time (provided that for amounts outstanding as Libor Balances or
IBOR Balances, the "Default Rate" for such principal shall be two percent
(2.00%), plus the Applicable Rate for each Libor Balance or IBOR Balance, as
applicable, for the remainder of the applicable Interest Period as provided in
Section 4.1, and, thereafter, the rate provided for above in this definition).
"Dollars" and "$" mean lawful money of the U.S.
"Domestic Subsidiary" means any Subsidiary of the Borrower that is
organized under the laws of any political subdivision of the United States.
"EBITDAR" means, for any period, the total of the following calculated
for the Borrower, without duplication, on a consolidated basis for such period:
(a) Net Income; plus (b) any provision for (or less any benefit from) income or
franchise taxes to the extent included in the determination of Net Income; plus
(c) Interest Expense to the extent included in the determination of Net Income;
plus (d) amortization and depreciation expense to the extent included in the
determination of Net Income; plus (e) other non-cash, non-recurring charges to
the extent included in the determination of Net Income; minus (f) other
non-recurring gains to the extent included in the determination of Net Income;
plus (g) all lease and rent expense for any real Property or personal Property
to the extent included in the determination of Net Income.
"Eligible Assignee" has the meaning specified in Section 15.8(g).
"Environmental Laws" means any and all federal, state and local laws,
regulations and requirements regulating health, safety or the environment.
"Environmental Liabilities" means, as to any Person, all indebtedness,
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, expert
and consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability or criminal or civil statute, including any Environmental Law,
Permit, order or agreement with any Governmental Authority or other Person,
arising from environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or any Subsidiary of the Borrower or
is under common control (within the meaning of Section 414(c) of the Code) with
the Borrower or any Subsidiary of the Borrower.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve
6
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"). The Libor Rate for each outstanding Libor Balance
and the IBOR Rate for each outstanding IBOR Balance shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage. The determination of the Eurodollar Reserve Percentage by the Agent
with respect to the Libor Rate and by Bank of America with respect to the IBOR
Rate shall be conclusive in the absence of manifest error.
"Event of Default" has the meaning specified in Section 13.1.
"Existing Letters of Credit" means the letters of credit issued by Bank
of America and listed on Schedule 1 hereto.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to Bank of America on such day on
such transactions as determined by the Agent and (c) with respect to
determination of the IBOR Rate as of any day and for any Interest Period, the
rate for Federal funds transactions of a duration of such Interest Period as
determined in accordance with clause (a) and clause (b) preceding by Bank of
America.
"Fee Letter" means the certain letter agreement dated as of September
23, 2002 among the Borrower, the Arranger and Bank of America.
"Fiscal Period" means one of the three fiscal periods in a Fiscal
Quarter each of which is approximately one calendar month in duration. There are
twelve (12) Fiscal Periods in a Fiscal Year.
"Fiscal Quarters" means one of four thirteen (13) week or, if
applicable, fourteen (14) week quarters in a Fiscal Year, with the first of such
quarters beginning on the first day of a Fiscal Year and ending on the Sunday of
the thirteenth (or fourteenth, if applicable) week in such quarter.
"Fiscal Year" means the Borrower's fiscal year for financial accounting
purposes beginning on the Monday following the Sunday nearest January 31 of each
year and ending on the Sunday nearest January 31 of the following year. The
current (as of the date hereof) Fiscal Year of the Borrower will end on February
2, 2003.
"Fixed Charge Coverage Ratio" means, for any period and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a)
EBITDAR for such period to (b) the sum of each of the following for such period
(i) Interest Expense to the extent included in the determination of Net Income,
plus (ii) lease and rent expense for any real Property or personal
7
Property plus (iii) scheduled principal payments on long-term Debt (including
capital leases) arising during such period.
"Foreign Lender" means any Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code.
"Foreign Subsidiary" means each Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt" means, with respect to any Person (the "subject Person")
at any time (without duplication): (a) Debt described in clauses (a), (b), (c),
(d), (f) and (g) of the definition of Debt, other than Debt consisting of
Undrawn Trade Letters of Credit, and (b) Guarantees by the subject Person of
Funded Debt (as described in clause (a) preceding) of any other Person.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with Section
1.3), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"Governmental Authority" means any nation or government, any federal,
state, county, municipal, parish, provincial, township or other political
subdivision thereof, and any department, commission, board, court, agency or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Guarantee" means any indebtedness, liability or obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person or indemnifying such other Person for any
Debt or other obligation and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of such Person (a)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part);
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any Guarantee shall
be deemed to be equal to the lesser of (y) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or (z) the maximum amount for which such guaranteeing Person may be
liable pursuant to the terms of the instrument embodying such Guarantee, unless
such primary obligation and the maximum amount for which such guaranteeing
Person may be liable are not stated or determinable, in which case the amount of
such Guarantee shall be such guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as mutually determined by the Borrower
and the Agent in good faith. The term "Guarantee" used as a verb has a
corresponding meaning.
8
"Guarantor" means any Person who is or becomes a party to any Guaranty
of the Obligations or any part thereof, including each Subsidiary of the
Borrower who is a party to the Subsidiary Guaranty pursuant to the terms of
Article 7.
"Guaranty" means the Subsidiary Guaranty or any other guaranty agreement
executed and delivered by a Person in favor of the Agent, for the benefit of the
Agent and the Lenders, and any and all amendments, restatements or other
modifications thereof, and "Guaranties" means all of such agreements,
collectively.
"Hazardous Material" means any substance, product, waste, pollutant,
chemical, contaminant, insecticide, pesticide, constituent or material which is
or becomes listed, regulated or addressed under any Environmental Law as a
result of its hazardous or toxic nature.
"Hedge Agreement" means any agreement, device or arrangement designed to
protect a Person from the fluctuations of interest rates, exchange rates or
forward rates applicable to its 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, swap or collar protection agreements and forward rate currency or interest
rate options, as the same may be amended or modified and in effect from time to
time, and any cancellation, buy-back, reversal, termination or assignment of any
of the foregoing.
"IBOR Balance" means any portion of the Swingline Advances that bears
interest at a rate based upon the IBOR Rate.
"IBOR Base Rate" means the interest rate at which Bank of America's
Grand Cayman Banking Center, Grand Cayman, British West Indies, would offer
Dollar deposits for the applicable Interest Period to other major banks in the
offshore Dollar interbank market.
"IBOR Interest Period" means, with respect to any IBOR Balance, each
period commencing on the date such Balance is established or Continued or
Converted from the Base Rate Balance under the Swingline Advances to an IBOR
Balance or the last day of the next preceding Interest Period with respect to
such IBOR Balance, and ending one, two, three, four, five, six or seven days
thereafter, as the Borrower may select as provided in Section 4.5 or Section
5.3. Notwithstanding the foregoing: (a) each IBOR Interest Period shall end on a
Business Day; (b) no Interest Period may extend beyond the Maturity Date; and
(c) no more than three (3) IBOR Interest Periods shall be in effect at the same
time.
"IBOR Rate" means, with respect to any IBOR Balance for the relevant
Interest Period, a rate per annum determined by Bank of America pursuant to the
following formula:
IBOR Rate = IBOR Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
"IBOR Rate Margin" has the meaning specified in Section 4.2.
"Indemnified Liabilities" has the meaning specified in Section 15.2.
9
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service xxxx registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
"Interest Expense" means, for any period and for any Person, the sum of
(a) interest expense of such Person calculated without duplication on a
consolidated basis for such period in accordance with GAAP, plus (b) interest
expenses paid under Hedge Agreements during such period minus (c) interest
payments received under Hedge Agreements during such period.
"Interest Period" means a Libor Interest Period or an IBOR Interest
Period, as applicable.
"Investments" has the meaning specified in Section 11.5.
"Joinder Agreement" means an agreement to be executed by a Person
pursuant to the terms of Section 7.2, in substantially the form of Exhibit G.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Commitment
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a borrowing under the Loan.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all outstanding L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph of this
Agreement and, as the context requires, includes the L/C Issuer.
"Letter of Credit" means any letter of credit issued hereunder and shall
include the Existing Letters of Credit. Each Letter of Credit shall be a standby
letter of credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in such form as shall at any
time be in use by the L/C Issuer.
10
"Letter of Credit Sublimit" means an amount equal to $50,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the aggregate
Commitments.
"Leverage Ratio" means, as of any period end and determined on a
consolidated basis for the Borrower and its Subsidiaries, the ratio of (a) Total
Adjusted Funded Debt to (b) EBITDAR.
"Libor Balance" means any portion of the Revolving Loan that bears
interest at a rate based upon the Libor Rate.
"Libor Base Rate" means, with respect to any Libor Interest Period (a)
the rate per annum equal to the rate determined by the Agent to be the offered
rate that appears on the page of the Telerate screen (or any successor thereto)
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period, (b) in the event the rate referenced in the preceding clause
(a) does not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the Agent to be
the offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period or (c) in
the event the rates referenced in clause (a) or clause (b) preceding are not
available, the rate per annum determined by the Agent as the rate of interest
(rounded upward to the next 1/100th of 1%) at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Libor Balance being advanced, Continued or Converted
by Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America's London Branch to major banks in the offshore Dollar
market at their request at approximately 4:00 p.m. (London time) two (2)
Business Days prior to the first day of such Interest Period. The determination
of the Libor Base Rate by the Agent shall be conclusive in the absence of
manifest error.
"Libor Interest Period" means with respect to any Libor Balance, each
period commencing on the date such Balance is established or Continued or
Converted from the Base Rate Balance to a Libor Balance, or the last day of the
next preceding Libor Interest Period with respect to such Libor Balance, and
ending one week thereafter or on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the Borrower may select as
provided in Section 4.5 or Section 5.3, except that each such Libor Interest
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Libor
Interest Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or if such succeeding Business
Day falls in the next succeeding calendar month, on the next preceding Business
Day); (b) any Libor Interest Period which would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; (c) no more than ten (10) Libor
Interest Periods shall be in effect at the same time; and (d) no Libor Interest
Period for any Libor Balance shall have a duration of less than
11
one (1) week and, if the Libor Interest Period would otherwise be a shorter
period, the related Libor Balance shall not be available hereunder.
"Libor Rate" means, with respect to any Libor Balance for the relevant
Interest Period, a rate per annum determined by the Agent pursuant to the
following formula:
Libor Rate = Libor Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
"Libor Rate Margin" has the meaning specified in Section 4.2.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority or other encumbrance of
any kind or nature whatsoever (including any conditional sale or title retention
agreement), whether arising by contract, operation of law or otherwise.
"Loan" means the Revolving Loan and the Swingline Advances.
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, any Joinder Agreement and all other agreements, documents and
instruments now or hereafter executed and/or delivered pursuant to or in
connection with any of the foregoing, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof (excluding any
commitment letter, term sheet or other agreement entered into prior to the
Closing Date).
"Margin Adjustment Date" has the meaning specified in Section 4.2.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the business or financial
condition, prospects, performance or operations of the Borrower individually or
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower individually or the Borrower and its Subsidiaries taken as a whole to
pay and perform the obligations for which it or they, as applicable, are
responsible when due or (c) the validity or enforceability of (i) any of the
Loan Documents or (ii) the rights and remedies of the Agent or the Lenders under
any of the Loan Documents.
"Maturity Date" means the day which is the third anniversary of the
Closing Date.
"Maximum Rate" has the meaning specified in Section 15.12.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate at any time within the six (6) year period preceding the
date hereof or hereafter and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding the income of any other
12
Person (other than Subsidiaries) in which such Person or any Subsidiary of such
Person has an ownership interest, unless received by such Person or a Subsidiary
of such Person in a cash distribution.
"Net Proceeds" means (a) in connection with any disposition of Property
of the Borrower or any of its Subsidiaries, the cash proceeds received by such
Person from such disposition (including payments under notes or other debt
Securities received in connection with any such disposition, but only as and
when received) net of (i) the costs of such disposition (including reasonable,
out-of-pocket professional fees and expenses, investment banking fees, financial
advisory fees, taxes, notarial fees, survey costs, title insurance premiums,
required escrow deposits and purchase price adjustments and other customary fees
and expenses, in each case attributable to and actually paid in connection with
such disposition) and (ii) amounts applied to repayment of Debt (other than the
Obligations) secured by a Lien on the Property disposed of and (b) in connection
with issuance of any Securities, the cash proceeds received from such issuance,
net of all costs of such issuance (including reasonable, out-of-pocket
professional fees and expenses, notarial fees, underwriting discounts and
commissions, placement, underwriting or arrangement fees and other customary
fees and expenses) actually paid.
"Note Agreement" means that certain Note Agreement Re: $40,000,000 7.20%
Senior Notes Due August 8, 2005, dated as of August 1, 1995, entered into by the
Borrower and the "Purchasers" party thereto and each other agreement, document
or instrument entered into or delivered in connection therewith, as such
agreements, documents and instruments may be amended, restated or otherwise
modified from time to time.
"Notes" means the Revolving Notes and the Swingline Note.
"Obligations" means any and all (a) obligations, indebtedness and
liabilities of the Borrower to the Agent and the Lenders, or any of them,
arising pursuant to this Agreement or any other Loan Document or otherwise with
respect to the Loan or any Letter of Credit, whether now existing or hereafter
arising, whether direct, indirect, fixed, contingent, liquidated, unliquidated,
joint, several or joint and several, including the obligation of the Borrower to
repay the Loan, interest on the Loan and all fees, costs and expenses (including
Attorney Costs) provided for in the Loan Documents and (b) indebtedness,
liabilities and obligations of the Borrower under any Hedge Agreement that the
Borrower may enter into with the Agent, any Lender or any of their respective
Affiliates if and to the extent that such Hedge Agreement is permitted in
accordance with Section 11.1(i).
"Offering Memorandum" means the Confidential Offering Memorandum dated
September 2002, prepared and distributed by the Arranger with respect to the
syndication of the Commitments and the Loan evidenced by this Agreement.
"Original Agreement" means that certain Amended and Restated Credit
Agreement, dated as of August 23, 2000, among the Borrower, Bank of America, as
agent, and the "Lenders" party thereto which originally provided for credit
facilities in an aggregate principal amount of $200,000,000.
"Other Taxes" has the meaning specified in Section 6.6(b).
13
"Outstanding Amount" means (i) with respect to the Loan on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of the Loan, as the case may be,
occurring on such date and (ii) with respect to L/C Obligations on any date, the
amount of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other change in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursement of any outstanding unpaid drawing under any Letter of Credit or
any reduction in the maximum amount available for drawing under any Letter of
Credit taking effect on such date.
"Participant" has the meaning specified in Section 15.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permit" means any permit, certificate, approval order, license or other
authorization.
"Permitted Acquisition" means any acquisition of the Capital Stock of a
Person or any acquisition of Property which constitutes a significant or
material portion of an existing business of a Person, in each case, in a
transaction that satisfies each of the following requirements:
(a) No Default; Certificate of Compliance. Both before and after
giving effect to such acquisition and any advance of the Loan requested
to be made in connection therewith, no Default exists or will exist or
would result therefrom, and, not less than five (5) Business Days prior
to the date of such acquisition, the Borrower shall provide the Agent
and the Lenders with a certificate duly executed by the chief financial
officer or Vice President, Finance of the Borrower which represents and
warrants pro forma compliance with each of the terms and covenants of
this Agreement as of the date of and after giving effect to such
acquisition;
(b) Consideration. The total consideration (whether classified as
purchase price, noncompete payments or otherwise, and including the
amount of all Debt incurred, assumed or acquired by the Borrower and its
Subsidiaries in connection with such acquisition, and without regard to
whether such amount is paid at closing or paid over time and the Dollar
value of all other assets, including Capital Stock of the Borrower, to
be transferred by the purchaser in connection with such acquisition to
the seller or sellers, all valued in accordance with the applicable
agreement entered into between the Target and/or the seller and the
purchaser) to be paid by the Borrower and its Subsidiaries in connection
with all such acquisitions during any Fiscal Year shall not exceed
twenty percent (20.0%) of the Borrower's Tangible Net Worth as of the
end of the immediately preceding Fiscal Year;
(c) Diligence. The Borrower has completed due diligence to its
satisfaction on the Target or the Property to be acquired and has
provided the Agent and the Lenders with copies of all agreements and
information (including due diligence materials) entered into or received
by the Borrower or requested by the Agent or any Lender, as the Agent or
any Lender may reasonably request;
14
(d) Structure. If the proposed acquisition is an acquisition of
the Capital Stock of a Target, the acquisition will be structured so
that the Target will become a Wholly-Owned Subsidiary; if the proposed
acquisition is an acquisition of assets, the acquisition will be
structured so that the Borrower or a Wholly-Owned Subsidiary shall
acquire such assets; and, if the proposed acquisition is the acquisition
of a Person, the Board of Directors of such Person has approved such
acquisition;
(e) Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries shall, as a result of or in connection with any such
acquisition, assume or incur any contingent liabilities (whether
relating to environmental, tax, litigation or other matters) that could
reasonably be expected, as of the date of such acquisition, to result in
the existence or occurrence of a Material Adverse Effect; and
(f) Lines of Business. The Target shall be engaged in
substantially the same line or lines of business, or a business
reasonably related or complementary thereto, as the Borrower and its
Subsidiaries.
"Permitted Liens" means the Liens permitted by Section 11.2.
"Permitted Sale-Leaseback" means a transaction designed to reduce state
tax liability whereby the Borrower or one of its Subsidiaries sells Property to
another Person which finances the purchase price of such Property by selling
notes to, or otherwise borrowing from, the Borrower or one of its Subsidiaries
and leases such Property to the seller in an operating lease transaction.
"Person" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Principal Office" means the office of the Agent, located at 000 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
"Prohibited Transaction" means any transaction described in Section 406
or 407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means the Borrower's forecasted consolidated (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements and (d)
capitalization statements, all materially consistent with the Borrower's
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
personal or mixed, tangible or intangible (including all rights relating
thereto), whether owned or acquired on or after the Closing Date.
15
"Quarterly Payment Date" means the last Business Day of each March,
June, September and December of each year, the first of which shall be December
31, 2002.
"Register" has the meaning specified in Section 15.8(c).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended, modified or supplemented from
time to time or any successor regulation therefor.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended, modified or supplemented from
time to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement (other than with respect to taxes excluded by the
first sentence of Section 6.6(a)) in U.S. federal, state or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests (other than with respect to taxes
excluded by the first sentence of Section 6.6(a)) applying to a class of lenders
including such Lender of or under any U.S. federal or state or any foreign laws
or regulations (whether or not having the force of law) by any Governmental
Authority or monetary authority charged with the interpretation or
administration thereof.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or from Property owned or leased by such Person, including the migration of
Hazardous Materials through or in the air, soil, surface water, ground water or
property, in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable
Environmental Laws to (a) clean up, remove, treat or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; provided that "Remedial Action" shall not include such actions taken in
the normal course of business and in material compliance with Environmental
Laws.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Required Lenders" means any combination of Lenders having more than
fifty percent (50.0%) of the sum of the Commitments or, if the Commitments have
terminated, the Total Outstandings (with the aggregate amount of each Lender's
risk participation and funded participation in L/C Obligations being deemed
"held" by such Lender for purposes of this definition).
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of the Borrower. Any
document delivered hereunder that is signed by a Responsible Officer of the
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of the
16
Borrower and such Responsible Officer shall be conclusively presumed to have
acted on behalf of the Borrower.
"Revolving Loan" means, as to any Lender, the advances made by such
Lender pursuant to Section 2.1 (other than Swingline Advances), and, as to all
Lenders, all such advances made or held by the Lenders pursuant to Section 2.1.
"Revolving Notes" means the promissory notes provided for by Section 2.2
(other than the Swingline Note) and all amendments, restatements or other
modifications thereof.
"Securities" means any stock, shares, options, warrants, voting trust
certificates or other instruments evidencing an ownership interest or a right to
acquire an ownership interest in a Person or any bonds, debentures, notes or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including contingent liabilities, of such Person,
(b) the present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital after giving
due consideration to current and anticipated future capital requirements and
current and anticipated future business conduct and the prevailing practice in
the industry in which such Person is engaged. In computing the amount of
contingent liabilities at any time, such liabilities shall be computed at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Subsidiary" means, (a) when used to determine the relationship of a
Person (the "parent") to another Person, a Person (the "subsidiary") of which an
aggregate of more than fifty percent (50.0%) or more of the Capital Stock is
owned of record or beneficially by the parent, or by one or more Subsidiaries of
the parent, or by the parent and one or more Subsidiaries of the parent, (i) if
the holders of such Capital Stock (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or other individuals performing similar functions) of the subsidiary, even
though the right so to vote has been suspended by the happening of such a
contingency or (B) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of the
subsidiary, whether or not the right so to vote exists by reason of the
happening of a contingency or (ii) in the case of Capital Stock which is not
issued by a corporation, if such ownership interests constitute a majority
voting interest and (b) when used with respect to a Plan, ERISA or a provision
of the Code pertaining to employee benefit plans, means, with respect to the
parent, any corporation, trade or business (whether or not incorporated) which
is under common control with the parent
17
and is treated as a single employer with the parent under Section 414(b) or
Section 414(c) of the Code and the regulations thereunder.
"Subsidiary Guarantor" means a Subsidiary of the Borrower which is a
Guarantor hereunder.
"Subsidiary Guaranty" means a guaranty agreement executed and delivered
by a Subsidiary of the Borrower in favor of the Agent, for the benefit of the
Agent and the Lenders, in substantially the form of Exhibit E, as such guaranty
agreement may be amended, restated or otherwise modified from time to time.
"Swingline Advance" has the meaning specified in Section 2.1.
"Swingline Note" means the swingline promissory note provided for by
Section 2.2 and all amendments, restatements or other modifications thereof.
"Tangible Net Worth" means the Borrower's (a) shareholders' equity
(including Capital Stock, additional paid-in capital and retained earnings)
minus (b) all intangible assets, each as determined in accordance with GAAP.
"Target" means the Person who is to be acquired or whose assets are to
be acquired by the Borrower or a Wholly-Owned Subsidiary in connection with a
Permitted Acquisition.
"Taxes" has the meaning specified in Section 6.6.
"Termination Event" means (a) a Reportable Event, (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (c) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA or the appointment of a
trustee to administer any Plan.
"Total Adjusted Funded Debt" means, as of any date of determination,
with respect to the Borrower and its Subsidiaries, (a) the average outstanding
principal balance of all Funded Debt of such Persons as of the end of each of
the immediately preceding twelve (12) Fiscal Periods, plus (b) without
duplication, all lease and rent expense for any real Property for the preceding
four (4) Fiscal Quarters multiplied by eight (8) plus (c) without duplication,
all lease and rent expense for any personal Property for the preceding four (4)
Fiscal Quarters multiplied by three (3).
"Total Outstandings" means the aggregate Outstanding Amount of the Loan
and all L/C Obligations.
"Type" means any type of Balance (i.e., a Base Rate Balance, a Libor
Balance or an IBOR Balance).
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of California.
18
"Undrawn Trade Letter of Credit" means any outstanding commercial or
documentary letter of credit issued for the account of the Borrower or any
Subsidiary of the Borrower under which (a) a drawing for payment has not been
made by the beneficiary, (b) a drawing for payment has been made by the
beneficiary and was timely paid by the Borrower or such Subsidiary in accordance
with the terms thereof and a balance remains undrawn pursuant to the terms
thereof or (c) a drawing has been made and remains unpaid by the Borrower or
such Subsidiary and such drawing has been outstanding for a period not in excess
of three (3) Business Days.
"Unfunded Vested Accrued Benefits" means, with respect to any Plan at
any time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds (b) the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan.
"Unreimbursed Amount" has the meaning set forth in Section 3.3(a).
"U.S." means the United States of America.
"Voting Stock" means Capital Stock of a Person having by the terms
thereof ordinary voting power to elect a majority of the board of directors (or
similar governing body) of such Person (irrespective of whether or not at the
time Capital Stock of any other class or classes of such Person shall have or
might have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the Borrower that is
owned 100% by the Borrower and/or a Subsidiary of the Borrower.
Section 1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "hereof", "herein", "hereunder" and words of
similar import referring to this Agreement refer to this
Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all Article, Exhibit,
Section and Schedule references pertain to Articles, Exhibits,
Sections and Schedules of this Agreement.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to
but excluding", and the word "through" means "to and including."
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include
19
all subsequent amendments and other modifications thereto and (ii)
references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(d) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
Unless otherwise expressly provided, any reference to any action of the
Agent or any Lender by way of consent, approval or waiver shall be
deemed modified by the phrase "in its/their sole discretion."
(e) Terms used herein that are defined in the UCC, unless
otherwise defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent and the Lenders
hereunder shall be prepared, in accordance with GAAP on a "consistent basis"
with those used in the preparation of the financial statements referred to in
Section 9.2. All calculations made for the purposes of determining compliance
with the provisions of this Agreement shall be made by application of GAAP on a
"consistent basis" with those used in the preparation of the financial
statements referred to in Section 9.2. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period. Changes in the application of accounting principles which
do not have a material impact on calculating the financial covenants herein
shall be deemed comparable in all material respects to accounting principles
applied in a preceding period. To enable the ready and consistent determination
of compliance by the Borrower with its obligations under this Agreement, the
Borrower will not, nor will it permit any of its Subsidiaries to, change the
manner in which either the last day of its Fiscal Year or the last day of each
of the first three Fiscal Quarters of its Fiscal Year is determined without the
prior written consent of the Required Lenders. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
this Agreement, and either the Borrower or the Required Lenders shall so
request, the Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to San Francisco, California
time.
Section 1.5 Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
20
ARTICLE 2
Credit Facility
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make advances to the Borrower from
time to time, subject to the provisions of Section 2.4, from the Closing Date to
the Maturity Date in an aggregate principal amount at any time outstanding up to
but not exceeding the amount of such Lender's Commitment as then in effect;
provided, however, (a) the aggregate Outstanding Amount of (i) the Revolving
Loan outstanding applicable to a Lender plus such Lender's Commitment Percentage
of the Outstanding Amount of all L/C Obligations shall not at any time exceed
such Lender's Commitment and (ii) the Loan (inclusive of such Lender's
obligation to make advances under the Revolving Loan to pay Swingline Advances)
outstanding applicable to a Lender plus such Lender's Commitment Percentage of
the Outstanding Amount of all L/C Obligations shall not at any time exceed such
Lender's Commitment and (b) the Total Outstandings shall not at any time exceed
the aggregate Commitments. Subject to the foregoing limitations, and the other
terms and provisions of this Agreement, the Borrower may borrow, prepay and
reborrow hereunder the amount of the Commitments and may establish a Base Rate
Balance and Libor Balances thereunder and, until the Maturity Date, the Borrower
may Continue Libor Balances established under the Revolving Loan or Convert
Balances established under the Revolving Loan as either Libor Balances or Base
Rate Balances into Base Rate Balances or Libor Balances, as applicable.
Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may from time to time request, and Bank of America may in its
discretion from time to time advance (but shall in no event be obligated to
advance), revolving loans which are to be funded solely by Bank of America (the
"Swingline Advances"); provided, however, that (i) the aggregate principal
amount of the Swingline Advances outstanding at any time shall not exceed
fifteen million Dollars ($15,000,000) and the Total Outstandings shall not
exceed the aggregate principal amount of the Commitments and (ii) Bank of
America shall give the Agent and each Lender written notice of the aggregate
outstanding principal amount of the Swingline Advances upon the written request
of the Agent or any Lender (but no more often than once every calendar quarter).
Furthermore, upon one (1) Business Day's prior written notice given by Bank of
America to the Agent and the other Lenders at any time and from time to time
(including at any time following the occurrence of a Default or an Event of
Default) and, in any event, without notice on the Business Day immediately
preceding the Maturity Date, each Lender (including Bank of America) severally
agrees, irrevocably and unconditionally, as provided in the first sentence of
this Section 2.1, and notwithstanding anything to the contrary contained in this
Agreement, any Default or Event of Default or the inability or failure of the
Borrower or any of its Subsidiaries to satisfy any condition precedent to
funding any advance under the Loan contained in Article 8 (which conditions
precedent shall not apply to this sentence), to make an advance under the
Revolving Loan, in the form of a Base Rate Balance, in an amount equal to its
Commitment Percentage of the aggregate principal amount of the Swingline
Advances then outstanding, and the proceeds of such advance under the Revolving
Loan shall be promptly paid by the Agent to Bank of America and applied as a
repayment of the aggregate principal amount of the Swingline Advances then
outstanding. Subject to the other terms and provisions of this Agreement, the
Borrower may borrow, prepay and reborrow hereunder the Swingline Advances and
may establish a Base Rate Balance and IBOR Balances thereunder and, until the
Maturity Date, the Borrower may Continue IBOR Balances established under the
Swingline Advances or
21
Convert Balances established under the Swingline Advances as either IBOR
Balances or Base Rate Balances into Base Rate Balances or IBOR Balances, as
applicable. Each Type of Balance under the Loan advanced by each Lender shall be
established and maintained at such Lender's Applicable Lending Office for such
Type of Balance.
Section 2.2 Notes. The portion of the Revolving Loan made by each Lender
shall be evidenced by a single promissory note of the Borrower, in substantially
the form of Exhibit A (a "Revolving Note"), payable to the order of such Lender,
in the maximum principal amount equal to such Lender's Commitment as originally
in effect (or, if greater, its Commitment as thereafter increased) and otherwise
duly completed, and the Swingline Advances made by Bank of America shall be
evidenced by a single promissory note of the Borrower in the maximum original
principal amount of fifteen million Dollars ($15,000,000) payable to the order
of Bank of America in substantially the form of Exhibit B (the "Swingline
Note"), dated the Closing Date.
Section 2.3 Repayment of Loan. The Borrower shall pay to the Agent, for
the account of the Lenders, (a) the prepayments of the Loan required pursuant to
Section 5.4(a) and (b) the outstanding principal amount of the Loan on the
Maturity Date.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement, the
proceeds of the Loan shall be used by the Borrower (a) to renew the Borrower's
existing indebtedness due under the Original Agreement, (b) to finance Capital
Expenditures by the Borrower and (c) for general corporate purposes, including
to finance working capital requirements of the Borrower and its Subsidiaries,
arising in the ordinary course of business.
Section 2.5 Termination or Reduction of Commitments. The Borrower shall
have the right to terminate fully or to reduce in part the unused portion of the
Commitments at any time and from time to time, provided that: (a) the Borrower
shall not have the right to terminate or reduce in part any unused portion of
the Commitments that could or may be required to be advanced by the Lenders to
refinance Swingline Advances then outstanding; (b) the Borrower shall give the
Agent at least three (3) Business Days' notice of each such termination or
reduction as provided in Section 5.3; and (c) each partial reduction shall be in
an aggregate amount at least equal to $10,000,000 or any multiple of $5,000,000
in excess thereof. The Commitments may not be reinstated after they have been
terminated or reduced. If, after giving effect to any reduction of the
Commitments, the Letter of Credit Sublimit exceeds the amount of the aggregate
Commitments, such sublimit shall be automatically reduced by the amount of such
excess.
Section 2.6 Increase of Commitments.
(a) Upon notice to the Agent (who shall promptly notify the
Lenders), the Borrower may, from time to time prior to the day which is
the thirty (30) month anniversary of the Closing Date, request an
increase in the aggregate Commitments up to an aggregate of
$250,000,000; provided that, in the event the Borrower has reduced the
Commitments pursuant to Section 2.5, the amount of any increase in the
Commitments pursuant to this Section 2.6 shall not exceed $50,000,000.
At the time of sending such notice, the Borrower (in consultation with
the Agent) shall specify the time period within
22
which each Lender is requested to respond to such request. Each Lender
shall respond within such time period to the Agent as to whether or not
it agrees to increase its Commitment and, if so, whether by an amount
equal to or less than its Commitment Percentage of such requested
increase. Any Lender not responding within such time period shall be
deemed to have declined to increase its Commitment. The Agent shall
notify the Borrower and each Lender of the Lenders' responses to each
request made hereunder. To achieve the full amount of a requested
increase, the Borrower may also (i) request that one or more other
Lenders, in their sole and absolute discretion, nonratably increase
their Commitment(s) and/or (ii) invite additional Eligible Assignees to
become Lenders under the terms of this Agreement.
(b) If any Commitments are increased in accordance with this
Section, the Agent and the Borrower shall determine the effective date
of such increase (the "Increase Effective Date"). The Agent and the
Borrower shall promptly confirm in writing to the Lenders the final
allocation of such increase and the Increase Effective Date. As a
condition precedent to such increase, the Borrower shall deliver to the
Agent a certificate dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of
the Borrower (i) certifying and attaching the resolutions adopted by the
Borrower and each Guarantor approving or consenting to such increase,
(ii) including a Compliance Certificate demonstrating pro forma
compliance with Section 12.1 after giving effect to such increase and
(iii) certifying that before and after giving effect to such increase,
the representations and warranties contained in Article 9 are true and
correct on and as of the Increase Effective Date and no Default exists.
The Borrower shall deliver new or amended Notes reflecting the new or
increased Commitment of each new or affected Lender as of the Increase
Effective Date. The Borrower shall prepay any Libor Balances outstanding
on the Increase Effective Date (and pay any costs incurred in connection
with such prepayment pursuant to Section 6.5) to the extent necessary to
keep outstanding Balances ratable with any revised Commitment
Percentages arising from any nonratable increase in the Commitments
under this Section.
(c) This Section shall supersede any provision in Section 15.11
to the contrary.
ARTICLE 3
Letters of Credit
Section 3.1 The Letter of Credit Commitment.
(a) Subject to the terms and conditions set forth herein, (i) the
L/C Issuer agrees, in reliance upon the agreements of the other Lenders
set forth in this Article 3, (A) from time to time on any Business Day
during the period from the Closing Date until the Maturity Date, to
issue Letters of Credit for the account of the Borrower, and to amend or
extend Letters of Credit previously issued by it, in accordance with
Section 3.2, and (B) to honor drafts under the Letters of Credit and
(ii) the Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower; provided that the L/C Issuer
shall not be obligated to make any L/C Credit Extension with respect to
any
23
Letter of Credit, and no Lender shall be obligated to participate in any
Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Total Outstandings would exceed the aggregate Commitments, (y) the
aggregate Outstanding Amount of the portion of the Loan made by any
Lender, plus such Lender's Commitment Percentage of the Outstanding
Amount of all L/C Obligations would exceed the amount of such Lender's
Commitment or (z) the Outstanding Amount of the L/C Obligations would
exceed the Letter of Credit Sublimit. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's ability to
obtain Letters of Credit shall be fully revolving and, accordingly, the
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon
and reimbursed. All Existing Letters of Credit shall be deemed to have
been issued pursuant hereto and, from and after the Closing Date, shall
be subject to and governed by the terms and conditions hereof; without
limiting the foregoing, each Lender shall be deemed to have purchased
from the L/C Issuer a risk participation in each Existing Letter of
Credit on the Closing Date pursuant to Section 3.2(b).
(b) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or
any law, rule or regulation applicable to the L/C Issuer or any
request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C
Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which
the L/C Issuer in good xxxxx xxxxx material to it;
(ii) subject to Section 3.2(c), the expiry date of such
requested Letter of Credit would occur more than twelve months
after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date;
(iii) the expiry date of such requested Letter of Credit
would occur more than one year after the Maturity Date, unless
all Lenders have approved such expiry date;
(iv) the issuance of such Letter of Credit would violate
one or more policies of the L/C Issuer; or
(v) such Letter of Credit is in an initial amount less
than $250,000 or is to be denominated in a currency other than
Dollars.
(c) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (i) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit
24
in its amended form under the terms hereof or (ii) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such
Letter of Credit.
Section 3.2 Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(a) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of the Borrower delivered to the L/C Issuer
(with a copy to the Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer
of the Borrower. Such Letter of Credit Application must be received by
the L/C Issuer and the Agent not later than 11:00 a.m. at least two
Business Days (or such later date and time as the L/C Issuer may agree
in a particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a
request for the initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the
L/C Issuer: (i) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (ii) the amount thereof; (iii)
the expiry date thereof; (iv) the name and address of the beneficiary
thereof; (v) the documents to be presented by such beneficiary in case
of any drawing thereunder; (vi) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and
(vii) such other matters as the L/C Issuer may require. In the case of a
request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (1) the Letter of Credit to be amended;
(2) the proposed date of amendment thereof (which shall be a Business
Day); (3) the nature of the proposed amendment; and (4) such other
matters as the L/C Issuer may require.
(b) Promptly after receipt of any Letter of Credit Application,
the L/C Issuer will confirm with the Agent (by telephone or in writing)
that the Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Agent
with a copy thereof. Upon receipt by the L/C Issuer of confirmation from
the Agent that the requested issuance or amendment is permitted in
accordance with the terms hereof, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue
such Letter of Credit for the account of the Borrower or enter into such
amendment, as the case may be, in each case in accordance with the L/C
Issuer's usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender's Commitment Percentage times the amount
of such Letter of Credit.
(c) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an "Auto-Extension Letter of Credit");
provided that any such Auto-Extension Letter of Credit must permit the
L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the "Nonextension Notice Date") in each such twelve-month
25
period to be agreed upon at the time such Letter of Credit is issued.
Unless otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such
extension. Once an Auto-Extension Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the L/C
Issuer to permit the extension of such Letter of Credit at any time to
an expiry date not later than one year after the Maturity Date; provided
that the L/C Issuer shall not permit any such extension if (i) the L/C
Issuer has determined that it would have no obligation at such time to
issue such Letter of Credit in its extended form under the terms hereof
(by reason of the provisions of Section 3.1(b) or otherwise) or (ii) it
has received notice (which may be by telephone or in writing) on or
before the day that is two Business Days before the Nonextension Notice
Date (A) from the Agent that the Required Lenders have elected not to
permit such extension or (B) from the Agent, any Lender or the Borrower
that one or more of the applicable conditions specified in Section 8.2
is not then satisfied.
(d) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Agent a true and complete copy of such Letter of Credit
or amendment.
Section 3.3 Drawings and Reimbursements; Funding of Participations.
(a) Upon receipt from the beneficiary of any Letter of Credit of
any notice of a drawing under such Letter of Credit, the L/C Issuer
shall notify the Borrower and the Agent of its receipt of such notice
and the amount of the requested drawing. Within one (1) Business Day of
the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an "Honor Date"), the Borrower shall reimburse the L/C Issuer
through the Agent in an amount equal to the amount of such drawing. If
the Borrower fails to so reimburse the L/C Issuer by such time, the
Agent shall promptly notify each Lender of the Honor Date, the amount of
the unreimbursed drawing (the "Unreimbursed Amount") and the amount of
such Lender's Commitment Percentage thereof. In such event, the Borrower
shall be deemed to have requested a borrowing to be disbursed on the
Honor Date of an amount of the Loan in an amount equal to the
Unreimbursed Amount (which amount shall be a Base Rate Balance), without
regard to the minimum and multiples specified in Section 5.2 for the
principal amount of borrowings, but subject to the amount of the
unutilized portion of the aggregate Commitments and the conditions set
forth in Section 8.2. Any notice given by the L/C Issuer or the Agent
pursuant to this Section 3.3(a) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of
such notice.
(b) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 3.3(a) make funds available to the
Agent for the account of the L/C Issuer at the Principal Office in an
amount equal to its Commitment Percentage of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by the
Agent, whereupon, subject to the provisions of Section 3.3(c), each
Lender that so makes funds available shall be deemed to have made a
portion of the Loan
26
available to the Borrower in such amount, which portion shall be a Base
Rate Balance. The Agent shall remit the funds so received to the L/C
Issuer.
(c) With respect to any Unreimbursed Amount that is not fully
refinanced by a borrowing of portions of the Loan because the conditions
set forth in Section 8.2 cannot be satisfied or for any other reason,
the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Agent for the account of the
L/C Issuer pursuant to Section 3.3(b) shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation obligation
under this Article 3.
(d) Until each Lender funds its portion of the Loan or an L/C
Advance pursuant to this Section 3.3 to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such
Lender's Commitment Percentage of such amount shall be solely for the
account of the L/C Issuer.
(e) Each Lender's obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 3.3, shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the L/C Issuer, the Borrower or any other Person
for any reason whatsoever, (ii) the occurrence or continuance of a
Default or (iii) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided that each Lender's
obligation to make available portions of the Loan pursuant to this
Section 3.3 is subject to the conditions set forth in Section 8.2. No
such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the L/C Issuer for the amount of
any payment made by the L/C Issuer under any Letter of Credit, together
with interest as provided herein.
(f) If any Lender fails to make available to the Agent for the
account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 3.3 by the time
specified in Section 3.3(b), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Agent), on demand, such amount with
interest thereon for the period from the date such payment is required
to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of the L/C Issuer submitted to any Lender
(through the Agent) with respect to any amounts owing under this clause
(f) shall be conclusive absent manifest error.
Section 3.4 Repayment of Participations.
(a) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 3.3, if
the Agent receives for the account of the L/C
27
Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Agent), the
Agent will distribute to such Lender its Commitment Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's L/C Advance was
outstanding) in the same funds as those received by the Agent.
(b) If any payment received by the Agent for the account of the
L/C Issuer pursuant to Section 3.3(a) is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be
returned (including pursuant to any settlement entered into by the L/C
Issuer in its discretion), each Lender shall pay to the Agent for the
account of the L/C Issuer its Commitment Percentage thereof on demand of
the Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
Section 3.5 Obligations Absolute. The obligation of the Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement or any other agreement or instrument relating
hereto or thereto;
(ii) the existence of any claim, counterclaim, set-off, defense
or other right that the Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting), the
L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto or any unrelated
transaction;
(iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, so long as any such document appeared to
comply with the terms of such Letter of Credit, or any loss or delay in
the transmission or otherwise of any document required in order to make
a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer in good faith under such
Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit, or any
payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any
proceeding under any bankruptcy or insolvency law; or
28
(v) any other circumstance or happening whatsoever where the L/C
Issuer has acted in good faith.
The Borrower shall examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it within one Business Day of such
delivery and, in the event of any claim of noncompliance with the Borrower's
instructions or other irregularity, the Borrower will immediately notify the L/C
Issuer. The Borrower shall be conclusively deemed to have waived any such claim
against the L/C Issuer and its correspondents unless such notice is given as
aforesaid.
Section 3.6 Role of L/C Issuer. Each Lender and the Borrower agree that,
in paying any drawing under a Letter of Credit, the L/C Issuer shall not have
any responsibility to obtain any document (other than any sight draft,
certificate or document expressly required by such Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
L/C Issuer, any Agent-Related Person nor any of the respective correspondents,
participants or assignees of the L/C Issuer shall be liable to any Lender for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided that this assumption is not intended to, and shall
not, preclude the Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 3.5; provided that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by the L/C Issuer's willful
misconduct or gross negligence or the L/C Issuer's willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of
such Letter of Credit. In furtherance and not in limitation of the foregoing,
the L/C Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
Section 3.7 Cash Collateral. If, as of the Maturity Date, any Letter of
Credit may for any reason remain outstanding and partially or wholly undrawn,
the Borrower shall immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations. For purposes hereof, "Cash Collateralize" means to pledge
and deposit with or deliver to the Agent, for the benefit of the L/C Issuer and
the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Agent and the L/C
29
Issuer (which documents are hereby consented to by the Lenders). Derivatives of
such term have corresponding meanings. The Borrower hereby grants to the Agent,
for the benefit of the L/C Issuer and the Lenders, a security interest in all
such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, non-interest-bearing
deposit accounts at Bank of America.
Section 3.8 Applicability of ISP98. Unless otherwise specified in an
Existing Letter of Credit (or any renewal thereof) or expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit.
Section 3.9 Letter of Credit Fees. The Borrower shall pay to the Agent
for the account of each Lender in accordance with its Commitment Percentage a
Letter of Credit fee for each Letter of Credit equal to the Libor Rate Margin
times the daily maximum amount available to be drawn under such Letter of Credit
(whether or not such maximum amount is then in effect under such Letter of
Credit); provided that, while any Event of Default exists, the rate per annum
for Letter of Credit fees shall be increased by 2%. Such letter of credit fees
shall be computed on a quarterly basis in arrears. Such letter of credit fees
shall be due and payable (i) on each Quarterly Payment Date, commencing with the
first such date to occur after the issuance of such Letter of Credit, (ii) on
the Maturity Date, (iii) if any Letters of Credit are outstanding on the
Maturity Date, on the date on which the last of such Letters of Credit to be
outstanding expires or terminates and (iv) on the date on which the
Administrative Agent takes any action described in Section 13.2(a), (b) or (c)
(or on which any of such actions occurs automatically pursuant to the proviso to
Section 13.2) and thereafter on demand. If there is any change in the Libor Rate
Margin during any quarter, the daily maximum amount of each Letter of Credit
shall be computed and multiplied by the Libor Rate Margin separately for each
period during such quarter that such Applicable Rate was in effect.
Section 3.10 Fronting Fee and Documentary and Processing Charges Payable
to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit equal to 0.125% per
annum times the daily maximum amount available to be drawn on such Letter of
Credit, computed for each day such Letter of Credit is outstanding, payable (i)
on each Quarterly Payment Date, commencing with the first such date to occur
after the issuance of such Letter of Credit, (ii) on the Maturity Date, (iii) if
any Letters of Credit are outstanding on the Maturity Date, on the date on which
the last of such Letters of Credit to be outstanding expires or terminates and
(iv) on the date on which the Administrative Agent takes any action described in
Section 13.2(a), (b) or (c) (or on which any of such actions occurs
automatically pursuant to the proviso to Section 13.2) and thereafter on demand.
In addition, the Borrower shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.
30
Section 3.11 Conflict with Letter of Credit Application. In the event of
any conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
ARTICLE 4
Interest and Fees
Section 4.1 Interest Rate. The Borrower shall pay to the Agent, for the
account of each Lender (including Bank of America with respect to the Swingline
Advances), interest on the unpaid principal amount of the Loan made by such
Lender for the period commencing on the date of the initial advance under the
Loan to the date the Loan is due, at a fluctuating rate per annum equal to the
Applicable Rate. The term "Applicable Rate" means:
(a) during the period that the Loan or any portion thereof is
outstanding as a Base Rate Balance, the Base Rate, plus the Base Rate
Margin;
(b) during the period that the Revolving Loan or any portion
thereof is outstanding as a Libor Balance or as Libor Balances, the
Libor Rate, plus the Libor Rate Margin; and
(c) during the period that any Swingline Advance is outstanding
as an IBOR Balance or as IBOR Balances, the IBOR Rate, plus the IBOR
Rate Margin.
Section 4.2 Determinations of Margins and Commitment Fee Rate. From the
Closing Date to the first Margin Adjustment Date, the margins identified in
Section 4.1 shall be as follows: (a) the margin of interest payable with respect
to the Base Rate Balance (the "Base Rate Margin") shall be zero percent (0.00%);
(b) the margin of interest payable with respect to the Libor Balance (the "Libor
Rate Margin") shall be 0.875%; and (c) the margin of interest payable with
respect to the IBOR Balance (the "IBOR Rate Margin") shall be 0.875%. From the
Closing Date until the first Margin Adjustment Date, the percentage used to
determine fees payable under Section 4.6 (the "Commitment Fee Rate") shall be
0.175%. Upon delivery of the certificate required pursuant to Section 10.1(c)
after the end of each Fiscal Quarter commencing with such certificate delivered
for the Fiscal Quarter ending November 3, 2002, the Commitment Fee Rate, the
Base Rate Margin, the Libor Rate Margin and the IBOR Rate Margin shall
automatically be adjusted to the fee or rate, as applicable, corresponding to
the Leverage Ratio (determined for the preceding twelve (12) Fiscal Periods then
ending) of the Borrower set forth in the following table, such automatic
adjustment to take effect as of the first day of the calendar month following
the date on which such certificate is delivered (the "Margin Adjustment Date").
=========================================================================================
BASE RATE LIBOR RATE IBOR RATE COMMITMENT FEE
LEVERAGE RATIO MARGIN MARGIN MARGIN RATE
=========================================================================================
Greater than or equal to 0.00% 1.50% 1.50% 0.225%
3.25 to 1.00
-----------------------------------------------------------------------------------------
Greater than or equal to 0.00% 1.25% 1.25% 0.20%
3.00 to 1.00 but less than
3.25 to 1.00
-----------------------------------------------------------------------------------------
31
-----------------------------------------------------------------------------------------
Greater than or equal to 0.00% 1.00% 1.00% 0.20%
2.50 to 1.00 but less
than 3.00 to 1.00
-----------------------------------------------------------------------------------------
Greater than or equal to 0.00% 0.875% 0.875% 0.175%
2.00 to 1.00 but less
than 2.50 to 1.00
-----------------------------------------------------------------------------------------
Less than 2.00 to 1.00 0.00% 0.75% 0.75% 0.15%
=========================================================================================
If the Borrower fails to deliver such certificate with respect to any Fiscal
Quarter which sets forth the Leverage Ratio within the period of time required
by Section 10.1(c): (y) each of the Libor Rate Margin and the IBOR Rate Margin
(each for Interest Periods commencing after the applicable Margin Adjustment
Date) shall automatically be adjusted to one and one-half of one percent (1.50%)
per annum; and (z) the Commitment Fee Rate shall automatically be adjusted to
nine-fortieths of one percent (0.225%) per annum. The automatic adjustments
provided for in the preceding sentence shall take effect as of the date on which
the referenced certificate is due and shall remain in effect until otherwise
adjusted on the date such certificate is actually received in accordance
herewith.
Section 4.3 Payment Dates. Accrued interest on the Loan shall be due and
payable as follows: (a) in the case of the Base Rate Balance, on each Quarterly
Payment Date and on the Maturity Date; and (b) in the case of each Libor Balance
and each IBOR Balance, (i) on the last day of the Interest Period with respect
thereto, (ii) in the case of an Interest Period greater than three (3) months,
at three (3) month intervals after the first day of such Interest Period and
(iii) on the Maturity Date.
Section 4.4 Default Interest. Notwithstanding anything to the contrary
contained in this Agreement, during the existence of an Event of Default, the
Borrower will pay to the Agent for the account of each Lender interest at the
applicable Default Rate on any principal of the Loan made by such Lender and (to
the fullest extent permitted by law) any other amount payable by the Borrower
under any Loan Document to or for the account of the Agent or such Lender.
Section 4.5 Conversions and Continuations of Balances. Subject to
Section 5.2,
(a) with respect to Balances under the Revolving Loan, the
Borrower shall have the right from time to time to Convert all or part
of either the Base Rate Balance or the Libor Balance into a Balance of
the other Type or to Continue Libor Balances in existence as Libor
Balances, provided that: (i) the Borrower shall give the Agent notice of
each such Conversion or Continuation as provided in Section 5.3; (ii)
subject to Article 6, a Libor Balance may only be Converted on the last
day of the Interest Period therefor; and (iii) except for Conversions
into the Base Rate Balance, no Conversions or Continuations shall be
made without the consent of the Agent and the Required Lenders at any
time during the existence of a Default and
32
(b) with respect to Balances under the Swingline Advances, the
Borrower shall have the right from time to time to Convert all or part
of either the Base Rate Balance or the IBOR Balance into a Balance of
the other Type or to Continue IBOR Balances in existence as IBOR
Balances, provided that: (i) the Borrower shall give the Agent notice of
each such Conversion or Continuation as provided in Section 5.3; (ii)
subject to Article 6, an IBOR Balance may only be Converted on the last
day of the Interest Period therefor; and (iii) except for Conversions
into the Base Rate Balance, no Conversions or Continuations shall be
made without the consent of the Agent and Bank of America at any time
during the existence of a Default.
Section 4.6 Commitment Fee. For the period from the Closing Date to the
Maturity Date, the Borrower agrees to pay to the Agent for the account of each
Lender, pro rata according to its Commitment Percentage, a commitment fee equal
to the Commitment Fee Rate (determined according to the provisions of Section
4.2) multiplied by the actual daily amount by which the Commitments exceed the
Total Outstandings (excluding Swingline Advances for this purpose). Accrued
commitment fees under this Section shall be payable in arrears on each Quarterly
Payment Date and on the Maturity Date.
Section 4.7 Administrative Fee. The Borrower agrees to pay to the Agent
on the Closing Date and on each anniversary thereof the administrative fee
described in the Fee Letter.
Section 4.8 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including the first day
but excluding the last day) in the period for which interest is payable unless
such calculation would result in a rate that exceeds the Maximum Rate, in which
case interest shall be calculated on the basis of a year of 365 or 366 days, as
the case may be. Notwithstanding anything to the contrary contained in this
Section, interest payable by the Borrower hereunder and under the other Loan
Documents with respect to the Base Rate Balance shall be computed on the basis
of a year of 365 or 366 days, as the case may be, and the actual number of days
elapsed (including the first day but excluding the last day) in the period for
which interest is payable. Each determination of an interest rate by the Agent
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error. The Agent will, at the request of the Borrower or any Lender,
deliver to the Borrower or such Lender, as the case may be, a statement showing
the quotations used by the Agent in determining any interest rate and the
resulting interest rate.
ARTICLE 5
Administrative Matters
Section 5.1 Borrowing Procedure. The Borrower shall give the Agent, and
the Agent will give the Lenders, notice of each borrowing under the Commitments
in accordance with Section 5.3. Not later than 10:00 a.m. on the date specified
for each borrowing under the Commitment, each Lender will make available the
amount of the Loan to be advanced by it on such date to the Agent, at the
Principal Office, in immediately available funds, for the account of the
Borrower. The amounts received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by 1:00 p.m. at
the Borrower's direction by
33
transferring the same, in immediately available funds by wire transfer,
automated clearinghouse transfer or interbank transfer to (a) a bank account of
the Borrower designated by the Borrower in writing or (b) a Person or Persons
designated by the Borrower in writing; provided that if, on the date the notice
of borrowing with respect to such borrowing is given by the Borrower, there are
L/C Borrowings outstanding, then the proceeds of such borrowing shall be
applied, first, to the payment in full of any such L/C Borrowings, and second,
to the Borrower as provided above.
Section 5.2 Minimum Amounts. Each borrowing under the Commitments shall
be in an amount equal to $5,000,000 or an integral multiple of $1,000,000 in
excess thereof except that in the case of a Swingline Advance such borrowing may
be in an amount equal to $250,000 or an integral multiple of $250,000 in excess
thereof. Except for Conversions and prepayments pursuant to Section 5.4(a) and
Article 6, each Conversion and prepayment of principal of the Loan shall be in
an amount equal to the minimum amounts set forth in the preceding sentence.
Notwithstanding the foregoing, each borrowing or Continuation under the
Commitments as a Libor Balance or an IBOR Balance (as applicable) and each
Conversion of amounts outstanding as all or a portion of the Base Rate Balance
to a Libor Balance or an IBOR Balance (as applicable) shall be in an amount
equal to the minimum amounts set forth for borrowings in this Section.
Section 5.3 Certain Notices.
(a) Notices by the Borrower to the Agent of terminations or
reductions of Commitments, of borrowings, Conversions, Continuations and
prepayments of the Loan and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Agent not
later than 10:00 a.m. on the Business Day prior to the date of the
relevant termination, reduction, borrowing, Conversion, Continuation or
prepayment as specified below:
================================================================================
Notice Number of Business
Days Prior
================================================================================
Borrowing, Conversions, Continuations and prepayment of 0
Swingline Advances
--------------------------------------------------------------------------------
Borrowing of the Revolving Loan as all or a portion of the 1
Base Rate Balance
--------------------------------------------------------------------------------
Borrowing of the Revolving Loan as a Libor Balance 3
--------------------------------------------------------------------------------
Conversions or Continuations of Balances under the 3
Revolving Loan and termination or reduction of Commitments
--------------------------------------------------------------------------------
Prepayment of the Revolving Loan which is all or a portion 1
of the Base Rate Balance
--------------------------------------------------------------------------------
Prepayment of the Revolving Loan which is a Libor Balance 3
================================================================================
34
Any notices of the type described in this Section which are received by
the Agent after the applicable time set forth above on a Business Day
shall be deemed to be received and shall be effective on the next
Business Day. Each such notice of termination or reduction shall specify
the amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or prepayment shall be in
the form of Exhibit F, appropriately completed by an authorized
representative of the Borrower, and shall specify: (i) the amount of the
Loan to be borrowed or prepaid or the Balances to be Converted or
Continued; (ii) the amount (subject to Section 5.2) to be borrowed (and
whether any of such borrowing will be a Swingline Advance), Converted,
Continued or prepaid; (iii) in the case of a Conversion, the Type of
Balance to result from such Conversion; (iv) in the case of a borrowing,
the Type of Balance or Balances to be applicable to such borrowing and
the amounts thereof; (v) in the event a Libor Balance or an IBOR Balance
is selected, the duration of the Interest Period therefor; and (vi) the
date of borrowing, Conversion, Continuation or prepayment (which shall
be a Business Day).
(b) Any notices by the Borrower of the type described in this
Section may be made orally or in writing and, if made orally, must be
confirmed immediately in writing (which may be by telecopy, provided
that such telecopy is promptly followed by delivery of an original
signed notice) on the same Business Day on which such oral notice is
given; provided that any such oral notice shall be deemed to be
controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice. The Agent shall notify
the affected Lenders of the contents of each such notice on the date of
its receipt of the same or, if received after the applicable time set
forth above on a Business Day, on the next Business Day. In the event
the Borrower fails to select the Type of Balance applicable to a
borrowing of the Loan, or the duration of any Interest Period for any
Libor Balance or IBOR Balance, within the time period and otherwise as
provided in this Section, such Balance (if outstanding as a Libor
Balance or an IBOR Balance) will be automatically Converted into the
Base Rate Balance on the last day of the Interest Period for such Libor
Balance or IBOR Balance or (if outstanding as a portion of the Base Rate
Balance) will remain as, or (if not then outstanding) will be made as, a
portion of the Base Rate Balance. The Borrower may not borrow under the
Loan as a Libor Balance or an IBOR Balance, Convert any portion of the
Base Rate Balance into Libor Balances or IBOR Balances, Continue any
Libor Balance as a Libor Balance or Continue any IBOR Balance as an IBOR
Balance if the Applicable Rate for such Libor Balance or IBOR Balance
(as applicable) would exceed the Maximum Rate.
Section 5.4 Prepayments.
(a) Mandatory.
(i) Overadvance. If for any reason the Total Outstandings
at any time exceed the aggregate Commitments then in effect, the
Borrower shall, within one Business Day after the occurrence
thereof, prepay the Loan in an amount equal to such excess and/or
Cash Collateralize the L/C Obligations in an aggregate amount
equal to such excess or do a combination of the foregoing in an
aggregate amount
35
equal to such excess; provided that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to
this Section 5.4(a) unless after the prepayment in full of the
Loan the Total Outstandings exceed the aggregate Commitments then
in effect.
(ii) Prepayments from Asset Dispositions. Immediately upon
receipt by the Borrower or any of its Subsidiaries of the Net
Proceeds of any Asset Disposition, the Borrower shall make a
prepayment in respect of the Obligations equal to the amount of
such Net Proceeds of such Asset Disposition.
(iii) Prepayments from Debt Offerings. In the event that
the Borrower or any Subsidiary of the Borrower incurs any Funded
Debt (other than Debt permitted by Section 11.1), no later than
the third Business Day following the incurrence of such Debt, the
Borrower shall make a prepayment in respect of the Obligations
equal to the amount of the Net Proceeds of such Debt.
(iv) Swingline Advances. Within one (1) Business Day after
any demand therefor by the Agent or Bank of America, the Borrower
shall prepay in full the outstanding principal amount of the
Swingline Advances.
(v) Annual "Clean-up" Period. For a period of not less
than thirty (30) consecutive days during the period between each
December 1st and the following May 30th, the Borrower shall make
prepayments of the Loan to the extent that the outstanding
principal of the Loan shall be equal to or less than $50,000,000
at all times during such thirty (30) day period.
(b) Optional. Subject to Section 5.2 and the provisions of this
clause (b), the Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Agent as specified in
Section 5.3, prepay or repay the Loan in full or in part. Libor Balances
and IBOR Balances may be prepaid or repaid only on the last day of the
Interest Period applicable thereto unless the Borrower pays to the
Agent, for the account of the applicable Lenders or Lender, any amounts
due under Section 6.5 as a result of such prepayment or repayment.
Section 5.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest and other amounts to be made by the
Borrower under the Loan Documents shall be made to the Agent at the Principal
Office for the account of each Lender's Applicable Lending Office in Dollars and
in immediately available funds, without condition or deduction for any
counterclaim, defense, recoupment or set-off, not later than 12:00 noon on the
date on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day). Unless Bank of America expressly agrees otherwise and subject to
Section 5.4(a)(iv), all payments shall be applied as follows: first, with
respect to any outstanding L/C Borrowing until all L/C Borrowings have been paid
in full, second, with respect to the Base Rate Balance outstanding under the
Swingline Advances until such portion of the Loan is repaid in full, third, with
respect to the Base Rate Balance outstanding under the Revolving Loan until such
portion of the Loan is repaid in full and fourth, with respect to the IBOR
Balance outstanding under the Swingline Advances
36
until such portion of the Loan is paid in full. Subject to the preceding
sentence, the Borrower shall, at the time of making each such payment, specify
to the Agent the sums payable under the Loan Documents to which such payment is
to be applied (and in the event that the Borrower fails to so specify, or if an
Event of Default is in existence, the Agent may apply such payment to the
Obligations in such order and manner as it may elect (subject to the preceding
sentence) in its sole discretion, subject to Section 5.6 and provided that when
applying any such amounts to any Balances, the portion of the Loan outstanding
as the Base Rate Balance shall be prepaid in full prior to any application to
any portion of the Loan outstanding as a Libor Balance or an IBOR Balance). Each
payment received by the Agent under any Loan Document for the account of a
Lender shall be paid to such Lender by 1:00 p.m. on the date the payment is
deemed made to the Agent in immediately available funds, for the account of such
Lender's Applicable Lending Office. Whenever any payment under any Loan Document
shall be stated to be due on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and
commitment fee, as the case may be.
Section 5.6 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each advance of the Revolving Loan shall be made by the Lenders,
each payment of commitment fees under Section 4.6 and each termination or
reduction of the Commitments shall be made, paid or applied (as applicable) pro
rata according to the Lenders' respective Commitment Percentages; (b) the
making, Conversion and Continuation of Balances of a particular Type (other than
Conversions provided for by Section 6.4) shall be made pro rata among the
Lenders holding Balances of such Type according to their respective Commitment
Percentages; and (c) each payment and prepayment of principal of or interest on
the Revolving Loan by the Borrower shall be made to the Agent for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts
of the Revolving Loan held by each Lender; provided that as long as no default
in the payment of interest exists, payments of interest made when Lenders are
holding different types of Balances applicable to the Revolving Loan as a result
of the application of Section 6.4 shall be made to the Lenders in accordance
with the amount of interest owed to each. If at any time payment, in whole or in
part, of any amount distributed by the Agent hereunder is rescinded or must
otherwise be restored or returned by the Agent as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, then
each Person receiving any portion of such amount agrees, upon demand, to return
the portion of such amount it has received to the Agent.
Section 5.7 Sharing of Payments. If a Lender shall obtain, on account of
the portion of the Loan made by such Lender or the participations by such Lender
in L/C Obligations and Swingline Advances held by it, any payment (whether
voluntary, involuntary, by right of setoff or otherwise) in excess of its
ratable share (or other share contemplated hereunder) thereof, it shall promptly
purchase from the other Lenders participations in the portions of the Loan made
by them and/or subparticipations in the participations in L/C Obligations and
Swingline Advances held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share such excess payment pro rata with each of
them. To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any Lender so purchasing a participation in
accordance with this Section may exercise
37
all rights of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation. Nothing contained herein
shall require any Lender to exercise any such right or shall affect the right of
any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness, liability or obligation of the Borrower.
Section 5.8 Non-Receipt of Funds by the Agent.
(a) Unless the Borrower or any Lender (as used in this Section,
the "Payor") has notified the Agent prior to the date any payment to be
made by the Payor is due, that the Payor does not intend to remit such
payment, the Agent may, in its sole and absolute discretion, assume that
the Payor has timely remitted such payment and the Agent may (but shall
not be required to), in its sole and absolute discretion and in reliance
thereon, make available such payment to the Person entitled thereto. If
such payment was not in fact remitted to the Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Agent the amount of
such assumed payment made available to such Lender in immediately
available funds, together with interest thereon in respect of
each day from the date such amount was made available by the
Agent to such Lender to the date such amount is repaid to the
Agent in immediately available funds at the Federal Funds Rate;
and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Agent the amount
thereof in immediately available funds, together with interest
thereon for the period from the date such amount was made
available by the Agent to the Borrower to the date such amount is
recovered by the Agent (the "Compensation Period") at a rate per
annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Agent, then such
amount shall constitute such Lender's portion of the Loan
included in the applicable Balance. If such Lender does not pay
such amount forthwith upon the Agent's demand therefor, the Agent
may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Agent, together with interest
thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Balance.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights
which the Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice by the Agent to any Payor with respect to any amount owing
under this Section shall be conclusive, absent manifest error.
(b) The Commitments and other obligations of the Lenders under
any Loan Document are several and not joint. The default by any Lender
in making an advance under the Revolving Loan or to fund any
participation hereunder on any date required hereunder in accordance
with its Commitment shall not relieve the other Lenders of their
obligations under any Loan Document. In the event of any default by any
Lender in
38
making any advance under the Revolving Loan, each nondefaulting Lender
shall be obligated to make its advance under the Revolving Loan but
shall not be obligated to advance the amount which the defaulting Lender
was required to advance hereunder. No Lender shall be responsible for
any act or omission of any other Lender.
ARTICLE 6
Change in Circumstances
Section 6.1 Increased Cost and Reduced Return.
(a) Increased Cost. If, after the Closing Date, any Regulatory
Change or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any Governmental Authority, central bank or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty or other charge with respect to any
Libor Balances or IBOR Balances, its Note or its obligation to
make Libor Balances or IBOR Balances available to the Borrower or
(as the case may be) issuing or participating in Letters of
Credit, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this
Agreement or its Note in respect of any Libor Balances or IBOR
Balances (other than franchise taxes or taxes imposed on or
measured by the net income of such Lender by the jurisdiction in
which such Lender is organized, has its principal office or such
Applicable Lending Office or is doing business);
(ii) shall impose, modify or deem applicable any reserve,
special deposit, assessment or similar requirement (other than
the Eurodollar Reserve Percentage utilized in the determination
of the Libor Rate or the IBOR Rate) relating to any extensions of
credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable
Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office), the London interbank market or the offshore
interbank market (with respect to the IBOR Rate) any other
condition affecting this Agreement or its Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing or maintaining any Libor Balances or IBOR Balances or to
reduce any sum received or receivable by such Lender (or its Applicable
Lending Office) under this Agreement or its Note with respect to any
Libor Balances or IBOR Balances, then the Borrower shall pay to such
Lender on demand such amount or amounts as will compensate such Lender
for such increased cost or reduction. If any Lender requests
compensation by the Borrower under this Section 6.1(a), the Borrower
may, by notice to such Lender (with a copy to the Agent),
39
suspend the obligation of such Lender to make or maintain Libor Balances
or IBOR Balances, or to Convert any portion of the Base Rate Balances
into Libor Balances or IBOR Balances, until the event or condition
giving rise to such request ceases to be in effect (in which case the
provisions of Section 6.4 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
have determined that any Regulatory Change has or would have the effect
of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Lender to be material,
then from time to time upon demand, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender
for such reduction.
(c) Claims Under this Section 6.1. Each Lender shall promptly
notify the Borrower and the Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 6.1 and will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 6.1 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount
or amounts to be paid to it hereunder, which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
Section 6.2 Limitation on Libor Balances and IBOR Balances. If on or
prior to the first day of any Interest Period for any Libor Balance or IBOR
Balance:
(a) the Agent (with respect to the Libor Rate) or Bank of America
(with respect to the IBOR Rate) determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Libor Rate or the IBOR Rate, as applicable, for such Interest Period;
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Libor Rate will not adequately
and fairly reflect the cost to the Lenders of funding Libor Balances for
such Interest Period; or
(c) Bank of America determines (which determination shall be
conclusive) and notifies the Agent that the IBOR Rate will not
adequately and fairly reflect the cost to Bank of America of funding
IBOR Balances for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
amounts or periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make
40
additional Libor Balances or IBOR Balances (as applicable) available to the
Borrower, Continue Libor Balances or IBOR Balances (as applicable) or to Convert
any portion of the Base Rate Balance into Libor Balances or IBOR Balances (as
applicable) and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Libor Balances or IBOR Balances (as
applicable), either prepay such Libor Balances or IBOR Balances (as applicable)
or Convert such Libor Balances or IBOR Balances (as applicable) into the Base
Rate Balance in accordance with the terms of this Agreement.
Section 6.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain or fund Libor Balances or IBOR
Balances (as applicable) hereunder, then such Lender shall promptly notify the
Borrower and the Agent thereof and such Lender's obligation to make or Continue
Libor Balances or IBOR Balances (as applicable) and to Convert any portion of
the Base Rate Balance into Libor Balances or IBOR Balances (as applicable) shall
be suspended until such time as such Lender may again make, maintain and fund
Libor Balances or IBOR Balances (as applicable) (in which case the provisions of
Section 6.4 shall be applicable).
Section 6.4 Treatment of Affected Balances. If the obligation of any
Lender to make a particular Libor Balance or IBOR Balance (as applicable)
available to the Borrower or to Continue or to Convert any portion of the Base
Rate Balance into, Libor Balances or IBOR Balances (as applicable) shall be
suspended pursuant to Section 6.1 or Section 6.3 (Balances of such Type being
herein called "Affected Balances"), such Lender's Affected Balances shall be
automatically Converted into the Base Rate Balances on the last day(s) of the
then current Interest Period(s) for the Affected Balances (or, in the case of a
Conversion required by Section 6.3, on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 6.1 or Section 6.3 that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Balances have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Balances shall be applied
instead to its Base Rate Balance; and
(b) all advances under the Loan that would otherwise be made or
Continued by such Lender as Libor Balances or IBOR Balances (as
applicable) shall be made or Continued instead as part of the Base Rate
Balance, and all portions of the Base Rate Balance of such Lender that
would otherwise be Converted into Libor Balances or IBOR Balances (as
applicable) shall remain as all or a portion of the Base Rate Balance.
With respect to amounts outstanding under the Revolving Loan, if such Lender
gives notice to the Borrower (with a copy to the Agent) that the circumstances
specified in Section 6.1 or Section 6.3 that gave rise to the Conversion of such
Lender's Affected Balances no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Libor Balances
made by other Lenders are outstanding, such Lender's Base Rate Balance shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Libor Balances, to the extent necessary so that,
after giving effect thereto, all Balances held by the Lenders holding Libor
Balances and by such Lender are held pro rata (as to
41
principal amounts, Types and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 6.5 Compensation. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense (including loss of anticipated profits, reemployment of funds obtained
to maintain any Balance, from fees payable to terminate the deposits from which
such funds were obtained, any customary administrative fees charged by the
Lender in connection with the foregoing and any such amounts incurred in
connection with syndication of the Loan) incurred by it as a result of:
(a) any payment, prepayment or Conversion by the Borrower of a
Libor Balance or an IBOR Balance for any reason (including the
acceleration of the Loan pursuant to Section 13.2) on a date other than
the last day of the Interest Period for such Libor Balance or IBOR
Balance; or
(b) any failure by the Borrower for any reason (including the
failure of any condition precedent specified in Article 8 to be
satisfied) to borrow, Convert, Continue or prepay a Libor Balance or an
IBOR Balance on the date for such borrowing, Conversion, Continuation or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation or Conversion under this Agreement.
Notwithstanding the foregoing provisions of this Section 6.5, if at any time the
mandatory prepayment of the Loan pursuant to Section 5.4(a) would result in the
Borrower incurring breakage costs under this Section 6.5 as a result of Libor
Balances or IBOR Balances being prepaid other than on the last day of an
Interest Period applicable thereto (collectively, the "Affected Libor/IBOR
Balances"), then the Borrower may in its sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected Libor/IBOR Balances with the Agent (which deposit, after
giving effect to interest to be earned on such deposit prior to the last day of
the relevant Interest Periods, must be equal in amount to the amount of Affected
Libor/IBOR Balances not immediately prepaid) to be held as security for the
obligations of the Borrower hereunder pursuant to a cash collateral agreement to
be entered into in form and substance satisfactory to the Agent, with such cash
collateral to be directly applied upon the first occurrence (or occurrences)
thereafter of the last day of an Interest Period applicable to the Affected
Libor/IBOR Balances (or such earlier date or dates as shall be requested by the
Borrower), to repay an aggregate principal amount of the Loan equal to the
Affected Libor/IBOR Balances not initially repaid pursuant to this sentence.
Section 6.6 Taxes.
(a) Withholding Taxes. Except as otherwise provided in this
Agreement, any and all payments by the Borrower or any Guarantor to or
for the account of any Lender or the Agent hereunder or under any other
Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings and all liabilities with respect
thereto, excluding, in the case of each Lender or the Agent (as
applicable), taxes imposed on or measured by its income and franchise
taxes imposed on it by the jurisdiction under the laws of which
42
such Lender (or its Applicable Lending Office) or the Agent (as the case
may be) is organized, located or doing business or any political
subdivision thereof, and excluding in the case of any Foreign Lender
taxes arising as a result of such Lender's failure to comply with
Section 15.22 (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower or any Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum
payable under any Loan Document to any Lender or the Agent (as
applicable), (i) 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 6.6) such Lender or the Agent
(as applicable) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or any
Guarantor, as applicable, shall make such deductions, (iii) the Borrower
or any Guarantor, as applicable, shall pay the full amount deducted to
the relevant taxing authority or other authority in accordance with
applicable law and (iv) the Borrower or any Guarantor, as applicable,
shall furnish to the Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from
any payment made under this Agreement or any other Loan Document or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document ("Other Taxes").
(c) Tax Indemnification. THE BORROWER AGREES TO INDEMNIFY EACH
LENDER AND THE AGENT-RELATED PERSONS FOR THE FULL AMOUNT OF TAXES AND
OTHER TAXES (INCLUDING ANY "TAXES" OR "OTHER TAXES" IMPOSED OR ASSERTED
BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 6.6) PAID BY
SUCH LENDER OR ANY AGENT-RELATED PERSON (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM
OR WITH RESPECT THERETO, OTHER THAN PENALTIES, ADDITIONS TO TAX,
INTEREST AND EXPENSES ARISING AS A RESULT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT ON THE PART OF SUCH LENDER OR AGENT-RELATED PERSON AND ANY
TAXES ARISING AS A RESULT OF THE FAILURE OF ANY FOREIGN LENDER TO COMPLY
WITH THE TERMS OF SECTION 15.22.
ARTICLE 7
Guaranties
Section 7.1 Guaranties. Each Domestic Subsidiary of the Borrower in
existence as of the Closing Date and any other Subsidiary of the Borrower which
at any time Guarantees the indebtedness, liabilities and obligations of the
Borrower under the Note Agreement (or any Debt of the Borrower or any Domestic
Subsidiary permitted under Section 11.1(k)) shall guarantee payment and
performance of the Obligations pursuant to the Subsidiary Guaranty.
Additionally, the Borrower shall cause one or more of its other Domestic
Subsidiaries (if any) to Guarantee (by
43
means of the execution and delivery of a Joinder Agreement) payment and
performance of the Obligations pursuant to the Subsidiary Guaranty as follows:
(a) in the event that any Domestic Subsidiary of the Borrower which is not a
Guarantor has assets of a net book value in excess of $10,000,000 or gross
revenue for the most recently completed four (4) Fiscal Quarters in excess of
$10,000,000, the Borrower shall cause such Domestic Subsidiary to become a
Guarantor as provided by Section 7.2 and (b) in the event that the Borrower's
Domestic Subsidiaries which are not previously Guarantors hereunder have assets,
in the aggregate for all such Domestic Subsidiaries, of a net book value in
excess of $75,000,000 or gross revenue for the most recently completed four (4)
Fiscal Quarters in excess of $75,000,000, the Borrower shall cause one or more
of such Subsidiaries to become Guarantors as provided by Section 7.2 with the
effect that the assets and gross revenue of the remaining Domestic Subsidiaries
of the Borrower which are not Guarantors hereunder do not exceed $75,000,000 as
of such date.
Section 7.2 New Guarantors. In the event that the Borrower is required
to cause one or more of its Subsidiaries to become Guarantors as set forth in
Section 7.1, such new Guarantor or Guarantors (as the case may be) shall,
contemporaneously with the delivery of the financial statements required by
Section 10.1(a) and Section 10.1(b), execute and deliver to the Agent a Joinder
Agreement pursuant to which each such Subsidiary of the Borrower becomes a
Guarantor under this Agreement and such other certificates and documentation,
including the items otherwise required pursuant to Section 8.1, as the Agent may
reasonably request.
ARTICLE 8
Conditions Precedent
Section 8.1 Conditions to Effectiveness. This Agreement shall become
effective on the date (the "Closing Date") each of the conditions precedent set
forth in this Section 8.1 has been satisfied or waived with the consent of the
Lenders (or, with respect to Sections 8.1(a)(xiii) and 8.1(b), with the consent
of the Persons entitled to receive payment). The effectiveness of this Agreement
is subject to the conditions that the Agent shall have received all of the
following in form and substance satisfactory to the Agent and each Lender, and
(except for the Notes) in sufficient copies for the Agent and each Lender:
(a) Deliveries. The Agent shall have received on or before the
Closing Date all of the following, each dated (unless otherwise
indicated) the Closing Date, in form and substance satisfactory to the
Agent and the Lenders:
(i) Resolutions; Authority. For each of the Borrower and
the Guarantors, resolutions of its board of directors (or similar
governing body) certified by its Secretary or an Assistant
Secretary which authorize its execution, delivery and performance
of the Loan Documents to which it is or is to be a party;
(ii) Incumbency Certificate. For each of the Borrower and
the Guarantors, a certificate of incumbency certified by the
Secretary or an Assistant Secretary certifying the names of its
officers (A) who are authorized to sign the Loan Documents to
which it is or is to be a party (including the certificates
contemplated herein) together with specimen signatures of each
such officer and
44
(B) who will, until replaced by other officers duly authorized
for that purpose, act as its representatives for the purposes of
signing documentation and giving notices and other communications
in connection with this Agreement and the transactions
contemplated hereby;
(iii) Organizational Documents. For each of the Borrower
and the Guarantors, the certificate of incorporation, certificate
of formation, certificate of limited partnership or other similar
document certified by the Secretary of State of the state of its
incorporation, formation or organization and dated a current date
(or, in lieu thereof, a certification from the Secretary of such
Person that such document has not changed from a certified copy
thereof previously delivered to the Agent);
(iv) Bylaws. For each of the Borrower and the Guarantors,
the bylaws, operating agreement, partnership agreement or similar
agreement certified by its Secretary or an Assistant Secretary
(or, in lieu thereof, a certification from the Secretary of such
Person that such document has not changed from a certified copy
thereof previously delivered to the Agent);
(v) Governmental Certificates. For each of the Borrower
and the Guarantors, certificates (dated within thirty (30) days
of the Closing Date) of the appropriate Governmental Authorities
of the state of incorporation, formation or organization as to
its existence and, to the extent applicable, good standing;
(vi) Credit Agreement. This Agreement, together with all
Schedules, Exhibits and other attachments (if any), duly executed
by the Borrower, the Agent, the L/C Issuer and the Lenders;
(vii) [intentionally left blank];
(viii) Notes. The Revolving Notes and the Swingline Note
executed by the Borrower;
(ix) Subsidiary Guaranty. A written confirmation of the
Subsidiary Guaranty executed by each of the Guarantors party
thereto prior to the date hereof and a Joinder Agreement from
each Domestic Subsidiary not a party thereto prior to the date
hereof;
(x) Certificate of Compliance. A certificate of the chief
financial officer or the Vice President, Finance of the Borrower
setting forth a calculation of the financial covenants in Section
12.1, Section 12.2 and Section 12.3 as of the Borrower's Fiscal
Quarter ended August 4, 2002 and stating that the conditions in
Section 8.2 have been satisfied;
(xi) Consents. Copies of all material consents or waivers
necessary for the execution, delivery and performance by the
Borrower and each Guarantor of the Loan Documents to which it is
a party, as the Agent may require;
45
(xii) Opinions of Counsel. Satisfactory opinions of legal
counsel to the Borrower and the Guarantors as to such matters as
the Agent may request; and
(xiii) Fees. Payment of all fees payable to the Lenders
including those fees set forth in the Fee Letter;
(b) Attorney Costs. The Attorney Costs referred to in Section
15.1 for which statements have been presented shall have been paid in
full (or shall be paid with the proceeds of the initial advance under
the Loan made on the Closing Date);
(c) No Material Adverse Change. As of the Closing Date, no
material adverse change shall have occurred with respect to (i) the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Borrower
(individually) or the Borrower and its Subsidiaries (taken as a whole)
since February 3, 2002 or (ii) in the facts and information regarding
such Persons disclosed to the Agent and the Lenders prior to the Closing
Date; and
(d) Additional Documentation. The Agent and the Lenders shall
have received such additional approvals, opinions or other documentation
as the Agent, the L/C Issuer or any Lender may reasonably request.
Section 8.2 All Advances. The obligation of each Lender to make any
advance under the Loan (including the initial advance) and the obligation of the
L/C Issuer to make any L/C Credit Extension (including the initial L/C Credit
Extension) is subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing,
or would result from such Loan;
(b) Representations and Warranties. All of the representations
and warranties contained in Article 9 and in the other Loan Documents
shall be true and correct in all material respects on and as of the date
of such Loan or L/C Credit Extension with the same force and effect as
if such representations and warranties had been made on and as of such
date except to the extent that such representations and warranties
relate specifically to another date; and
(c) No Material Adverse Change. No material adverse change shall
have occurred with respect to the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise) or
prospects of the Borrower (individually) or the Borrower and its
Subsidiaries (taken as a whole) since February 3, 2002.
Each notice of borrowing and request for an L/C Credit Extension by the Borrower
hereunder shall constitute a representation and warranty by the Borrower that
the conditions precedent set forth in this Section 8.2 have been satisfied (both
as of the date of such notice and, unless the Borrower otherwise notifies the
Agent prior to the date of such borrowing or L/C Credit Extension, as
applicable, as of the date of such borrowing or L/C Credit Extension).
46
ARTICLE 9
Representations and Warranties
To induce the Agent and the Lenders to enter into this Agreement, the
Borrower represents and warrants that the following statements are, and after
giving effect to the transactions contemplated hereby will be, true, correct and
complete:
Section 9.1 Existence, Power and Authority.
(a) The Borrower and each of its Subsidiaries: (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (ii) has all requisite power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a
Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries has the power and
authority to execute, deliver and perform its respective obligations
under the Loan Documents to which it is or may become a party.
Section 9.2 Financial Condition.
(a) Financial Statements. The Borrower has delivered to the Agent
and each Lender (i) audited financial statements of the Borrower and its
Subsidiaries as of and for the Fiscal Years ended January 30, 2000,
January 28, 2001 and February 3, 2002 and (ii) unaudited financial
statements of the Borrower and its Subsidiaries as of and for the
portion of the current (as of the date hereof) Fiscal Year through the
period ended August 4, 2002. Such financial statements have been
prepared in accordance with GAAP (subject to year-end audit adjustments
and the inclusion of footnotes in the case of the financial statements
described in clause (ii) preceding), and present fairly the financial
condition of the Borrower and its Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective
periods indicated therein. Neither the Borrower nor any of its
Subsidiaries has any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments except as referred
to or reflected in the financial statements referred to in clause (ii)
preceding. Since the date of the financial statements referred to in
clause (ii) preceding, no material adverse change has occurred with
respect to the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of the
Borrower (individually) or of the Borrower and its Subsidiaries (taken
as a whole).
(b) Projections. The Projections delivered and to be delivered by
the Borrower to the Agent and included in the Offering Memorandum and
the Projections to be delivered by the Borrower pursuant to Section
10.1(a) have been and will be prepared by the Borrower in light of the
past operation of the business of the Borrower and its Subsidiaries. All
such Projections represent, as of the date thereof, a good faith
estimate
47
by the Borrower and its senior management of the financial conditions
and performance of the Borrower and its Subsidiaries based on
assumptions believed to be reasonable at the time made (provided that
the performance of the Borrower and its Subsidiaries may vary from such
Projections).
Section 9.3 Corporate and Similar Action; No Breach. The execution,
delivery and performance by the Borrower and each of its Subsidiaries of the
Loan Documents to which it is or may become a party, compliance with the terms
and provisions thereof, the issuance of Letters of Credit, the borrowings
hereunder and the use of proceeds thereof have been duly authorized by all
requisite action on the part of the Borrower and each of its Subsidiaries,
respectively, and do not and will not (a) violate or conflict with, or result in
a breach of, or require any consent under (i) the articles of incorporation,
bylaws or other organizational documents (as applicable) of such Person, (ii)
any applicable law, rule or regulation or any order, writ, injunction or decree
of any Governmental Authority or arbitrator or (iii) any agreement or instrument
to which such Person is a party or by which any of them or any of their property
is bound or subject or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of such Person.
Section 9.4 Operation of Business. Each of the Borrower and its
Subsidiaries possesses all material licenses, Permits, franchises, patents,
copyrights, trademarks and tradenames or rights thereto necessary to conduct its
business substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing where such
violation could be expected to have a Material Adverse Effect. Except as set
forth in Schedule 9.4, since February 3, 2002, the Borrower and its Subsidiaries
have conducted their respective businesses only in the ordinary and usual
course.
Section 9.5 Litigation and Judgments. Except as set forth in Schedule
9.5, there is no action, suit, investigation or proceeding before or by any
Governmental Authority or arbitrator pending or threatened against or affecting
the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect. As of the Closing Date, except as set forth in
Schedule 9.5, there are no outstanding judgments against the Borrower or any of
its Subsidiaries.
Section 9.6 Rights in Properties; Liens. The Borrower and each of its
Subsidiaries has good title to or valid leasehold interests in its respective
Properties, real and personal, and none of such Properties or leasehold
interests of the Borrower or any of its Subsidiaries is subject to any Lien,
except as permitted by Section 11.2.
Section 9.7 Enforceability. The Loan Documents to which the Borrower or
any Subsidiary of the Borrower is a party, when executed and delivered, shall
constitute the legal, valid and binding obligations of the Borrower or such
Subsidiary, as applicable, enforceable against such Person in accordance with
their respective terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to the enforcement of creditors' rights and
general principles of equity.
48
Section 9.8 Approvals. No authorization, approval or consent of, and no
filing or registration with, any Governmental Authority or other third party is
or will be necessary for the execution, delivery or performance by the Borrower
or any Subsidiary of the Borrower of the Loan Documents to which it is or may
become a party, except where the failure to obtain any such authorization,
approval or consent could not reasonably be expected to have a Material Adverse
Effect, or for the validity or enforceability thereof.
Section 9.9 Debt. Neither the Borrower nor any of its Subsidiaries has
any Debt, except as set forth in Schedule 9.9 or as otherwise permitted by
Section 11.1.
Section 9.10 Taxes. Except as set forth in Schedule 9.10 or, after the
Closing Date, matters which do not violate Section 10.4, the Borrower and each
Subsidiary of the Borrower have filed all tax returns (federal, state and local)
required to be filed, including all income, franchise, employment, property and
sales tax returns, and have paid all of their respective liabilities for taxes,
assessments, governmental charges and other levies that are due and payable
other than those being contested in good faith by appropriate proceedings
diligently pursued for which adequate reserves have been established in
accordance with GAAP. Except as set forth in Schedule 9.10 or, after the Closing
Date, matters which do not violate Section 10.4, there is no pending
investigation of the Borrower or any Subsidiary of the Borrower by any taxing
authority with respect to any liability for tax or of any pending but unassessed
tax liability of the Borrower or any Subsidiary of the Borrower.
Section 9.11 Margin Securities. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying margin
stock (within the meaning of Regulation U or Regulation T or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of the
Loan will be used to buy or carry any margin stock or to extend credit to others
for the purpose of buying or carrying margin stock.
Section 9.12 ERISA. With respect to each Plan, the Borrower and each
Subsidiary of the Borrower is in compliance with all applicable provisions of
ERISA. Neither a Reportable Event nor a Prohibited Transaction has occurred and
is continuing with respect to any Plan. No notice of intent to terminate a Plan
has been filed, nor has any Plan been terminated. As of the Closing Date, no
circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings. Neither the Borrower, any of its
Subsidiaries nor any ERISA Affiliate has completely or partially withdrawn from
a Multiemployer Plan. The Borrower, each Subsidiary of the Borrower and each
ERISA Affiliate have met their minimum funding requirements under ERISA with
respect to each Plan. Except as set forth in Schedule 9.12, the present value of
all vested benefits under each Plan do not exceed the fair market value of all
Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA. Neither the Borrower,
any of its Subsidiaries nor any ERISA Affiliate has any outstanding liability to
the PBGC under ERISA (other than liability for the payment of PBGC premiums in
the ordinary course of business).
Section 9.13 Disclosure. All factual information furnished by or on
behalf of the Borrower or any Subsidiary of the Borrower to the Agent or any
Lender for purposes of or in
49
connection with this Agreement, the other Loan Documents or any transaction
contemplated herein or therein is, and all other such factual information
hereafter furnished by or on behalf of the Borrower or any Subsidiary of the
Borrower to the Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
Section 9.14 Subsidiaries; Capitalization. As of the Closing Date, the
Borrower has no other Subsidiaries other than those listed in Schedule 9.14. As
of the Closing Date, Schedule 9.14 sets forth the jurisdiction of incorporation
or organization of the Borrower and its Subsidiaries, the percentage of the
Borrower's ownership of the outstanding Voting Stock of each Subsidiary of the
Borrower, and the authorized, issued and outstanding Capital Stock of the
Borrower and each Subsidiary of the Borrower. All of the outstanding Capital
Stock of the Borrower and its Subsidiaries has been validly issued, is fully
paid, is nonassessable and has not been issued in violation of any preemptive or
similar rights. As of the Closing Date, except as disclosed in Schedule 9.14,
there are (a) no outstanding subscriptions, options, warrants, calls or rights
(including preemptive rights) to acquire, and no outstanding securities or
instruments convertible into, Capital Stock of the Borrower or any of its
Subsidiaries and (b) no shareholder agreements, voting trusts or similar
agreements in effect and binding on any shareholder of (i) to the Borrower's
knowledge, the Borrower or any of its Capital Stock or (ii) any Subsidiary of
the Borrower or any of their respective Capital Stock. All shares of Capital
Stock of the Borrower and its Subsidiaries were issued in compliance with all
applicable state and federal securities laws.
Section 9.15 Material Agreements. Except as set forth in Schedule 9.15,
neither the Borrower nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction that could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries is in default, or has knowledge of facts or circumstances that with
the giving of notice or passage of time or both could be expected to result in a
default, in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument (including any indenture, loan or credit agreement, or any lease or
other similar agreement or instrument) to which it is a party where such default
could be expected to cause a Material Adverse Effect.
Section 9.16 Compliance with Laws. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, rule, regulation, order or decree of
any Governmental Authority or arbitrator except for violations which could not
be expected to have a Material Adverse Effect.
Section 9.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940.
Section 9.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company" or a "subsidiary company" of
a "holding company" or an
50
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935.
Section 9.19 Environmental Matters.
Except as disclosed on Schedule 9.19:
(a) to the Borrower's knowledge, the Borrower, each Subsidiary of
the Borrower, and all of their respective properties, assets and
operations are in compliance with all Environmental Laws; neither the
Borrower nor any of its Subsidiaries has knowledge of, nor has the
Borrower or any Subsidiary of the Borrower received notice of, any past,
present or future condition, event, activity, practice or incident which
interferes with or prevents the compliance or continued compliance of
the Borrower or its Subsidiaries with all Environmental Laws;
(b) the Borrower and its Subsidiaries have obtained and
maintained, and are in material compliance with, all material Permits,
licenses and authorizations that are required under applicable
Environmental Laws;
(c) except in compliance in all material respects with applicable
Environmental Laws, during the course of the Borrower's or any of its
Subsidiaries' ownership of or operations on any real Property, there has
been no generation, treatment, recycling, storage or disposal of
hazardous waste, as that term is defined in 40 CFR Part 261 or any state
equivalent, use of underground storage tanks or surface impoundments,
use of asbestos-containing materials or use of polychlorinated biphenyls
(PCB) in hydraulic oils, electrical transformers or other equipment that
could reasonably be expected to have a Material Adverse Effect, and the
use which the Borrower and its Subsidiaries make and intend to make of
their respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal or Release
of any Hazardous Material on, in or from any of their properties or
assets that could reasonably be expected to have a Material Adverse
Effect;
(d) neither the Borrower, any of its Subsidiaries, nor any of
their respective currently or previously owned or leased Properties or
operations is subject to any outstanding or, to their knowledge,
threatened order from or agreement with any Governmental Authority or
other Person or subject to any judicial or administrative proceeding
with respect to (i) failure to comply with Environmental Laws, (ii)
Remedial Action or (iii) any Environmental Liabilities arising from a
Release or threatened Release;
(e) there are no conditions or circumstances associated with the
currently or previously owned or leased Properties or operations of the
Borrower or any Subsidiary of the Borrower that could reasonably be
expected to result in any Environmental Liabilities or to have a
Material Adverse Effect;
(f) neither the Borrower nor any of its Subsidiaries is or
operates a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the regulations thereunder or any comparable
51
provision of state law, and except as would not reasonably be expected
to have a Material Adverse Effect, each of the Borrower and each
Subsidiary of the Borrower is in compliance with all applicable
financial responsibility requirements of all applicable Environmental
Laws;
(g) neither the Borrower nor any of its Subsidiaries has filed or
failed to file any notice required under applicable Environmental Law
reporting an unauthorized Release; and
(h) no Lien arising under any Environmental Law has attached to
any property or revenues of the Borrower or any Subsidiary of the
Borrower.
Section 9.20 Broker's Fees. Except as disclosed on Schedule 9.20, no
broker's or finder's fee, commission or similar compensation will be payable by
the Borrower or any Subsidiary of the Borrower with respect to the transactions
contemplated by this Agreement.
Section 9.21 Employee Matters. Except as set forth on Schedule 9.21, as
of the Closing Date (a) neither the Borrower nor any of its Subsidiaries, nor
any of their respective employees, is subject to any collective bargaining
agreement, (b) no petition for certification or union election is pending with
respect to the employees of the Borrower or any Subsidiary of the Borrower and
no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of the Borrower or any Subsidiary of
the Borrower and (c) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of the Borrower and the
Subsidiaries of the Borrower after due inquiry, threatened between the Borrower
or any Subsidiary of the Borrower and its respective employees.
Section 9.22 Solvency. Each of the Borrower and the Subsidiary
Guarantors, individually and on a consolidated basis, is Solvent.
ARTICLE 10
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit shall remain outstanding (unless such Letter of Credit is
Cash Collateralized in full), it will perform and observe the following
covenants:
Section 10.1 Reporting Requirements. The Borrower will furnish to the
Agent and each Lender:
(a) Annual Financial Statements and Projections. As soon as
available, and in any event within ninety (90) days after the end of
each Fiscal Year of the Borrower: (i) a copy of the annual audit report
of the Borrower for such Fiscal Year containing, on a consolidated
basis, a balance sheet and statements of income, retained earnings and
cash flows as at the end of such Fiscal Year and for the Fiscal Year
then ended, in each case setting forth in comparative form the figures
for the preceding Fiscal Year, all in reasonable detail and audited and
certified on an unqualified basis by Deloitte & Touche
52
LLP or by other independent certified public accountants of recognized
standing selected by the Borrower and reasonably acceptable to the
Agent, to the effect that such report has been prepared in accordance
with GAAP; (ii) a copy of the annual unaudited report of the Borrower
and its Subsidiaries for such Fiscal Year containing, on a consolidating
basis balance sheets and statements of income, retained earnings and
cash flows as at the end of such Fiscal Year and for the Fiscal Year
then ended, in each case setting forth in comparative form the figures
for the preceding Fiscal Year, and in reasonable detail certified by the
chief financial officer or Vice President, Finance of the Borrower to
have been prepared in accordance with GAAP and to fairly present the
financial condition and results of operation of the Borrower and its
Subsidiaries, on a consolidating basis at the date and for the Fiscal
Year then ended; and (iii) a copy of Projections for the Borrower's
Fiscal Year immediately following the Fiscal Year which is the subject
of the financial statements delivered pursuant to clause (i) preceding;
(b) Quarterly Financial Statements. As soon as available, and in
any event within forty-five (45) days after the end of each of the first
three Fiscal Quarters of each Fiscal Year of the Borrower, beginning
with the Fiscal Quarter ending August 4, 2002, a copy of an unaudited
financial report of the Borrower and its Subsidiaries as of the end of
such Fiscal Quarter and for the portion of the Fiscal Year then ended
containing, on a consolidated basis, a balance sheet and statements of
income, retained earnings and cash flows, in each case setting forth in
comparative form the figures for the corresponding period of the
preceding Fiscal Year, all in reasonable detail certified by the chief
financial officer or Vice President, Finance of the Borrower to have
been prepared in accordance with GAAP and to fairly present the
financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis, at the date and for the periods
indicated therein, subject to year-end audit adjustments and the
inclusion of footnotes;
(c) Compliance Certificate. As soon as available, and in any
event accompanying the financial statements delivered in accordance with
Section 10.1(a) and Section 10.1(b), a Compliance Certificate, together
with schedules setting forth the calculations supporting the
computations therein;
(d) Notice of Litigation, Etc. Promptly after receipt by the
Borrower or any Subsidiary of the Borrower of notice of the commencement
thereof, notice of all actions, suits and proceedings by or before any
Governmental Authority or arbitrator affecting the Borrower or any
Subsidiary of the Borrower which, if determined adversely to the
Borrower or such Subsidiary of the Borrower, could reasonably be
expected to have a Material Adverse Effect;
(e) Notice of Default. As soon as possible and in any event
within two (2) Business Days after the chief executive officer,
president, chief financial officer, any vice president, secretary,
assistant secretary, treasurer or any assistant treasurer of the
Borrower has knowledge of the occurrence of a Default, a written notice
setting forth the details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;
53
(f) ERISA. As soon as possible and in any event within thirty
(30) days after the Borrower or any Subsidiary of the Borrower knows, or
has reason to know, that
(i) any Termination Event with respect to a Plan has
occurred or will occur,
(ii) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Plans is equal to an amount in excess
of $0 or
(iii) the Borrower or any Subsidiary of the Borrower is in
"default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan required by reason of
the Borrower's or any of its Subsidiaries' complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from
such Multiemployer Plan,
the Borrower will provide the Agent and the Lenders with a certificate
of its chief financial officer or Vice President, Finance setting forth
the details of such event and the action which is proposed to be taken
with respect thereto, together with any notice or filing which may be
required by the PBGC or any other Governmental Authority with respect to
such event;
(g) Notice of Material Adverse Effect. As soon as possible and in
any event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect, notice of the same;
(h) Proxy Statements, Periodic Reporting, Etc. As soon as
available, one copy of each financial statement, report, notice or proxy
statement sent by the Borrower or any Subsidiary of the Borrower to its
stockholders generally and one copy of each regular, periodic or special
report, registration statement or prospectus filed by the Borrower or
any Subsidiary of the Borrower with any securities exchange or the
Securities and Exchange Commission or any successor agency;
(i) Intercompany Contracts. Promptly upon entering into any such
arrangement or contract (to the extent permitted by Section 11.7),
copies or detailed descriptions of all tax sharing, cost allocation,
overhead attribution and any similar contracts or arrangements between
the Borrower and any of its Affiliates at any time existing; and
(j) General Information. Promptly, such other information
concerning the Borrower or any Subsidiary of the Borrower as the Agent
or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 10.1(a), (b) or
(h) (to the extent any such documents are included in materials otherwise filed
with the Securities and Exchange Commission) may be delivered electronically
and, if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto, on the
Borrower's website on the Internet at the website address listed on Schedule
15.13 or (ii) on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or
54
another relevant website, if any, to which each Lender and the Agent have access
(whether a commercial, third-party website or whether sponsored by the Agent);
provided that (i) the Borrower shall deliver paper copies of such documents to
the Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the Agent
or such Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Agent and each Lender of the posting of any such documents
and provide to the Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything to the contrary contained
herein, in every instance the Borrower shall be required to provide paper copies
of the Compliance Certificates required by Section 10.1(c) to the Agent and each
of the Lenders. Except for such Compliance Certificates, the Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
Section 10.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section 11.3, the Borrower will, and will cause each Subsidiary of
the Borrower to, preserve and maintain (a) its corporate existence and (b) all
of its leases, privileges, Permits, franchises, qualifications and rights that
are necessary in the ordinary conduct of its business. The Borrower will, and
will cause each Subsidiary of the Borrower to, conduct its business in an
orderly and efficient manner in accordance with good business practices.
Section 10.3 Maintenance of Properties. Except as permitted by Section
11.3, the Borrower will, and will cause each Subsidiary of the Borrower to,
maintain, keep and preserve all of its material Properties necessary in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
Section 10.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary of the Borrower to, pay or discharge at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments and governmental charges
imposed on it or its income or profits or any of its property and (b) all lawful
claims for labor, material and supplies, which, if unpaid, might become a Lien
upon any of its property; provided that neither the Borrower nor any Subsidiary
of the Borrower shall be required to pay or discharge any tax, levy, assessment
or governmental charge or charge for labor, material and supplies (i) which is
being contested in good faith by appropriate proceedings diligently pursued, and
for which adequate reserves in accordance with GAAP have been established and
(ii) if the failure to pay the same would not result in a Lien on the Property
of the Borrower or a Subsidiary of the Borrower other than a Permitted Lien.
Section 10.5 Insurance.
(a) To the extent reasonably available at commercially reasonable
expense, the Borrower will, and will cause each of its Subsidiaries to,
keep insured by financially sound and reputable insurers that are not
Affiliates of the Borrower all Property of a character usually insured
by responsible businesses engaged in the same or a similar business
similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations or entities and
carry such other insurance as is usually carried by such businesses.
55
(b) If a Default shall have occurred and be continuing, the
Borrower will, and will cause each of its Subsidiaries to, cause all
proceeds of insurance paid on account of the loss of or damage to any
Property of the Borrower or any of its Subsidiaries and all awards of
compensation for any Property of the Borrower or any of its Subsidiaries
taken by condemnation or eminent domain to be paid directly to the Agent
to be applied against the Obligations.
Section 10.6 Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, permit representatives and agents of the Agent and each
Lender, during normal business hours and upon reasonable notice to the Borrower,
to examine, copy and make extracts from the Borrower's or any of such
Subsidiaries' books and records, to visit and inspect the Borrower's or any of
such Subsidiaries' Properties and to discuss the business, operations and
financial condition of the Borrower or any of its Subsidiaries with the officers
and independent certified public accountants of such Person. The Borrower will,
and will cause each of its Subsidiaries to, authorize its accountants in writing
(with a copy to the Agent) to comply with this Section. The Agent or its
representatives may, at any time and from time to time at the Borrower's
expense, conduct field exams for such purposes as the Agent or the Required
Lenders may reasonably request.
Section 10.7 Keeping Books and Records. The Borrower will, and will
cause each of its Subsidiaries to, maintain proper books of record and account
in which full, true and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
Section 10.8 Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply in all material respects with all applicable
laws (including all Environmental Laws, ERISA, the Code, Regulation U and
Regulations T and X of the Board of Governors of the Federal Reserve System),
rules, regulations, orders and decrees of a material nature of any Governmental
Authority or arbitrator other than any such laws, rules, regulations, orders and
decrees contested by appropriate actions or proceedings diligently pursued, if
adequate reserves in conformity with GAAP and satisfactory to the Agent are
established with respect thereto and except for violations which could not be
expected to have a Material Adverse Effect.
Section 10.9 Compliance with Agreements. The Borrower will, and will
cause each of its Subsidiaries to, comply with all agreements, contracts and
instruments binding on it or affecting its properties or business other than
such noncompliance which could not reasonably be expected to have a Material
Adverse Effect.
Section 10.10 Further Assurances.
(a) Further Assurance. The Borrower will, and will cause each of
its Subsidiaries to, execute and/or deliver pursuant to this clause (a)
such further documentation and take such further action as may be
reasonably requested by the Required Lenders to carry out the provisions
and purposes of the Loan Documents.
56
(b) Subsidiary Joinder. The Borrower shall, and shall cause each
Domestic Subsidiary of the Borrower to, execute and deliver to the Agent
such documentation, including a Joinder Agreement, as the Agent may
require to cause each such Domestic Subsidiary to become a party to the
Subsidiary Guaranty as required by Article 7.
Section 10.11 ERISA. With respect to each Plan, the Borrower will, and
will cause each of its Subsidiaries to, comply with all minimum funding
requirements and all other material requirements of ERISA so as not to give rise
to any liability in excess of $5,000,000.
ARTICLE 11
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit shall remain outstanding (unless such Letter of Credit is
Cash Collateralized in full), the Borrower will perform and observe the
following covenants:
Section 11.1 Debt. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, incur, create, assume or permit to exist any
Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 9.9 and any extensions, renewals
or refinancings of such existing Debt so long as (i) the principal
amount of such Debt after such renewal, extension or refinancing shall
not exceed the principal amount of such Debt which was outstanding
immediately prior to such renewal, extension or refinancing and (ii)
such Debt shall not be secured by any assets other than assets securing
such Debt, if any, prior to such renewal, extension or refinancing;
(c) Debt of a Subsidiary Guarantor owed to the Borrower or
another Subsidiary Guarantor; provided that such Debt must according to
its terms be fully subordinate in all respects to any of such Subsidiary
Guarantor's indebtedness, liabilities or obligations to the Agent and
the Lenders pursuant to any Loan Document;
(d) Guarantees and other Debt incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds, banker's acceptances and other similar
obligations including those of the type described in Section 11.2(f);
(e) Debt of the Borrower or any Subsidiary of the Borrower
constituting purchase money Debt (including Capital Lease Obligations)
and secured by purchase money Liens permitted by Section 11.2(g), such
Debt, in the aggregate, not to exceed at any time an amount equal to ten
percent (10.0%) of the Borrower's Tangible Net Worth;
(f) Debt of the Borrower or any Subsidiary of the Borrower of the
type described in clause (l) of the definition of Debt, such Debt, in
aggregate principal or
57
principal equivalent amount, not to exceed at any time an amount equal
to twenty percent (20.0%) of the Borrower's Tangible Net Worth;
(g) Debt constituting obligations to reimburse worker's
compensation insurance companies for claims paid by such companies on
behalf of the Borrower or any Subsidiary of the Borrower in accordance
with the policies issued to the Borrower or any such Subsidiary;
(h) Debt secured by the Liens permitted by Section 11.2(d) and
Section 11.2(e);
(i) unsecured Debt arising under, created by and consisting of
Hedge Agreements, provided, (i) such Hedge Agreements shall have been
entered into for the purpose of hedging actual risk and not for
speculative purposes and (ii) that each counterparty to such Hedge
Agreement shall be a Lender (or an Affiliate thereof) or shall be rated
at least AA- by Standard and Poor's Rating Service or Aa3 by Xxxxx'x
Investors Service, Inc.;
(j) Debt arising from endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business of the Borrower or a Subsidiary of the Borrower;
(k) Debt consisting of commercial letters of credit and
reimbursement obligations therefor (and Guarantees of such reimbursement
obligations by Subsidiaries of the Borrower) where the aggregate face
amount of such letters of credit does not at any time exceed
$200,000,000; and
(l) In addition to the Debt described in the foregoing clauses
(a) through (k), Debt (including with respect to standby letters of
credit) which does not exceed twenty percent (20%) of the Borrower's
Tangible Net Worth in aggregate principal amount at any time
outstanding.
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary of the Borrower to, incur,
create, assume or permit to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except the following:
(a) existing Liens described on Schedule 11.2 and any extensions,
renewals or refinancings of the Debt secured by such Liens as permitted
under Section 11.1(b), provided that (i) no such Lien is expanded to
cover any additional Property (other than after-acquired title in or on
such Property and proceeds of the existing collateral) after the Closing
Date and (ii) no such Lien is spread to secure any additional Debt after
the Closing Date;
(b) Liens in favor of the Agent, for the benefit of the Agent and
the holders of the Obligations;
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(c) encumbrances consisting of easements, zoning restrictions or
other restrictions on the use of real Property that do not (individually
or in the aggregate) materially detract from the value of the real
Property encumbered thereby or materially impair the ability of the
Borrower or such Subsidiary to use such real Property in its business;
(d) Liens for taxes, assessments or other governmental charges
(but excluding environmental Liens or Liens under ERISA) that are not
delinquent or which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP;
(e) contractual or statutory Liens of mechanics, materialmen,
warehousemen, carriers, landlords or other similar Liens securing
obligations that are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate
reserves have been established in accordance with GAAP and are incurred
in the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance or other social security programs
or to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety and appeal bonds, bids and other contracts
incurred in the ordinary course of business (other than for payment of
Debt);
(g) Liens for purchase money obligations and Liens securing
Capital Lease Obligations; provided that (i) the Debt secured by any
such Lien is permitted under Section 11.1(e) and (ii) any such Lien
encumbers only the Property so purchased or leased and the products,
proceeds (including insurance proceeds), accessions, replacements,
substitutions and improvements thereto;
(h) any attachment or judgment Lien not constituting an Event of
Default;
(i) any interest or title of a licensor, lessor or sublessor
under any license or lease and any interest or title of a licensee,
lessee or sublessee under any license, cross-license or lease in any
event entered into in the ordinary course of business and not otherwise
prohibited by the terms of this Agreement;
(j) Liens against equipment arising from precautionary UCC
financing statement filings regarding operating leases entered into by
such Person in the ordinary course of business;
(k) nonconsensual Liens in favor of banking institutions arising
as a matter of law and encumbering the deposits (including the right of
set-off) held by such banking institutions in the ordinary course of
business; and
(l) Liens (including statutory and common law liens) in or
against goods, documents or instruments, including proceeds (including
insurance proceeds), products, accessions, substitutions and
replacements related thereto, related to or arising out of
59
commercial or documentary letter of credit transactions, to the extent
that such letter of credit transactions constitute permitted Debt under
Section 11.1(k).
Section 11.3 Mergers, Etc. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, become a party to a merger or consolidation or
purchase or otherwise acquire all or a substantial part of the business or
Property of any Person or all or a substantial part of the business or Property
of a division or branch of a Person or a majority interest in the Capital Stock
of any Person, or wind up, dissolve or liquidate itself; provided that
notwithstanding the foregoing or any other provision of this Agreement as long
as no Default exists or would result therefrom and provided the Borrower gives
the Agent and the Lenders prior written notice:
(a) a Subsidiary of the Borrower may wind-up, dissolve or
liquidate if its Property is transferred to the Borrower or a
Wholly-Owned Subsidiary;
(b) any Subsidiary of the Borrower may merge or consolidate with
the Borrower (provided the Borrower is the surviving entity) or a
Wholly-Owned Subsidiary (provided the Wholly-Owned Subsidiary is the
surviving entity);
(c) the Borrower or any Wholly-Owned Subsidiary may make
Permitted Acquisitions; and
(d) to the extent the Required Lenders agree in writing, the
Borrower or any Wholly-Owned Subsidiary may make additional acquisitions
not included in Permitted Acquisitions.
Section 11.4 Restricted Payments. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, (a) make any prepayment of any Debt
other than (i) the Obligations, (ii) any Debt owed to the Borrower or a
Subsidiary of the Borrower or (iii) regularly scheduled payments of principal
and interest under the Note Agreement or (b) directly or indirectly declare,
order, pay, make or set apart any sum for (i) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any such Person now or hereafter outstanding or (ii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of any such Person
now or hereafter outstanding except:
(x) the Borrower may repurchase its Capital Stock, provided that
(A) the amount of all such repurchases shall not at any time exceed an
amount equal to the sum of $100,000,000, plus an amount equal to ten
percent (10.0%) of the Borrower's Net Income during the period from the
Closing Date through the end of the Fiscal Quarter ending immediately
prior to the date of such repurchase and (B) no Default shall be in
existence at the time of such repurchase; and
(y) the Borrower may acquire or redeem Capital Stock of the
Borrower held by any former officer, director or employee of the
Borrower or beneficiaries of any such Person's estate or trusts created
by or for the benefit of any such Person or their beneficiaries.
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Section 11.5 Investments. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, make or permit to remain outstanding any advance,
loan, extension of credit or capital contribution to or investment in any
Person, or purchase or own any stocks, bonds, notes, debentures or other
Securities of any Person, or be or become a joint venturer with or partner of
any Person (all the foregoing, herein "Investments"), except:
(a) Permitted Acquisitions;
(b) the Borrower or any Wholly-Owned Subsidiary may make
Investments in Domestic Subsidiaries;
(c) the Borrower may make Investments in Foreign Subsidiaries
(subject to the requirements of Section 11.1 and Section 11.3); provided
that (i) the aggregate amount of all Investments in Foreign Subsidiaries
shall not exceed an amount equal to fifteen percent (15.0%) of the
Borrower's assets at the time of making any such Investment and (ii)
such Investments in Foreign Subsidiaries which constitute advances,
loans, extensions of credit, bonds, notes or debentures owed to the
Borrower shall at all times be subordinate in all respects to the
Obligations or any indebtedness, liability or obligation of such Foreign
Subsidiary to the Agent and the Lenders (if any) under any Loan Document
and must otherwise be in compliance with Section 11.1 and Section 11.3;
(d) the Borrower may, up to an aggregate amount at any time
outstanding of not more than $20,000,000, make equity investments in
Affiliates and other Persons and related businesses, excluding
Subsidiaries of the Borrower;
(e) readily marketable direct obligations of the U.S. or any
agency thereof with maturities of one year or less from the date of
acquisition;
(f) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of
$250,000,000 and repurchase and reverse repurchase obligations entered
into with any such commercial bank;
(g) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poor's Rating Service or Xxxxx'x Investors
Service, Inc. or any successor thereto;
(h) Investments received in connection with the settlement of
delinquent obligations of, and disputes with, customers and suppliers
and other trade debtors arising in the ordinary course of business;
(i) Investments in money market mutual funds registered with the
Securities and Exchange Commission meeting the requirements of Rule 2a-7
promulgated under the Investment Company Act of 1940, which funds are
rated in one of the two highest rating categories of Standard and Poor's
Rating Service or Xxxxx'x Investors Service, Inc. or any successor
thereto;
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(j) extensions of trade credit in the ordinary course of
business;
(k) to the extent permitted under applicable law, the Borrower
and any Wholly-Owned Subsidiary may make loans and advances to officers,
directors and employees in the ordinary course of business and
consistent with past practices up to an aggregate amount at any time
outstanding of not more than $5,000,000;
(l) Investments existing on the Closing Date and listed on
Schedule 11.5; and
(m) Investments consisting of purchases of debt Securities or
other extensions of credit by the Borrower or any Subsidiary of the
Borrower to the lessor/purchaser in connection with Permitted
Sale-Leasebacks.
The amount of Investments pursuant to clause (c) preceding shall be the amount
of all cash or other Property invested, loaned, advanced or otherwise
contributed to all Foreign Subsidiaries of the Borrower whether such Investments
are made as a single transaction or as one of a series of transactions, and such
amount shall be determined at the time of making of each Investment or portion
thereof if in connection with a series of transactions.
Section 11.6 Limitation on Issuance of Capital Stock of Subsidiaries.
The Borrower will not permit any Subsidiary of the Borrower to at any time
issue, sell, assign or otherwise dispose of, except to the Borrower or a
Wholly-Owned Subsidiary or in connection with a Permitted Acquisition, (a) any
Capital Stock of a Subsidiary of the Borrower, (b) any Securities exchangeable
for or convertible into or carrying any rights to acquire any Capital Stock of a
Subsidiary of the Borrower or (c) any option, warrant or other right to acquire
any Capital Stock of a Subsidiary of the Borrower.
Section 11.7 Transactions with Affiliates. The Borrower will not, nor
will it permit any Subsidiary of the Borrower to, enter into any transaction,
including the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate (as used in this Section 11.7 the term "Affiliate"
shall exclude any Subsidiary of the Borrower) of the Borrower or such Subsidiary
of the Borrower, except in the ordinary course of 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 would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate of the Borrower or such Subsidiary.
Section 11.8 Disposition of Assets. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, sell, lease, assign, transfer or
otherwise voluntarily dispose of any of its Property other than (a) sales of
inventory in the ordinary course of business, (b) Asset Dispositions in the
ordinary course of business in connection with the closing of any retail
location of the Borrower or any Subsidiary of the Borrower and (c) other Asset
Dispositions in any Fiscal Year where the net book value of the assets disposed
of does not exceed 10% of the Borrower's Tangible Net Worth as of the last day
of the immediately preceding Fiscal Year.
Section 11.9 Lines of Business. The Borrower will not, nor will it
permit any Subsidiary of the Borrower to, engage in any line or lines of
business activity other than the
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business activities in which they are engaged on the Closing Date or a business
reasonably related or complementary thereto.
Section 11.10 Limitations on Restrictions Affecting the Borrower and its
Subsidiaries. Neither the Borrower nor any Subsidiary of the Borrower shall
enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its Properties, whether now owned or
hereafter acquired, other than pursuant to non-assignment provisions of a
Permitted Lien, operating lease or of Debt of the type described in clause (l)
of the definition of Debt and which is restricted solely to the Property which
is the subject of such Permitted Lien or such lease transaction and which does
not prohibit the Borrower or any Subsidiary of the Borrower from granting Liens
to the Agent or any Lender as collateral for the Obligations. Except as provided
herein, the Borrower will not, nor will it permit any Subsidiary of the Borrower
to, directly or indirectly create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of the Borrower or any Subsidiary of the Borrower to (a) pay dividends
or make any other distribution on any of its Capital Stock, (b) pay any Debt
owed to the Borrower or any Subsidiary of the Borrower, (c) make loans or
advances to the Borrower or any Subsidiary of the Borrower, (d) transfer any
Property of the Borrower or any Subsidiary of the Borrower to any other Person,
except pursuant to non-assignment provisions of Permitted Liens, leases and
licenses entered into in the ordinary course of business or (e) make any
prepayment of any of the Obligations.
Section 11.11 Environmental Protection. The Borrower will not, nor will
it permit any Subsidiary of the Borrower to, (a) use (or permit any tenant to
use) any of its Properties for the handling, processing, storage, transportation
or disposal of any Hazardous Material except in compliance with applicable
Environmental Laws, (b) generate any Hazardous Material except in compliance
with applicable Environmental Laws, (c) conduct any activity that is likely to
cause a Release or threatened Release of any Hazardous Material in violation of
any Environmental Law or (d) otherwise conduct any activity or use any of its
Properties in any manner that in any material respect violates or is likely to
violate any Environmental Law or create any Environmental Liabilities for which
the Borrower or any Subsidiary of the Borrower would be responsible that could
be expected to have a Material Adverse Effect.
Section 11.12 ERISA. The Borrower will not, nor will it permit any
Subsidiary of the Borrower to:
(a) allow or take (or permit any ERISA Affiliate to take) any
action which would cause any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) in excess
of $5,000,000 to exist or to be created; or
(b) with respect to any Multiemployer Plan, allow or take (or
permit any ERISA Affiliate to take) any action which would cause any
unfunded or unpaid liability by the Borrower or any ERISA Affiliate to
any Multiemployer Plan in excess of $5,000,000 to exist or to be
created, either individually as to any such Plan or in the aggregate as
to all such Plans.
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ARTICLE 12
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
any Letter of Credit shall remain outstanding (unless such Letter of Credit is
Cash Collateralized in full), it will perform and observe the following
financial covenants:
Section 12.1 Leverage Ratio. As of the end of each Fiscal Quarter, the
Borrower shall not permit the Leverage Ratio calculated as of the end of such
Fiscal Quarter, for the preceding twelve (12) Fiscal Periods then ending, to
exceed 3.50:1.
Section 12.2 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter, the Borrower shall not permit the Fixed Charge Coverage Ratio,
calculated as of the end of such Fiscal Quarter, for the preceding four (4)
Fiscal Quarter period then ending, to be less than 2.25:1.
Section 12.3 Minimum Tangible Net Worth. The Borrower shall not permit
its Tangible Net Worth at any time to be less than the total of (a)
$500,000,000, plus (b) seventy-five percent (75.0%) of the Borrower's positive
Net Income for each Fiscal Quarter completed after the Closing Date, plus (c)
one hundred percent (100%) of any increase in Tangible Net Worth attributable to
issuance of equity Securities of the Borrower or any Subsidiary of the Borrower
after the Closing Date minus (d) one hundred percent (100%) of any decrease in
Tangible Net Worth attributable to repurchases after the Closing Date of Capital
Stock of the Borrower permitted under Section 11.4(x).
Section 12.4 Capital Expenditures. As of the end of each Fiscal Year,
the aggregate amount of all Capital Expenditures of the Borrower and its
Subsidiaries for such Fiscal Year shall not exceed nine percent (9%) of gross
revenue of the Borrower for such Fiscal Year, plus fifty percent (50.0%) of the
amount by which nine percent (9%) of gross revenue of the Borrower for the prior
Fiscal Year (provided that Capital Expenditures were subject to the terms of
this Section 12.4 during such prior Fiscal Year) exceeded Capital Expenditures
during such prior Fiscal Year.
ARTICLE 13
Default
Section 13.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) the Borrower shall fail to pay (i) when due any principal
owing with respect to the Loan or any L/C Obligation payable under any
Loan Document or any part thereof, (ii) within three (3) Business Days
of the date due any interest on the Loan or any L/C Obligation or fees
payable under the Loan Documents or any part thereof or (iii) within
three (3) Business Days after the date the Borrower receives written
notice of the
64
failure to pay when due, any other Obligation or any part thereof, or
any indebtedness, liability or obligation due to any Lender under any
Hedge Agreement;
(b) any representation, warranty or certification made or deemed
made by the Borrower or any Subsidiary of the Borrower (or any of their
respective officers) in any Loan Document or in any certificate, report,
notice or financial statement furnished at any time in connection with
any Loan Document shall be false, misleading or erroneous in any
material respect when made or deemed to have been made;
(c) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe or comply with any covenant, agreement or term
contained in Section 2.4, Section 5.4(a), Section 10.1, Section 10.2,
Section 10.6, Section 10.10, Article 11 (other than related to
non-consensual Liens under Section 11.2) or Article 12;
(d) the Borrower or any Subsidiary of the Borrower shall fail to
perform, observe or comply with any other agreement or term contained in
any Loan Document (other than as described in Section 13.1(a), Section
13.1(b) or Section 13.1(c)) and (i) such failure shall continue for a
period of thirty (30) days after the earlier of (A) the date the Agent
provides the Borrower with notice thereof or (B) the date the Borrower
should have notified the Agent thereof in accordance with Section
10.1(e) or (ii) as otherwise specifically provided by any other Loan
Document;
(e) the Borrower or any Subsidiary of the Borrower shall (i)
apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner, liquidator or the like of
itself or of all or a substantial part of its Property, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the United States Bankruptcy Code (as now or
hereafter in effect, the "Bankruptcy Code"), (iv) institute any
proceeding or file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, winding-up or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under
the Bankruptcy Code, (vi) admit in writing its inability to or be
generally unable to pay its debts as such debts become due or (vii) take
any corporate action for the purpose of effecting any of the foregoing;
(f) (i) a proceeding or case shall be commenced, without the
application, approval or consent of the Borrower or any Subsidiary of
the Borrower in any court of competent jurisdiction, seeking (A) its
reorganization, liquidation, dissolution, arrangement or winding-up or
the composition or readjustment of its debts, (B) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of the
Borrower or such Subsidiary or of all or any substantial part of its
Property or (C) similar relief in respect of the Borrower or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or readjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60)
or more days or (ii) an order for relief against the Borrower or any
Subsidiary shall be entered in an involuntary case under the Bankruptcy
Code;
65
(g) the Borrower or any Subsidiary of the Borrower shall fail
within a period of thirty (30) days after the commencement thereof to
discharge or obtain a stay of any attachment, sequestration, forfeiture
or similar proceeding or proceedings involving an aggregate amount in
excess of $10,000,000 against any of its assets or Properties;
(h) a final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate (to the extent not paid or fully
covered by insurance acknowledged by a carrier reasonably acceptable to
the Agent) shall be rendered by a court or courts against the Borrower
or any Subsidiary of the Borrower and the same shall not be satisfied,
discharged or dismissed (or provision shall not be made for such
satisfaction, discharge or dismissal), or a stay of execution or other
stay of enforcement thereof shall not be procured, within sixty (60)
days from the date of entry thereof and the Borrower or any Subsidiary
of the Borrower, as applicable, shall not, within said period of sixty
(60) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal;
(i) (i) the Borrower or any Subsidiary of the Borrower shall fail
to pay when due any principal of or interest on any Debt (other than the
Obligations) beyond the period of grace (if any) if the aggregate
principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or
syndicated credit arrangement) of the affected Debt equals or exceeds
$10,000,000, or the maturity of any such Debt shall have been
accelerated or shall have been required to be prepaid prior to the
stated maturity thereof, (ii) any event shall have occurred with respect
to any Debt in the aggregate principal amount equal to or in excess of
$10,000,000 that permits the holder or holders of such Debt or any
Person acting on behalf of such holder or holders to accelerate the
maturity thereof or require any prepayment thereof or (iii) any event of
default shall have occurred under the Note Agreement;
(j) this Agreement or any other Loan Document shall cease to be
in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
the Borrower or any Subsidiary, or the Borrower or any Subsidiary shall
deny that it has any further liability or obligation under any of the
Loan Documents;
(k) any of the following events shall occur or exist with respect
to the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
and in each case, such event or condition, together with all other such
events or conditions, if any, have subjected or could in the reasonable
opinion of the Agent or the Required Lenders subject the Borrower or any
Subsidiary of the Borrower (or any combination thereof) to any tax,
penalty or other liability to a Plan, a Multiemployer Plan, the PBGC or
otherwise (or any combination thereof) which in the aggregate could
reasonably be expected to exceed $5,000,000: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any
event or circumstance that could reasonably be expected to constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment
66
of a trustee to administer, any Plan, or the institution by the PBGC of
any such proceedings; or (v) the complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency or termination of any Multiemployer Plan;
(l) the occurrence of any event or condition which constitutes a
Material Adverse Effect and thirty (30) days shall have passed since
written notification thereof to the Borrower by the Agent (therein
identifying such event or condition) without such event or condition
having been remedied, cured or waived; or
(m) the occurrence of a Change of Control.
Section 13.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (and if directed by the Required Lenders, shall) do
any one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all
outstanding principal of and accrued and unpaid interest on the Notes
and all other amounts payable by the Borrower under the Loan Documents
immediately due and payable, and the same shall thereupon become
immediately due and payable, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest or other formalities of any kind, all of
which are hereby expressly waived by the Borrower except as where
required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Declare the Commitments and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such Commitments and obligation shall be
terminated;
(c) Cash Collateralization. Require that the Borrower Cash
Collateralize the L/C Obligations (in an amount equal to the then
Outstanding Amount thereof);
(d) Judgment. Reduce any claim to judgment; and
(e) Rights. Exercise any and all rights and remedies afforded by
the laws of the State of California, or any other jurisdiction governing
any of the Loan Documents, by equity or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
Section 13.1(e) or Section 13.1(f) with respect to the Borrower or any
Guarantor, the Commitments of all of the Lenders and any obligation of the L/C
Issuer to make L/C Credit Extensions shall automatically terminate and the
outstanding principal of and accrued and unpaid interest on the Notes and all
other amounts payable by the Borrower or any other party under the Loan
Documents shall thereupon become immediately due and payable, and the obligation
of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Agent or
any Lender, and in each case without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
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Section 13.3 Performance by the Agent. Upon the occurrence of a Default,
if the Borrower or any Guarantor shall fail to perform any agreement in
accordance with the terms of the Loan Documents, the Agent may, and at the
direction of the Required Lenders shall, perform or attempt to perform such
agreement on behalf of the Borrower or such Guarantor, as applicable. In such
event, at the request of the Agent, the Borrower shall promptly pay any amount
expended by the Agent or the Lenders in connection with such performance or
attempted performance, to the Agent at the Principal Office together with
interest thereon at the Default Rate applicable to the Base Rate Balance from
the date of such expenditure to the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the Agent,
the Arranger, nor any Lender shall have any liability or responsibility for the
performance of any obligation of the Borrower or any Guarantor under any Loan
Document.
Section 13.4 Set-off. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower or any other Person (any such notice being hereby
expressly waived), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the Obligations now or hereafter
existing under any Loan Document, irrespective of whether or not the Agent or
such Lender shall have made any demand under such Loan Documents and although
the Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. Each Lender
agrees promptly to notify the Borrower (with a copy to the Agent) after any such
set-off and application; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights and remedies of
each Lender hereunder are in addition to other rights and remedies (including
other rights of set-off) which such Lender may have.
Section 13.5 Continuance of Default. For purposes of all Loan Documents,
a Default shall be deemed to have continued and exist until the Agent shall have
actually received evidence satisfactory to the Agent that such Default shall
have been remedied.
ARTICLE 14
The Agent
Section 14.1 Appointment and Authorization of the Agent.
(a) Each Lender hereby irrevocably (subject to Section 14.9)
appoints, designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Lender or Participant, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document
or otherwise exist against the Agent. Without
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limiting the generality of the foregoing sentence, the use of the term
"agent" in this Agreement and in the other Loan Documents with reference
to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom, and
is intended to create or reflect only an administrative relationship
between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits
and immunities (i) provided to the Agent in this Article 14 with respect
to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and
the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term "Agent" as used in this
Article 14 and in the definition of "Agent-Related Person" included the
L/C Issuer with respect to such acts or omissions and (ii) as
additionally provided herein with respect to the L/C Issuer.
Section 14.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct.
Section 14.3 Liability of the Agent. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein) or (b) be responsible
in any manner to any Lender or Participant for any recital, statement,
representation or warranty made by the Borrower or any other party to any Loan
Document, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or Participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any Subsidiary or
Affiliate thereof.
Section 14.4 Reliance by the Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to
be genuine
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and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower or any other Person party to any Loan Document),
independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action
under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or all Lenders, as applicable) as
the Agent deems appropriate and, if the Agent so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by the Agent by reason
of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request
or consent of the Required Lenders or all Lenders, if required
hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders and
Participants. Where this Agreement expressly permits or prohibits an
action unless the Required Lenders otherwise determine, the Agent shall,
and in all other instances, the Agent may, but shall not be required to,
initiate any solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Article 8, each Lender and Participant shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each
document or other matter either sent by the Agent to each Lender for
consent, approval, acceptance or satisfaction, or required thereunder to
be consented to or approved by or acceptable or satisfactory to a
Lender.
Section 14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Agent for the account of the Lenders, unless the Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
The Agent will notify the Lenders of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be directed by the
Required Lenders; provided, however, that unless and until the Agent has
received any such direction, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable or in the best interest of the Lenders.
Section 14.6 Credit Decision; Disclosure of Information by the Agent.
Each Lender and Participant acknowledges that no Agent-Related Person has made
any representation or warranty to such Lender or Participant, and that no act by
the Agent hereinafter taken, including any consent to and acceptance of any
assignment or review of the affairs of the Borrower or any of its Subsidiaries
or Affiliates, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Lender or Participant as to any matter,
including whether any Agent-Related Person has disclosed material information in
its possession. Each Lender, including any Lender by assignment, and each
Participant represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries and
Affiliates, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and each such Lender or
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Participant has made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Lender and Participant also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as such Lender or Participant shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and Affiliates. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent herein, the Agent shall not
have any duty or responsibility to provide any Lender or Participant with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries or Affiliates which may come into the possession of any
Agent-Related Person.
Section 14.7 Indemnification of the Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so), pro rata, and hold harmless each Agent-Related Person from and against any
and all Indemnified Liabilities incurred by it; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct; provided, further, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the Agent upon
demand for such Lender's ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 14.8 The Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Affiliates as though Bank of America were not the Agent or L/C
Issuer hereunder and without notice to or consent of the Lenders. The Lenders
and Participants acknowledge that, pursuant to such activities, Bank of America
or its Affiliates may receive information regarding the Borrower and its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower or such Affiliate) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Balances, Bank of America shall have the same rights and powers
under this Agreement as any other Lender and may exercise the same as though it
were not the Agent or the L/C Issuer, and the terms "Lender" and "Lenders" shall
include Bank of America in its individual capacity.
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Section 14.9 Resignation of the Agent. The Agent may, and at the request
of the Required Lenders shall, resign as the Agent upon thirty (30) days' notice
to the Lenders; provided that any such resignation by Bank of America shall also
constitute its resignation as L/C Issuer. If the Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders, which successor administrative agent shall
be consented to by the Borrower at all times other than during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Agent and L/C Issuer, and the respective terms "Agent" and "L/C Issuer"
shall mean such successor administrative agent and Letter of Credit issuer, and
the retiring Agent's appointment, powers and duties as the Agent shall be
terminated and the retiring L/C Issuer's rights, powers and duties as such shall
be terminated, without any other or further act or deed on the part of such
retiring L/C Issuer or any other Lender, other than the obligation of the
successor L/C Issuer to issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or to make other
arrangements satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.
After any retiring Agent's resignation hereunder as the Agent, the provisions of
this Article 14, Section 15.1, and Section 15.2 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent under this
Agreement. If no successor administrative agent has accepted appointment as the
Agent by the date which is thirty (30) days following a retiring Agent's notice
of resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
Section 14.10 Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Borrower or any Guarantor, the Agent (irrespective of whether the principal
of the Loan or any L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise
(i) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loan,
L/C Obligations and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the
Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Agent
and their respective agents and counsel and all other amounts due
the Lenders and the Agent under Sections 3.9, 3.10, 4.6, 4.7 and
15.1) allowed in such judicial proceeding; and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the
same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Agent and, in the event that the Agent
shall consent to the making of such payments directly to the Lenders, to pay to
the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent under Sections 4.7 and 15.1.
Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Agent to vote in respect of the
claim of any Lender in any such proceeding.
Section 14.11 Guaranty Matters. The Lenders irrevocably authorize the
Agent, at its option and in its discretion, to release any Guarantor from its
obligations under the Guaranties if such Person ceases to be a Subsidiary of the
Borrower as a result of a transaction permitted hereunder. Upon request by the
Agent at any time, the Required Lenders will confirm in writing the Agent's
authority to release any Guarantor from its obligations under the Guaranty
pursuant to this Section 14.11.
Section 14.12 Co-Agents; Lead Managers. None of the Lenders identified
on the facing page or signature pages of this Agreement as a "co-agent" or other
similar title 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 foregoing, none of the Lenders or other Persons so
identified as a "co-agent" or other similar title shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 15
Miscellaneous
Section 15.1 Attorney Costs, Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Agent for, promptly after presentation of supporting
documents, all reasonable costs and expenses incurred in connection with the
development, preparation, negotiation and execution of this Agreement and the
other Loan Documents and any amendment, waiver, consent or other modification of
the provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated) and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs
and (b) to pay or reimburse the Agent and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any insolvency law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Agent and the cost of
independent public accountants and other outside
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experts retained by the Agent or any Lender. All amounts due under this Section
15.1 shall be payable within thirty (30) Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Commitments
and repayment of all other Obligations.
Section 15.2 Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) any Commitment,
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower or any Subsidiary or
Affiliate of the Borrower, or any Environmental Liability related in any way to
the Borrower or any Subsidiary or Affiliate of the Borrower or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements have resulted from the gross
negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Agreement. All amounts due under
this Section 15.2 shall be payable within thirty (30) Business Days after demand
therefor. The agreements in this Section shall survive the resignation of the
Agent, the replacement of any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations.
Section 15.3 Limitation of Liability. No Agent-Related Person, Lender or
any Affiliate, officer, director, employee, attorney or agent thereof shall have
any liability with respect to the Borrower for and, by the execution of the Loan
Documents to which it is a party, each other party to any Loan Document, hereby
waives, releases, and agrees not to xxx any of them upon, any claim for, any
special, indirect, incidental, consequential or punitive damages suffered or
incurred by any such Person in connection with, arising out of, or in any way
related to any of the Loan Documents, or any of the transactions contemplated by
any of the Loan Documents.
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Section 15.4 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by any of the Agent, the Arranger
or any Lender shall have the right to act exclusively in the interest of Agent,
the Arranger and the Lenders and shall have no duty of disclosure, duty of
loyalty, duty of care or other duty or obligation of any type or nature
whatsoever to the Borrower or any Guarantor, any shareholders of the Borrower or
any Guarantor or any other Person.
Section 15.5 No Fiduciary Relationship. The relationship between the
Borrower and the Guarantors on the one hand and the Agent, the Arranger and the
Lenders on the other is solely that of debtor and creditor, and neither any of
the Agent, the Arranger nor any Lender has any fiduciary or other special
relationship with the Borrower or any Guarantor, and no term or condition of any
of the Loan Documents shall be construed so as to deem the relationship between
the Borrower and the Guarantors on the one hand and any of the Agent, the
Arranger and each Lender on the other to be other than that of debtor and
creditor.
Section 15.6 Equitable Relief. The Borrower recognizes that in the event
the Borrower or any Guarantor fails to pay, perform, observe or discharge any or
all of the Obligations under the Loan Documents, any remedy at law may prove to
be inadequate relief to the Agent and the Lenders. The Borrower therefore agrees
that the Agent and the Lenders, if the Agent or the Required Lenders so request,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
Section 15.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided for in the Loan Documents are cumulative and
not exclusive of any rights and remedies provided by law.
Section 15.8 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the
provisions of clause (b) of this Section, (ii) by way of participation
in accordance with the provisions of clause (d) of this Section or (iii)
by way of pledge or assignment of a security interest subject to the
restrictions of clause (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent
provided in clause (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
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(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the portion
of the Loan (including for purposes of this clause (b), participations
in L/C Obligations) at the time owing to it); provided that (i) except
in the case of an assignment of the entire remaining amount of the
assigning Lender's Commitment and the portion of the Loan at the time
owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes the Loan
outstanding thereunder) subject to each such assignment, determined as
of the date the Assignment and Assumption with respect to such
assignment is delivered to the Agent or, if "Trade Date" is specified in
the Assignment and Assumption, as of the Trade Date, shall not be less
than $10,000,000 unless each of the Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents
(which consent of the Borrower shall not be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the portion of the Loan
or the Commitment assigned, (iii) any assignment of a Commitment must be
approved by the Agent and the L/C Issuer unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee) and (iv) the
parties to each assignment shall execute and deliver to the Agent an
Assignment and Assumption and an Acknowledgement of Intercreditor
Agreement, together with a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by the Agent pursuant to
clause (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 6.1, 6.5, 6.6, 15.1 and 15.2 with
respect to facts and circumstances occurring prior to the effective date
of such assignment). Upon request, the Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender and, if applicable,
shall deliver a replacement Note to the assignor Lender. Any assignment
or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this clause (b) shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with clause (d) of this Section.
From time to time upon request of the Borrower, the Agent will inform
the Borrower of the identities of all Lenders and their respective
Commitments.
(c) The Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Principal Office a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the portion of the Loan and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the
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Agent and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary, and
any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in
the Register as the Lender shall be conclusive and binding on any
subsequent holder, assignee, or transferee of the corresponding
Commitments or Obligations. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, but with
notice to, the Borrower and the Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion
of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loan (including
such Lender's participations in L/C Obligations) owing to it); provided
that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that
such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that a Lender selling a participation may, in any
agreement with a Participant, give such Participant the right to consent
to any matter which (A) extends the Maturity Date as to such Participant
or any other date upon which any payment of money is due to such
Participant, (B) reduces the rate of interest owing to such Participant,
any fee or any other monetary amount owing to such Participant, (C)
reduces the amount of any installment of principal owing to such
Participant or (D) releases all or substantially all of the Guarantors
of their obligations under the Subsidiary Guaranty. Subject to clause
(e) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 6.1, 6.5 and 6.6 to the same extent
as if it were a Lender and had acquired its interest by assignment
pursuant to clause (b) of this Section. To the extent permitted by law,
each Participant shall be also entitled to the benefits of Section 13.4
as though it were a Lender, provided such Participant agrees to be
subject to Section 5.7 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 6.1 or 6.5 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 6.5 unless such Participant agrees, for the benefit
of the Borrower, to comply with Section 15.22 as though it were a Lender
(it being understood that the Agent and the Borrower shall be third
party beneficiaries of such covenant).
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure
77
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.
(g) As used herein, the following terms have the following
meanings:
"Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a
Lender, (iii) an Approved Fund and (iv) any other Person (other
than a natural person) approved by (x) the Agent and the L/C
Issuer and (y) unless an Event of Default has occurred and is
continuing, the Borrower (which approval of the Borrower shall
not be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not
include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.
"Fund" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in
the ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed by
(i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or
an Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if
at any time Bank of America assigns all of its Commitment and portions
of the Loan owing to it pursuant to clause (b) above, Bank of America
may, upon 30 days' notice to the Borrower and the Lenders, resign as L/C
Issuer. In the event of any such resignation as L/C Issuer, the Borrower
shall be entitled to appoint from among the Lenders a successor L/C
Issuer hereunder (and upon acceptance of such appointment by a Lender,
such Lender shall be such successor L/C Issuer); provided that no
failure by the Borrower to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer. If Bank of America resigns
as L/C Issuer, it shall retain all the rights and obligations of the L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of
the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the
Lenders to fund Base Rate Balances or fund risk participations in
Unreimbursed Amounts pursuant to Section 3.3).
Section 15.9 Survival. All representations and warranties made hereunder
and in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Agent and each Lender, regardless of any
investigation made by the Agent or any Lender or on their behalf and
notwithstanding that the Agent or any Lender may have had notice or knowledge of
any Default at the time of any extension of credit hereunder, and shall continue
in full force and effect as long as the Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding. Without prejudice to the survival of any other
78
obligation of the Borrower hereunder, the obligations under Article 6, Section
14.7, Section 15.1 and Section 15.2 shall survive repayment of the Notes and
termination of the Commitments.
Section 15.10 Entire Agreement. This Agreement, together with the other
Loan Documents and any letter agreements referred to herein, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and supersedes all prior agreements, written or oral, on the subject matter
hereof. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control and govern; provided that the inclusion of supplemental rights or
remedies in favor of the Agent or the Lenders in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
Section 15.11 Amendments and Waivers. Any provision of any Loan Document
may be amended or waived and any consent to any departure by the Borrower
therefrom may be granted if, but only if, such amendment, waiver or consent is
in writing and is signed by the Borrower, and the Required Lenders; provided
that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 8.1(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate
any Commitment theretofore terminated) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected
thereby;
(d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the
second proviso to this Section 15.11) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby, provided that only the consent
of the Required Lenders shall be necessary to amend the definition of
"Default Rate" or to waive any obligation of the Borrower to pay
interest at the Default Rate;
(e) change Section 5.7 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each
Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number
or percentage of Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; or
(g) release all or substantially all the Guarantors from the
Guaranty without the written consent of each Lender;
79
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it, (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Agent in addition to the Lenders required above, affect the rights or duties
of the Agent under this Agreement or any other Loan Document and (iii) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto.
Section 15.12 Maximum Interest Rate. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable law (the "Maximum Rate"). If the Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excessive interest shall be applied to the principal of the Obligations or, if
it exceeds the unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged or received by the Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable law, (a) characterize any payment that is not principal as an
expense, fee or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof and (c) amortize, prorate, allocate and spread in equal
or unequal parts the total amount of interest throughout the contemplated term
of the Obligations.
Section 15.13 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile
number or (subject to clause (c) below) electronic mail address, and all
notices and other communications expressly permitted hereunder to be
given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Agent or the L/C Issuer, to
the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 15.13 or
to such other address, facsimile number, electronic mail address
or telephone number as shall be designated by such party in a
notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in
its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as
shall be designated by such party in a notice to the Borrower,
the Agent and the L/C Issuer.
All such notices and other communications shall be deemed to be given or
made upon the earlier to occur of (i) actual receipt by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when
signed for by or on behalf of the relevant party hereto, (B) if
delivered by mail, four Business Days after deposit in the mails,
postage prepaid, (C) if
80
delivered by facsimile, when sent and receipt of such delivery has been
confirmed by telephone from the receiving party and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
clause (c) below), when delivered; provided that notices and other
communications to the Agent and the L/C Issuer pursuant to Article 3 and
Article 4 shall not be effective until actually received by such Person.
In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable law, have the same force and effect as manually signed
originals and shall be binding on the Borrower, the Guarantors, the
Agent and the Lenders. The Agent may also require that any such
documents and signatures be confirmed by a manually signed original
thereof; provided that the failure to request or deliver the same shall
not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet
and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Section 10.1, and to distribute Loan Documents for execution
by the parties thereto, and may not be used for any other purpose.
(d) Reliance by Agent and Lenders. The Agent and the Lenders
shall be entitled to rely and act upon any notice (including telephonic
notices of borrowing, Conversion and Continuation) purportedly given by
or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify each Agent-Related Person and each
Lender from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on
behalf of the Borrower. All telephonic notices to and other
communications with the Agent may be recorded by the Agent, and each of
the parties hereto hereby consents to such recording.
Section 15.14 Governing Law; Venue; Service of Process.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED
THAT THE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT,
81
THE BORROWER, THE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE BORROWER, THE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE
BORROWER, THE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY THE LAWS OF SUCH STATE.
Section 15.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 15.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of such Loan Document and the effect thereof shall
be confined to the provision held to be invalid or illegal.
Section 15.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
Section 15.18 Construction. The Borrower, each Guarantor (by its
execution of the Loan Documents to which it is a party), the Agent and each
Lender acknowledges that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by the parties thereto.
Section 15.19 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 15.20 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE
82
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
Section 15.21 Confidentiality. The Agent, each Lender and each
Participant shall use any confidential non-public information concerning the
Borrower and its Subsidiaries that is furnished to the Agent or such Lender by
or on behalf of the Borrower and its Subsidiaries in connection with the Loan
Documents (collectively, "Confidential Information") solely for the purpose of
evaluating and providing products and services to them and administering and
enforcing the Loan Documents, and it will hold the Confidential Information in
confidence. Notwithstanding the foregoing, the Agent and each Lender may
disclose Confidential Information (a) to their Affiliates or any of their or
their Affiliates' directors, officers, employees, auditors, counsel, advisors or
representatives (collectively, the "Representatives") whom it determines need to
know such information for the purposes set forth in this Section, (b) to any
bank or financial institution or other entity to which such Lender has assigned
or desires to assign an interest or participation in the Loan Documents or the
Obligations, provided that any such foregoing recipient of such Confidential
Information agrees to keep such Confidential Information confidential as
specified herein, (c) to any Governmental Authority having or claiming to have
authority to regulate or oversee any aspect of the Agent's or such Lender's
business or that of their Representatives in connection with the exercise of
such authority or claimed authority, (d) to the extent necessary or appropriate
to effect or preserve the Agent's or such Lender's or any of their Affiliates'
security (if any) for any Obligation or to enforce any right or remedy or in
connection with any claims asserted by or against the Agent or such Lender or
any of their Representatives and (e) pursuant to any subpoena or any similar
legal process. For purposes hereof, the term "Confidential Information" shall
not include information that (x) is in the Agent's or a Lender's possession
prior to its being provided by or on behalf of the Borrower or any of its
Subsidiaries; provided that such information is not known by the Agent or such
Lender to be subject to another confidentiality agreement with, or other legal
or contractual obligation of confidentiality to, the Borrower or any of its
Subsidiaries, (y) is or becomes publicly available (other than through a breach
hereof by the Agent or such Lender) or (z) becomes available to the Agent or
such Lender on a nonconfidential basis; provided, further, that the source of
such information was not known by the Agent or such Lender to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information.
Section 15.22 Foreign Lenders. Each Foreign Lender shall deliver to the
Agent, prior to receipt of any payment subject to withholding under the Code (or
after accepting an assignment of an interest herein), two (2) duly signed
completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Agent that such Foreign Lender is entitled to an exemption from, or
reduction of, U.S. withholding tax. Thereafter and from time to time, each such
Foreign Lender shall (a) promptly submit to the Agent such additional duly
83
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant U.S. taxing authorities) as
may then be available under then current U.S. laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Agent of any available
exemption from or reduction of, U.S. withholding taxes in respect of all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement, (b) promptly notify the Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction and (c) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Foreign Lender, and as may be reasonably necessary (including
the re-designation of its Applicable Lending Office) to avoid any requirement of
applicable laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Foreign Lender. If such Foreign Lender fails to
deliver the above forms or other documentation, then the Agent may withhold from
any interest payment to such Foreign Lender an amount equivalent to the
applicable withholding tax imposed by Sections 1441 and 1442 of the Code,
without reduction. If any Governmental Authority asserts that the Agent did not
properly withhold any tax or other amount from payments made in respect of such
Foreign Lender, such Foreign Lender shall indemnify the Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, and costs and expenses
(including Attorney Costs) of the Agent. The obligation of the Lenders under
this Section shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
Section 15.23 Amendment and Restatement. This Agreement amends, restates
and replaces in its entirety the Original Agreement. All rights, benefits,
indebtedness, interest, liabilities and obligations of the parties to the
Original Agreement are hereby amended, restated, replaced and superseded in
their entirety according to the terms and provisions set forth herein. All
indebtedness, liabilities and obligations under the Original Agreement,
including all promissory notes executed by the Borrower pursuant thereto, are
hereby renewed by this Agreement, the Notes and the other Loan Documents
executed by the Borrower pursuant to this Agreement and shall, from and after
the Closing Date, be governed by this Agreement and the other Loan Documents.
The Borrower represents and warrants that as of the date hereof there are no
claims or offsets against, or defenses or counterclaims to, its obligations
under this Agreement, the Original Agreement or any of the other agreements,
documents or instruments executed in connection herewith or therewith. To induce
the Agent and the Lenders to enter into this Agreement, the Borrower waives any
and all such claims, offsets, defenses and counterclaims, whether known or
unknown, arising prior to the Closing Date and relating to the Original
Agreement or this Agreement.
[Remainder of page intentionally left blank]
84
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
XXXXXXXX-SONOMA, INC.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------
Name: XXXXXX X. XXXXXXXX
------------------------------
Title: SVP & CFO
-----------------------------
S-1
AGENT:
BANK OF AMERICA, N.A., as the Agent
By: /s/ XXXX X. XXXXX
--------------------------------
Name: XXXX X. XXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-2
LENDERS:
BANK OF AMERICA, N.A., as a Lender
and as L/C Issuer
Commitment:
$49,000,000
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: XXXX X. XXXXXX
------------------------------
Title: SENIOR VICE PRESIDENT
-----------------------------
S-3
FLEET NATIONAL BANK
Commitment:
$30,000,000
By: /s/ XXXXX X. XXXXXXXX
--------------------------------
Name: XXXXX X. XXXXXXXX
------------------------------
Title: MANAGING DIRECTOR
-----------------------------
S-4
THE BANK OF NEW YORK
Commitment:
$30,000,000
By: /s/ XXXXXXXXX XXXX FUIKS
--------------------------------
Name: XXXXXXXXX XXXX XXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-5
XXXXX FARGO BANK, N.A., as a Lender
Commitment:
$20,000,000
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Name: XXXXXXX XXXXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
By: /s/ XXXXX XXXXXXXXXXX
--------------------------------
Name: XXXXX XXXXXXXXXXX
------------------------------
Title: SVP AND MANAGER
-----------------------------
S-6
JPMORGAN CHASE BANK
Commitment:
$20,000,000
By: /s/ XXXXX X. XXXXXX
--------------------------------
Name: XXXXX X. XXXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-7
UNION BANK OF CALIFORNIA, N.A.
Commitment:
$17,000,000
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Name: XXXXXXX X. XXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-8
U.S. BANK NATIONAL ASSOCIATION
Commitment:
$17,000,000
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: XXXXXXX X. XXXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-9
NATIONAL CITY BANK
Commitment:
$17,000,000
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Name: XXXXXX X. XXXXXXX
------------------------------
Title: VICE PRESIDENT
-----------------------------
S-10
EXHIBIT A
Form of Revolving Note
A-1
EXHIBIT B
Form of Swingline Note
B-1
EXHIBIT C
Form of Assignment and Acceptance
C-1
EXHIBIT D
Form of Compliance Certificate
D-1
EXHIBIT E
Form of Subsidiary Guaranty
E-1
EXHIBIT F
Form of Notice of Borrowings, Conversions, Continuations or Prepayments
F-1
EXHIBIT G
Form of Joinder Agreement
G-1
EXHIBIT H
Form of Acknowledgment of Intercreditor Agreement
S-1
Schedule 1
H-1
Schedule 9.4
Schedule 9.5
Schedule 9.9
Schedule 9.10
Schedule 9.12
Schedule 9.14
Schedule 9.15
Schedule 9.19
Schedule 9.20
Schedule 9.21
Schedule 11.2
Schedule 11.5
Schedule 15.13
