Exhibit 10(i)(1)
CREDIT AGREEMENT
Dated as of April 24, 2003
among
XXXXXXXX, INC.,
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
The Other Lenders Party Hereto
TABLE OF CONTENTS
SECTION PAGE
----
Article I. DEFINITIONS AND ACCOUNTING TERMS................................................................
1.01 Defined Terms...................................................................................
1.02 Other Interpretive Provisions...................................................................
1.03 Accounting Terms................................................................................
1.04 Rounding........................................................................................
1.05 References to Agreements and Laws...............................................................
1.06 Letter of Credit Amounts........................................................................
Article II. THE COMMITMENTS AND CREDIT EXTENSIONS...........................................................
2.01 Committed Loans.................................................................................
2.02 Borrowings, Conversions and Continuations of Committed Loans....................................
2.03 Letters of Credit...............................................................................
2.04 Intentionally Omitted...........................................................................
2.05 Prepayments.....................................................................................
2.06 Reduction or Termination of Commitments.........................................................
2.07 Repayment of Loans..............................................................................
2.08 Interest........................................................................................
2.09 Fees............................................................................................
2.10 Computation of Interest and Fees................................................................
2.11 Evidence of Debt................................................................................
2.12 Payments Generally..............................................................................
2.13 Sharing of Payments.............................................................................
Article III. TAXES, YIELD PROTECTION AND ILLEGALITY..........................................................
3.01 Taxes...........................................................................................
3.02 Illegality......................................................................................
3.03 Inability to Determine Rates....................................................................
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate
Committed Loans.................................................................................
3.05 Funding Losses..................................................................................
3.06 Matters Applicable to all Requests for Compensation.............................................
3.07 Survival........................................................................................
Article IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.......................................................
4.01 Conditions of Initial Credit Extension..........................................................
4.02 Conditions to all Credit Extensions and Conversions and Continuations...........................
Article V. REPRESENTATIONS AND WARRANTIES..................................................................
5.01 Existence, Qualification and Power; Compliance with Laws........................................
5.02 Authorization; No Contravention.................................................................
5.03 Governmental Authorization......................................................................
5.04 Binding Effect..................................................................................
5.05 Financial Statements; No Material Adverse Effect................................................
5.06 Litigation......................................................................................
5.07 No Default......................................................................................
5.08 Ownership of Property; Liens....................................................................
5.09 Environmental Compliance........................................................................
5.10 Insurance.......................................................................................
5.11 Taxes...........................................................................................
5.12 ERISA Compliance................................................................................
5.13 Subsidiaries....................................................................................
5.14 Disclosure......................................................................................
5.15 Compliance with Laws............................................................................
5.16 Margin Regulations, Investment Company Act; Public Holding Company Act..........................
5.17 Rights in Collateral; Priority of Liens.........................................................
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Article VI. AFFIRMATIVE COVENANTS...........................................................................
6.01 Financial Statements............................................................................
6.02 Certificates; Other Information.................................................................
6.03 Notices.........................................................................................
6.04 Payment of Obligations..........................................................................
6.05 Preservation of Existence, Etc..................................................................
6.06 Maintenance of Properties.......................................................................
6.07 Maintenance of Insurance........................................................................
6.08 Compliance with Laws............................................................................
6.09 Books and Records...............................................................................
6.10 Inspection Rights...............................................................................
6.11 Use of Proceeds.................................................................................
6.12 Financial Covenants.............................................................................
6.13 Additional Guarantors...........................................................................
6.14 Collateral Records..............................................................................
6.15 Security Interests..............................................................................
Article VII. NEGATIVE COVENANTS..............................................................................
7.01 Liens...........................................................................................
7.02 Investments.....................................................................................
7.03 Indebtedness....................................................................................
7.04 Fundamental Changes.............................................................................
7.05 Dispositions....................................................................................
7.06 Restricted Payments.............................................................................
7.07 Change in Nature of Business....................................................................
7.08 Transactions with Affiliates....................................................................
7.09 Margin Regulations..............................................................................
Article VIII...................................................................EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default...............................................................................
8.02 Remedies Upon Event of Default..................................................................
8.03 Application of Funds............................................................................
Article IX. AGENT...........................................................................................
9.01 Appointment and Authorization of Agent..........................................................
9.02 Delegation of Duties............................................................................
9.03 Liability of Agent..............................................................................
9.04 Reliance by Agent...............................................................................
9.05 Notice of Default...............................................................................
9.06 Credit Decision; Disclosure of Information by Agent.............................................
9.07 Indemnification of Agent........................................................................
9.08 Agent in its Individual Capacity................................................................
9.09 Successor Agent.................................................................................
9.10 Agent May File Proofs of Claim..................................................................
9.11 Guaranty Matters................................................................................
9.12 Collateral Matters..............................................................................
9.13 Appointment of U.K. Security Trustee ...........................................................
9.14 Agent as U.K. Security Trustee .................................................................
9.15 Liens in Favor of U.K. Security Trustee ........................................................
Article X. MISCELLANEOUS...................................................................................
10.01 Amendments, Etc.................................................................................
10.02 Notices and Other Communications; Facsimile Copies..............................................
10.03 No Waiver; Cumulative Remedies..................................................................
10.04 Attorney Costs, Expenses and Taxes..............................................................
10.05 Indemnification by Borrower.....................................................................
10.06 Payments Set Aside..............................................................................
10.07 Successors and Assigns..........................................................................
10.08 Confidentiality.................................................................................
10.09 Set-off.........................................................................................
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10.10 Interest Rate Limitation........................................................................
10.11 Counterparts....................................................................................
10.12 Integration.....................................................................................
10.13 Survival of Representations and Warranties......................................................
10.14 Severability....................................................................................
10.15 Governing Law; Submission to Jurisdiction.......................................................
10.16 Waiver of Right to Trial by Jury................................................................
10.17 Judgment Currency...............................................................................
SIGNATURES..................................................................................S-1
SCHEDULES
2.01 Commitments and Pro Rata Shares
2.03 Existing Letters of Credit
5.06 Litigation
5.09 Environmental Matters
5.13 Subsidiaries
7.01 Existing Liens
7.03 Existing Indebtedness
7.05 Disposition
10.02 Addresses for Notices
EXHIBITS
FORM OF
A Committed Loan Notice
B Note
C Compliance Certificate
D Assignment and Assumption Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of April 24,
2003, among Xxxxxxxx, Inc., a Delaware corporation ("Borrower"), each lender
from time to time party hereto (collectively, the "Lenders" and individually, a
"Lender"), and BANK OF AMERICA, N.A., as Agent and as U.K. Security Trustee.
Borrower has requested that Lenders provide a revolving credit
facility, and Lenders are willing to do so on the terms and conditions set forth
herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Administrative Agent" or "Agent" means Bank of America in its capacity
as (a) Administrative Agent under any of the Loan Documents, and (b) issuer of
Letters of Credit hereunder, as the context requires, or any successor Agent.
"Affiliate" means, with respect to any Person, another Person that
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by or is under common Control with, the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. Without limiting the
generality of the foregoing, a Person shall be deemed to be Controlled by
another Person if such other Person possesses, directly or indirectly, power to
vote 10% or more of the securities having ordinary voting power for the election
of directors, managing general partners or equivalent governing body of such
Person.
"Agent Fee Letter" has the meaning specified in Section 2.09 (b)
"Agent's Office" means Agent's address and, as appropriate, account as
set forth on Schedule 10.02, or such other address or account as Agent may from
time to time notify Borrower and Lenders.
"Agent-Related Persons" means Agent, together with its Affiliates, and
the officers, directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.
"Aggregate Commitments" means the Commitments of all Lenders; provided,
however, that during the periods listed below, the Aggregate Commitments shall
in no event exceed the amounts shown below:
Calendar Period Amount
--------------- ------
December 1 through June 15 $55,000,000
June 16 through November 30 $45,000,000
"Agreement" means this Credit Agreement.
"Applicable Rate" means, from time to time, the following percentages
per annum, based upon the ratio of average daily Funded Debt to EBITDA (the
"Financial Covenant") as set forth in the most recent Compliance Certificate
received by Agent pursuant to Section 6.02(b):
1
APPLICABLE RATE
Eurodollar Rate
+
Pricing Funded Debt to ________________
Level EBITDA Ratio Commitment Fee Letters of Credit Base Rate +
------------- ------------ -------------- ----------------- -----------
1 Less than or equal to 0.175% 1.375% 0.00%
1.50:1.00
2 Less than or equal to 0.175% 1.50% 0.00%
1.75:1.00 but greater
than 1.50:1.00
3 Less than or equal to 0.175% 1.625% 0.00%
2.00:1.00 but greater
than 1.75:1.00
4 Less than or equal to 0.25% 1.75% 0.00%
2.25:1:00 but greater
than 2.00:1.00
5 Greater than 2.25:1.00 0.25% 1.875% 0.25%
Any increase or decrease in the Applicable Rate resulting from a change
in the Financial Covenant shall become effective commencing on the 5th Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided, however, that if no Compliance
Certificate is delivered when due in accordance with such Section, then Pricing
Level 5 shall apply commencing on the 5th Business Day following the date such
Compliance Certificate was required to have been delivered until the 5th
Business Day immediately following the date a Compliance Certificate is
delivered. The Applicable Rate in effect from the Closing Date through June 23,
2003 shall be determined based upon Pricing Level 3.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit D.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses and
disbursements of internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of Borrower and its Subsidiaries for the fiscal year ended October 31,
2002, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of Borrower and its
Subsidiaries, including the notes thereto.
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of each Lender to make Loans and of the obligation
of Agent to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% 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." The "prime 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.
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"Base Rate Committed Loan" means a Committed Loan that is a Base Rate
Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"BIA" means the Bankruptcy and Insolvency Act (Canada) as amended ( or
any successor statute) and any rule or regulation thereunder.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a Committed Borrowing.
"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 where Agent's Office is located and, if such day
relates to any Eurodollar Rate Committed Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.03(g)
"CCAA" means the Companies' Creditors Arrangement Act, as amended (or
any successor statute) and any rule or regulation thereunder.
"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, and any person or
entity 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 or group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire (such right, an "option
right"), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of the equity securities of
such Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully diluted basis (and, taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right); or
(b) during any period of 12 consecutive months, other
than by reason of removal and/or replacement of any member(s) upon death,
retirement, or disability, 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)
above 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 clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 10.01 (or, in
the case of Section 4.01(b), waived by the Person entitled to receive the
applicable payment).
"Civil Code" means the Civil Code of Quebec, as amended (or any
successor statute) and any rule or regulation thereunder.
"Code" means the Internal Revenue Code of 1986.
"Collateral" shall mean any and all assets and rights and interests in
or to property of Borrower and each of the other Loan Parties, whether real or
personal, movable or immovable, tangible or intangible, in which a Lien is
granted or purported to be granted pursuant to the Collateral Documents.
3
"Collateral Documents" means all agreements, instruments and documents
now or hereafter executed and delivered in connection with this Agreement
pursuant to which Liens are granted or purported to be granted to Agent in
Collateral securing all or part of the Obligations each in form and substance
satisfactory to Agent.
"Commitment" means, as to each Lender, its obligation to (a) make
Committed Loans to Borrower pursuant to Section 2.01, and (b) purchase
participations in L/C Obligations, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01, or in the Assignment and Assumption Agreement pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Committed
Loans, having the same Interest Period made by each of Lenders pursuant to
Section 2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing,
(b) a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Committed Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate".
"Credit Extension" means a Borrowing, or an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
the BIA, the CCAA, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions, foreign or otherwise, from time
to time in effect and affecting the rights of creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate per annum which is 3.0% higher
than the rate of interest otherwise applicable under this Agreement, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to Agent or any
other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"EBITDA" means net income, less income or plus loss from discontinued
operations and extraordinary items, plus income taxes, plus interest expense,
plus depreciation, depletion, and amortization, plus $4,250,000 for the fiscal
quarter ending July 31, 2002. EBITDA shall be calculated at the end of each
fiscal quarter, using the results of that quarter and each of the three (3)
immediately preceding quarters.
"Eligible Assignee" has the meaning specified in Section 10.07(h).
4
"Environmental Laws" means any and all Federal, state, provincial,
local, and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower
or any ERISA Affiliate.
"Eurodollar Base Rate" has the meaning set forth in the definition of
Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Committed Loan, a rate per annum determined by Agent pursuant to
the following formula:
Eurodollar Rate Eurodollar Base Rate
----------------------------------
= 1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by
Agent to be the London interbank offered rate that appears on Page 3750 of the
Telerate screen (or any successor thereto) 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
Business Days prior to the first day of such Interest Period, or
(b) if 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 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 Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum determined by Agent as the rate of
interest 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 Eurodollar
Rate Committed Loan being made, 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 London interbank eurodollar market
at their request at approximately 4:00 p.m. (London time) two Business Days
prior to the first day of such Interest Period.
5
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) 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 of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) applicable to any member bank of the Federal Reserve System with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Eurodollar Rate Committed Loan" means a Committed Loan that bears
interest at a rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Existing Letters of Credit" means the Letters of Credit specified in
Schedule 2.03 hereto.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by Agent.
"Funded Debt" means all outstanding liabilities for borrowed money and
other interest-bearing liabilities, including current and long term liabilities
(including the outstanding Loans and L/C Obligations). Funded Debt shall be
measured as of the last day of each fiscal quarter; except that outstanding
Loans and L/C Obligations shall be calculated on the basis of the average daily
amount of Loans and L/C Obligations outstanding during each fiscal quarter.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state,
provincial, or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Guarantors" means, collectively, Xxxxxxxx Store I, Inc., Xxxxxxxx
Store II, Inc., and Xxxxxxxx Store III, Inc.
"Guaranty" means the Guaranty made by the Guarantors in favor of Agent
on behalf of Lenders, in form and substance satisfactory to Agent.
"Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
6
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap
Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts payable in the
ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of
the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any
date shall be deemed to be the amount of Attributable Indebtedness in respect
thereof as of such date.
"Indemnified Liabilities" has the meaning specified in Section 10.05.
"Indemnitees" has the meaning specified in Section 10.05.
"Information" has the meaning specified in Section 10.08.
"Interest Payment Date" means, (a) as to any Eurodollar Rate Committed
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Committed Loan exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
January, April, July and October and the Maturity Date.
"Interest Period" means as to each Eurodollar Rate Committed Loan, the
period commencing on the date such Eurodollar Rate Committed Loan is disbursed
or converted to or continued as a Eurodollar Rate Committed Loan and ending on
the date one, two, three or six months thereafter, as selected by Borrower in
its Committed Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business Day
unless, such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period shall extend beyond the Maturity
Date.
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"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state,
provincial, and local statutes, treaties, rules, by-laws, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of law.
"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 Pro Rata Share.
"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 Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes Agent in its capacity as issuer of
Letters of Credit hereunder.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such on Schedule 10.02, or such other office or offices as a
Lender may from time to time notify Borrower and Agent.
"Letter of Credit" means any letter of credit issued hereunder and
shall include the Existing Letters of Credit. A Letter of Credit may be a
commercial letter of credit or 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 the form from time to time in
use by Agent.
"Letter of Credit Expiration Date" means, (a) with respect to a
commercial Letter of Credit, the date not greater than 180 days from issuance
date, not to extend more than 90 days beyond the Maturity Date; and (b) with
respect to a standby Letter of Credit, the date not greater than 365 days from
the issuance date, not to extend more than 365 days beyond the Maturity Date.
"Letter of Credit Sublimit" means an amount equal to $30,000,000 with
respect to commercial letters of credit, and $3,000,000 with respect to standby
letters of credit. The Letter of Credit Sublimit is part of, and not in addition
to, the Aggregate Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever, xxxxxx or inchoate (including any conditional sale or other
title retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to Borrower under
Article II in the form of a Committed Loan.
"Loan Documents" means this Agreement, each Note, the Agent Fee Letter,
each Collateral Document, the Guaranty, and such other documents as may be
required hereunder.
8
"Loan Parties" means, collectively, Borrower and each Person (other
than Agent, U.K. Security Trustee or any Lender) executing a Loan Document
including, without limitation, each Guarantor and each Person executing a
Collateral Document.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual and contingent), condition (financial or otherwise) or prospects of
Borrower or Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Maturity Date" means April 30, 2005.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Note" means, means a promissory note made by Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit or any Swap
Contract between any Loan Party and any Lender or any Affiliate of any Lender,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"Outstanding Amount" means (a) with respect to Committed Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to
any borrowings and prepayments or repayments of Committed Loans occurring on
such date; and (b) with respect to any 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 changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of Credit
taking effect on such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBA" means the Pensions Benefits Act of Ontario as amended (and any
successor statute) and any rule or regulation thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA or under the applicable laws of any other
jurisdiction, including the PBA, and is sponsored or maintained by Borrower or
any ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or
has an obligation to contribute, or in the case of a multiple employer or other
plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.
"Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture or Governmental Authority.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by Borrower under the applicable laws of any
jurisdiction or, with respect to any such plan that is subject to Section 412 of
the Code or Title IV of ERISA, any ERISA Affiliate.
9
"PPSA" means the Personal Property Security Act of Ontario (or any
successor statute) or similar legislation (including, without limitation, the
Civil Code) of any other jurisdiction the laws of which are required by such
legislation to be applied in connection with the issue, perfection, enforcement,
validity or effect of security interests.
"Pro Rata Share" means, with respect to each Lender, at any time, a
fraction (expressed as a percentage), carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of Agent to make L/C Credit Extensions have been terminated pursuant
to Section 8.02, then the Pro Rata Share of each Lender shall be determined
based on the Pro Rata Share of such Lender immediately prior to such termination
and after giving effect to any subsequent assignments made pursuant to Section
10.07. The initial Pro Rata Share of each Lender is set forth opposite the name
of such Lender on Schedule 2.01 or in the Assignment and Assumption Agreement
pursuant to which such Lender becomes a party hereto, as applicable.
"Quick Assets" means cash, short-term cash investments, net trade
receivables and marketable securities not classified as long-term investments.
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders
having more than 66 2/3% of the Aggregate Commitments or, if the commitment of
each Lender to make Loans and the obligation of Agent to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 66 2/3% of 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); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders; and provided, further, in the event two (2)
or more Lenders consolidate or merge in or with each other such that the merged,
resulting Lender's pro rata share is 66 2/3% or more of the Aggregate
Commitment, or Total Outstandings, as the case may be as set forth herein, then
Required Lenders shall mean two (2) or more Lenders holding in the aggregate
more than 66 2/3% of the Total Commitment.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other equity interest of Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest, and excluding any distribution of stock options, or
distribution of shares of common stock upon the exercise of such stock options,
to employees, directors or consultants of Borrower or any of its Subsidiaries.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and
10
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"Master Agreement"), including any such obligations or liabilities under any
Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which shall include a Lender or any Affiliate of
a Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Tangible Net Worth" means the value of total assets (including
leaseholds and leasehold improvements and reserves against assets but excluding
goodwill, patents, trademarks, trade names, organization expense, unamortized
debt discount and expense, capitalized or deferred research and development
costs, deferred marketing expenses, and other like intangibles, and monies due
from Affiliates, officers, directors, employees, shareholders, members or
managers) less Total Liabilities, including but not limited to accrued and
deferred income taxes.
"Taxes" has the meaning specified in Section 3.01(a).
"Termination Event" means (a) the whole or partial withdrawal of any
Loan Party from a Plan during a plan year; or (b) the filing of a notice of
interest to terminate in whole or in part a Plan or the treatment of a Plan
amendment as a termination of partial termination; or (c) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or
have a trustee appointed to administer a Plan; or (d) any other event or
condition which might constitute grounds for the termination of, winding up or
partial termination of winding up or the appointment of trustee to administer,
any Plan.
"Threshold Amount" means $500,000.
"Total Liabilities" means the sum of current liabilities plus long term
liabilities.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Trust Property" means all or any of the assets, rights, powers,
authorities, and discretions at any time subject to or expressed to be subject
to the security from time to time constituted by or arising pursuant to the U.K.
Security Documents or rested in the U.K. Security Trustee or given under or
pursuant to the U.K. Security Documents including all income and other sums at
any time received or receivable by the U.K. Security Trustee in respect thereof.
"Type" means with respect to a Committed Loan, its character as a Base
Rate Committed Loan or a Eurodollar Rate Committed Loan.
"U.K. Security Documents" means the Collateral Documents governed by
English law in terms of which the U.K. Security Trustee holds the security
thereby created for the benefit of the Agent, Administrative Agent, Bank of
America, and the Lenders and any other document from time to time granted as
security for the Obligations in favor of the U.K. Security Trustee for the
benefit of the Agent, Administrative Agent, Bank of America and the Lenders.
"U.K. Security Trustee" means Bank of America in its capacity as
security trustee of the security created by the U.K. Security Documents.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year, and in the case of any Pension Plan or Plan regulated by
the PBA or the applicable laws of any jurisdiction, any unfunded or solvency
deficiency as determined under the PBA or other applicable law.
11
"United States," and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms.
(b) (i) The words "herein", "hereto", "hereof" and
"hereunder" and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision
thereof; (ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears; (iii) the term "including" is by way
of example and not limitation; and (iv) the term "documents" includes any and
all instruments, documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced, whether in physical
or electronic form.
(c) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but excluding;" and the
word "through" means "to and including."
(d) Section headings herein and in the other Loan
Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either Borrower or the Required Lenders shall so request, Agent,
Lenders and 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, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) Borrower shall
provide to Agent and Lenders financial statements and other documents required
under this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by
any Loan Party pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 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.
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS.
2.01 COMMITTED LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Committed
Loan") to Borrower from time to time, on any Business Day during the
Availability Period , in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any
12
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, shall not exceed such Lender's Commitment. Within the limits of
each Lender's Commitment, and subject to the other terms and conditions hereof,
Borrower may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01. Committed Loans may be Base Rate Committed
Loans or Eurodollar Rate Committed Loans, as further provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.
(a) Each Committed Borrowing, each conversion of
Committed Loans from one Type to the other, and each continuation of Eurodollar
Rate Committed Loans shall be made upon Borrower's irrevocable notice to Agent,
which may be given by telephone. Each such notice must be received by Agent not
later than 11:00 a.m., Los Angeles time, (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to
Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of
Base Rate Committed Loans Each telephonic notice by Borrower pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of Borrower. Except as provided in Section 2.03(c), each Borrowing of,
conversion to or continuation of Eurodollar Rate Committed Loans shall be in a
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof. Each Borrowing of or conversion to Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether Borrower is requesting a Committed Borrowing, a conversion
of Committed Loans from one Type to the other, or a continuation of Eurodollar
Rate Committed Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If Borrower fails to specify a Type of Committed Loan in a
Committed Loan Notice or if Borrower fails to give a timely notice requesting a
conversion or continuation, then the applicable Committed Loans shall be made,
or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Committed Loans. If
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Committed Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month.
(b) Following receipt of a Committed Loan Notice, Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by Borrower, Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Committed Borrowing, each Lender shall
make the amount of its Committed Loan available to Agent in immediately
available funds at Agent's Office not later than 1:00 p.m., Los Angeles time, on
the Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), Agent shall make
all funds so received available to Borrower in like funds as received by Agent
either by (i) crediting the account of Borrower on the books of Bank of America
with the amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable to) Agent
by Borrower; provided, however, that if, on the date of the Committed Loan
Notice with respect to such Borrowing is given by 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
Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar
Rate Committed Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Committed Loan. During the existence of
a Default, no Loans may be requested as, converted to or continued as Eurodollar
Rate Committed Loans without the consent of the Required Lenders, and the
Required Lenders may demand that any or all of the then outstanding Eurodollar
Rate Committed Loans be converted immediately to Base Rate Committed Loans and
Borrower agrees to pay all amounts due under Section 3.05 in accordance with the
terms thereof due to any such conversion.
(d) Agent shall promptly notify Borrower and Lenders of
the interest rate applicable to any Interest Period for Eurodollar Rate
Committed Loans upon determination of such interest rate. The determination of
the Eurodollar Rate by Agent shall be conclusive in the absence of manifest
error.
(e) After giving effect to all Committed Borrowings, all
conversions of Committed Loans from one Type to the other, and all continuations
of Committed Loans as the same Type, there shall not be more than six Interest
Periods in effect with respect to Committed Loans.
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2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set
forth herein, (A) Agent agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.03: (1) from time to time on
any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the
account of Borrower [or certain Subsidiaries], and to amend [or renew]
Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drafts under the Letters of
Credit; and (B) Lenders severally agree to participate in Letters of
Credit issued for the account of Borrower; provided that Agent shall
not be obligated to make any L/C Credit Extension with respect to any
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 Committed Loans of any Lender,
plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations would exceed 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, Borrower's ability to obtain Letters of Credit
shall be fully revolving, and accordingly 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. Each
Existing Letter 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.
(ii) Agent shall be under no obligation to issue
any Letter of Credit if:
(A) any order, judgment or decree of
any Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain Agent from issuing such Letter
of Credit, or any Law applicable to Agent or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Agent shall
prohibit, or request that Agent refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon Agent with respect to such
Letter of Credit any restriction, reserve or capital
requirement (for which Agent is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose
upon Agent any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which Agent in good
xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iv), the
expiry date of such requested Letter of Credit would occur
more than twelve months after the date of issuance or last
renewal, unless the Required Lenders have approved such expiry
date;
(C) the expiry date of such requested
standby Letter of Credit would occur after the Maturity Date,
unless Borrower shall, on or before the Maturity Date, Cash
Collaterize (as defined in Section 2.03(g) hereof), the
Outstanding Amount of such Letter of Credit;
(D) the issuance of such Letter of
Credit would violate one or more policies of Agent; or
(E) such Letter of Credit is in an
initial amount less than $10,000, in the case of a commercial
Letter of Credit, or $50,000, in the case of a standby Letter
of Credit, or is to be denominated in a currency other than
Dollars.
(iii) Agent shall be under no obligation to amend
any Letter of Credit if (A) Agent would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(iv) Each commercial Letter of Credit will
require drafts payable at sight or up to 60 days after sight.
(b) Procedures for Issuance and Amendment of Letters of
Credit; Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of Borrower delivered to
Agent in the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of Borrower. Such Letter
of Credit Application must be received by Agent not later than 11:00
a.m., Los Angeles time, at least two Business Days (or such later date
and time as Agent 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.
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(ii) Promptly after receipt of any Letter of
Credit Application by Agent at the address set forth in Schedule 10.02
for receiving Letter of Credit Applications and related correspondence,
if the requested issuance or amendment is permitted in accordance with
the terms hereof, then, subject to the terms and conditions hereof,
Agent shall, on the requested date, issue a Letter of Credit for the
account of Borrower or applicable Subsidiary or enter into the
applicable amendment, as the case may be, in each case in accordance
with Agent'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
Agent a risk participation in such Letter of Credit in an amount equal
to the product of such Lender's Pro Rata Share times the amount of such
Letter of Credit.
(iii) 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, Agent will also deliver
to Borrower a true and complete copy of such Letter of Credit or
amendment.
(iv) If Borrower so requests in any applicable
Letter of Credit Application, Agent may, in it sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an "Auto-Renewal Letter of Credit"); provided
that any such Auto-Renewal Letter of Credit must permit Agent to
prevent any such renewal 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 "Nonrenewal Notice Date") in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by Agent, Borrower shall not be required to make a
specific request to Agent for any such renewal. Once an Auto-Renewal
Letter of Credit has been issued, Lenders shall be deemed to have
authorized (but may not require) Agent to permit the renewal of such
Letter of Credit at any time to an expiry date not later than the
Letter of Credit Expiration Date; provided, however, that Agent shall
not permit any such renewal if (A) Agent has determined that it would
have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of Section 2.03(a)(ii)
or otherwise), or (B) it has received notice (which may be by telephone
or in writing) at least five (5) Business Days before the Nonrenewal
Notice Date (1) from the Required Lenders that they have elected not to
permit such renewal or (2) from any Lender or Borrower that one or more
of the applicable conditions specified in Section 4.02 is not then
satisfied. Notwithstanding anything to the contrary contained herein,
Agent shall have no obligation to permit the renewal of any
Auto-Renewal Letter of Credit at any time.
(c) Drawings and Reimbursements; Funding of
Participations.
(i) Upon receipt from the beneficiary of any
Letter of Credit of any notice of drawing under such Letter of Credit,
Agent shall notify Borrower thereof. Not later than 10:00 a.m., Los
Angeles time, on the date of any payment by Agent under a Letter of
Credit (each such date, an "Honor Date")(or the next succeeding
Business Day if notice of drawing was received by Borrower after 10:00
a.m., Los Angeles time, on the Honor Date), Borrower shall reimburse
Agent in an amount equal to the amount of such drawing. If Borrower
fails to so reimburse Agent by such time, 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 Pro Rata
Share thereof. In such event, Borrower shall be deemed to have
requested a Committed Borrowing of Base Rate Loans to be disbursed on
the Honor Date in an amount equal to the Unreimbursed Amount, without
regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan
Notice). Any notice given by Agent pursuant to this Section 2.03(c)(i)
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.
(ii) Each Lender (including Agent in its capacity
as a Lender) shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to Agent at Agent's Office in an amount equal to its
Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m., Los
Angeles time, on the Business Day specified in such notice by Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each
Lender that so makes funds available shall be deemed to have made a
Base Rate Committed Loan to Borrower in such amount.
(iii) With respect to any Unreimbursed Amount that
is not fully refinanced by a Committed Borrowing of Base Rate Loans
because the conditions set forth in Section 4.02 cannot be satisfied or
for any other reason, Borrower shall be deemed to have incurred from
Agent 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 Agent pursuant to Section
2.03(c)(ii) 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 Section
2.03.
15
(iv) Until each Lender funds its Committed Loan
or L/C Advance pursuant to this Section 2.03(c) to reimburse Agent for
any amount drawn under any Letter of Credit, interest in respect of
such Lender's Pro Rata Share of such amount shall be solely for the
account of Agent.
(v) Each Lender's obligation to make Committed
Loans or L/C Advances to reimburse Agent for amounts drawn under
Letters of Credit, as contemplated by this Section 2.03(c), shall be
absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against Agent,
Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default; or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing. No
such making of an L/C Advance shall relieve or otherwise impair the
obligation of Borrower to reimburse Agent for the amount of any payment
made by Agent under any Letter of Credit, together with interest as
provided herein.
(vi) If any Lender fails to make available to
Agent any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), Agent shall be entitled to recover from such
Lender, 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 Agent at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of
Agent submitted to any Lender with respect to any amounts owing under
this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after Agent 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 2.03(c), if Agent receives any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from
Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by Agent), Agent will distribute to such Lender its Pro Rata
Share 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 Agent.
(ii) If any payment received by Agent pursuant to
Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.06 (including pursuant to any
settlement entered into by Agent in its discretion, each Lender shall
pay to Agent its Pro Rata Share thereof on demand of 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.
(e) Obligations Absolute. The obligation of Borrower to
reimburse Agent 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 thereto;
(ii) the existence of any claim, counterclaim,
set-off, defense or other right that 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), Agent 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; 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 Agent 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 in the absence
of gross negligence or willful misconduct by Agent; or any payment made
by Agent 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 Debtor Relief Law; or
(v) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Borrower.
16
Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with Borrower's instructions or
other irregularity, Borrower will promptly notify Agent. Borrower shall
be conclusively deemed to have waived any such claim against Agent and
its correspondents unless such notice is given as aforesaid.
(f) Role of Agent. Each Lender and Borrower agree that,
in paying any drawing under a Letter of Credit, Agent shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of Agent, any
Agent-Related Person nor any of the respective correspondents, participants or
assignees of Agent shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of 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. 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, however, that this assumption is
not intended to, and shall not, preclude 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 Agent, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of Agent, shall be liable
or responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, Borrower may have a claim against Agent, and Agent may
be liable to Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by Borrower which
Borrower proves were caused by Agent's willful misconduct or gross negligence or
Agent'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, Agent 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 Agent 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.
(g) Cash Collateral. Upon the request of Agent, (i) if
Agent has honored any full or partial drawing request under any Letter of Credit
and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter
of Credit Expiration Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to such Outstanding Amount determined as of the date of such L/C Borrowing
or the Letter of Credit Expiration Date, as the case may be). For purposes
hereof, "Cash Collateralize" means to pledge and deposit with or deliver to
Agent, for the benefit of Agent, as issuer of Letters of Credit and Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to Agent (which documents are
hereby consented to by Lenders). Derivatives of such term have corresponding
meanings. Borrower hereby grants to Agent, for the benefit of Agent, as issuer
of Letters of Credit and 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.
(h) Applicability of ISP98 and UCP. Unless otherwise
expressly agreed by Agent and Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), (i)
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, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(i) Letter of Credit Fees. Borrower shall pay to Agent
for the account of each Lender in accordance with its Pro Rata Share a letter of
credit fee for each standby Letter of Credit equal to the Applicable Rate 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). Such letter of credit fees shall be computed on a quarterly basis in
arrears. Such letter of credit fees shall be due and payable on the last
Business Day of each January, April, July and October, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the actual daily amount of each standby
Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.
(j) Fronting Fee and Documentary and Processing Charges
Payable to Agent. Borrower shall pay directly to Agent for its own account a
fronting fee with respect to each standby Letter of Credit equal to 1/8 of 1%
per annum of the daily maximum amount available to be drawn thereunder (whether
or not such maximum amount is then in effect under such Letter of Credit), due
and
17
payable quarterly in arrears on the last Business Day of each January, April,
July and October, commencing with the first such date to occur after the
issuance of such Letter of Credit, and on the Letter of Credit Expiration Date.
In addition, Borrower shall pay directly to Agent for its own account the
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of Agent relating to Letters of Credit as from time
to time in effect, as disclosed by the Agent in writing to the Borrower from
time to time. Such customary fees and standard costs and charges are due and
payable on demand and are nonrefundable.
(k) 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.
2.04 INTENTIONALLY OMITTED.
2.05 PREPAYMENTS.
(a) Upon notice to Agent, the Borrower may, at any time
or from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
Agent not later than 11:00 a.m., Los Angeles time, (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Committed Loans, and (B) on the
date of prepayment of Base Rate Committed Loans; (ii) any prepayment of
Eurodollar Rate Committed Loans shall be in a principal amount of $1,000,000 or
a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base
Rate Committed Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof, or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid. Agent will promptly notify each Lender of its receipt of each such
notice, and of the amount of such Lender's Pro Rata Share of such prepayment. If
such notice is given by Borrower, Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Committed Loan shall be
accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05. Each such prepayment shall be applied
to the Committed Loans of Lenders in accordance with their respective Pro Rata
Shares.
(b) If for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, Borrower shall immediately
prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess;
2.06 REDUCTION OR TERMINATION OF COMMITMENTS. Upon notice to Agent,
the Borrower may terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments and the Borrower shall permanently
reduce the Aggregate Commitments in an amount equal to 100% of the net cash
proceeds from the issuance of equity by the Borrower or any of its Subsidiaries
(excluding proceeds from the exercise of stock options by employees, directors
and consultants of the Borrower or any Subsidiary); provided that (i) any such
notice shall be received by Agent not later than 11:00 a.m., five Business Days
prior to the date of termination or reduction, (ii) any such partial reduction
shall be in an aggregate amount of $5,000,000 or any whole multiple of
$1,000,000 in excess thereof, (iii) Borrower shall not terminate or reduce the
Aggregate Commitments if, after giving effect thereto and to any concurrent
prepayments hereunder, the Total Outstandings would exceed the Aggregate
Commitments and (iv) if, after giving effect to any reduction of the Aggregate
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. Agent will promptly notify Lenders of any such notice of termination or
reduction of the Aggregate Commitments. Once reduced in accordance with this
Section, the Aggregate Commitments may not be increased. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share. All commitment fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.
2.07 REPAYMENT OF LOANS. Borrower shall repay to Lenders on the
Maturity Date the aggregate principal amount of Committed Loans outstanding on
such date.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below,
(i) each Eurodollar Rate Committed Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii)
each Base Rate Committed Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate plus the Applicable Rate;
(b) If any amount payable by Borrower under any Loan
Document is not paid when due (without regard to any applicable grace periods),
whether at stated maturity by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
Furthermore, while any Event of Default exists, Borrower shall pay interest on
the principal amount of all outstanding Obligations at a fluctuating interest
rate per
18
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand. The Agent
shall notify the Borrower of the effective date of the Default Rate.
(c) Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.
2.09 FEES. In addition to certain fees described in subsections (i)
and (j) of Section 2.03 (a) Commitment Fee. Borrower shall pay to Agent for the
account of each Lender in accordance with its Pro Rata Share, a commitment fee
equal to the Applicable Rate times the actual daily amount by which the
Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Committed
Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee
shall accrue at all times during the Availability Period, including at any time
during which one or more conditions in Article IV is not met, and shall be due
and payable quarterly in arrears on the last Business Day of each January,
April, July and October, commencing with the first such date to occur after the
Closing Date, and on the Maturity Date. The commitment fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate during
any quarter, the actual daily amount shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.
(b) Agency Fees. Borrower shall pay certain fees to Agent
for Agent's own account, in the amounts and at the times specified in the letter
agreement, dated February 20, 2003 (the "Agent Fee Letter"), between Borrower
and Agent. Such fees shall be fully earned when paid and shall be nonrefundable
for any reason whatsoever.
(c) Lenders' Upfront Fee. On the Closing Date, Borrower
shall pay to Agent, for the account of each Lender in accordance with their
respective Pro Rata Shares, an upfront fee of $76,875. Such upfront fees are for
the credit facilities committed by Lenders under this Agreement and are fully
earned on the date paid. The upfront fee paid to each Lender is solely for its
own account and is nonrefundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's prime
rate shall be made on the basis of a year of 365 or 366 days, as the case may
be. All other computations of interest and all fees shall be made on the basis
of a year of 360 days and the actual number of days elapsed, (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365 day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day.
2.11 EVIDENCE OF DEBT. (a) The Credit Extensions made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and by Agent in the ordinary course of business. The accounts or records
maintained by Agent and each Lender shall be conclusive absent manifest error of
the amount of the Credit Extensions made by Lenders to Borrower and the interest
and payments thereon. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of Borrower hereunder to
pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of Agent in respect of such matters, the accounts and
records of Agent shall control in the absence of manifest error. Upon the
request of any Lender made through Agent, Borrower shall execute and deliver to
such Lender (through Agent) a Note, which shall evidence, such Lender's Loans,
in addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
the applicable Loans and payments with respect thereto. (b) In addition to the
accounts and records referred to in subsection (a), each Lender and Agent shall
maintain in accordance with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit.
In the event of any conflict between the accounts and records maintained by
Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of Agent shall control in the absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) (i) All payments to be made by Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by Borrower
hereunder shall be made to Agent, for the account of the respective Lenders to
which such payment is owed, at Agent's Office in Dollars and in immediately
available funds not later than 12:00 noon, Los Angeles time, on the date
specified herein. Agent will promptly distribute to each Lender its Pro Rata
Share (or other applicable share as provided herein) of such payment in like
funds as received by wire transfer to such Lender's Lending Office. All payments
received by Agent after 12:00 noon, Los Angeles time, shall be deemed received
on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.
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(ii) On each date when the payment of any principal,
interest or fees are due hereunder or under any Note, Borrower agrees to
maintain on deposit in an ordinary checking account maintained by Borrower with
Agent (as such account shall be designated by Borrower in a written notice to
Agent from time to time, the "Borrower Account") an amount sufficient to pay
such principal, interest or fees in full on such date. Borrower hereby
authorizes Agent (A) to deduct automatically all principal, interest or fees
when due hereunder or under any Note from Borrower Account, and (B) if and to
the extent any payment of principal, interest or fees under this Agreement or
any Note is not made when due to deduct any such amount from any or all of the
accounts of Borrower maintained at Agent. Agent agrees to provide written notice
to Borrower of any automatic deduction made pursuant to this Section 2.12(a)(ii)
showing in reasonable detail the amounts of such deduction. Lenders agree to
reimburse Borrower based on their Pro Rata Share for any amounts deducted from
such accounts in excess of amount due hereunder and under any other Loan
Documents.
(b) If any payment to be made by Borrower shall come due
on a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.
(c) Unless Borrower or any Lender has notified Agent,
prior to the date any payment is required to be made by it to Agent hereunder,
that Borrower or such Lender, as the case may be, will not make such payment,
Agent may assume that Borrower or such Lender, as the case may be, has timely
made such payment and may (but shall not be so required to), in reliance
thereon, make available a corresponding amount to the Person entitled thereto.
If and to the extent that such payment was not in fact made to Agent in
immediately available funds, then:
(i) if Borrower failed to make such payment,
each Lender shall forthwith on demand repay to Agent the portion of
such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by Agent to such Lender to the date such amount is repaid to Agent in
immediately available funds, at the Federal Funds Rate from time to
time in effect; and
(ii) if any Lender failed to make such payment,
such Lender shall forthwith on demand pay to Agent the amount thereof
in immediately available funds, together with interest thereon for the
period from the date such amount was made available by Agent to
Borrower to the date such amount is recovered by 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
Agent, then such amount shall constitute such Lender's Committed Loan
included in the applicable Borrowing. If such Lender does not pay such
amount forthwith upon Agent's demand therefor, Agent may make a demand
therefor upon Borrower, and Borrower shall pay such amount to Agent,
together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment or to prejudice any rights
which Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.
A notice of Agent to any Lender or Borrower with respect to any amount
owing under this subsection (c) shall be conclusive, absent manifest error.
(d) If any Lender makes available to Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to Borrower by Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, Agent shall return
such funds (in like funds as received from such Lender) to such Lender, without
interest.
(e) The obligations of Lenders hereunder to make
Committed Loans and to fund participations in Letters of Credit are several and
not joint. The failure of any Lender to make any Committed Loan or to fund any
such participation on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Committed Loan or purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of Committed Loans made by
it, or the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify Agent of such fact,
and (b) purchase from the other Lenders such participations in the Committed
Loans made by them and/or such subparticipations in the participations in L/C
Obligations held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Committed
Loans or such participations, as the case may be, pro
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rata with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender under any of
the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. Borrower agrees that any Lender so purchasing
a participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation. Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify Lenders following any such purchases or repayments. Each Lender that
purchases a participation pursuant to this Section shall from and after such
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by Borrower to or for the
account of Agent or any Lender under any Loan Document shall be made free and
clear of and without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and all liabilities with respect thereto, excluding, in the case of Agent and
each Lender, taxes imposed on or measured by its overall net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which Agent or such
Lender, as the case may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as "Taxes"). If Borrower shall be required by any Laws to deduct any Taxes, or
the Agent or any Lender shall be liable to remit any Taxes, in either case from
or in respect of any sum payable under any Loan Document to Agent or any Lender,
(i) the sum payable shall be increased as necessary so that after making all
required deductions or remittance (including deductions applicable to additional
sums payable under this Section), each of Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) Borrower shall make such deductions, (iii) Borrower shall pay to the extent
required of it the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, Borrower shall furnish to Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, Borrower agrees to pay any and all
present or future stamp, court or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes").
(c) If Borrower shall be required to deduct or pay any
Taxes or Other Taxes, or the Agent or any Lender shall be liable to remit any
Taxes, in either case from or in respect of any sum payable under any Loan
Document to Agent or any Lender, Borrower shall also pay to Agent or to such
Lender, at the time interest is paid, such additional amount that Agent or such
Lender specifies is necessary to preserve the after-tax yield (after factoring
in all taxes, including taxes imposed on or measured by net income) that Agent
or such Lender would have received if such Taxes or Other Taxes had not been
imposed.
(d) Borrower agrees to indemnify Agent and each Lender
for (i) 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) paid by or assessable against Agent and/or such Lender (including any
amounts required to be remitted by it or them on account of withholding taxes),
(ii) amounts payable under Section 3.01(a) or Section 3.01(c) and (iii) any
liability (including additions to tax, penalties, interest and expenses,
including from any failure by Agent or any Lender to make any remittance
provided such failure was inadvertent) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within 30 days after the date Lender or
Agent makes a demand therefor.
(e) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if requested
in writing by the Borrower or the Agent (but only so long as such Lender remains
lawfully able to do so), shall provide the Borrower and the Agent with (i)
Internal Revenue Service Form W-8 BEN or W-8 ECI, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying
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that such Lender is entitled to benefits under an income tax treaty to which the
United States is a party which reduces to zero the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Credit Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and/or (iii) any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Lender is entitled to an exemption
from tax on payments pursuant to this Credit Agreement or any of the other
Credit Documents.
(f) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form pursuant
to Section 3.01(e) (unless such failure is due to a change in treat, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 3.01(a) or 3.01(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt from
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(g) If any Loan Party is required to pay additional
amounts to or for the account of any Lender pursuant to this Section 3.01, then
such Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.
3.02 ILLEGALITY. If any Lender reasonably determines that any Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Committed Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, then, on notice thereof by such Lender to
Borrower through Agent, any obligation of such Lender to make or continue
Eurodollar Rate Committed Loans or to convert Base Rate Committed Loans to
Eurodollar Rate Committed Loans shall be suspended until such Lender notifies
Agent and Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, Borrower shall, upon demand from such
Lender (with a copy to Agent), prepay or, if applicable, convert all Eurodollar
Rate Committed Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Committed Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Committed
Loans. Upon any such prepayment or conversion, Borrower shall also pay accrued
interest on the amount so prepaid or converted and all amounts due under Section
3.05 in accordance with the terms thereof due to such prepayment or conversion.
Each Lender agrees to designate a different Lending Office if such designation
will avoid the need for such notice and will not, in the good faith judgment of
such Lender, otherwise be materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If Agent determines in
connection with any request for a Eurodollar Rate Committed Loan or a conversion
to or continuation thereof for any reason that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Committed Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Committed
Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Committed Loan does not adequately and fairly
reflect the cost to Lenders of funding such Eurodollar Rate Committed Loan,
Agent will promptly so notify Borrower and all Lenders. Thereafter, the
obligation of Lenders to make or maintain Eurodollar Rate Committed Loans shall
be suspended until Agent revokes such notice. Upon receipt of such notice,
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Committed Loans or, failing that, will be deemed
to have converted such request into a request for a Committed Borrowing of Base
Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES
ON EURODOLLAR RATE COMMITTED LOANS.
(a) If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, or such
Lender's compliance therewith, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining Eurodollar Rate
Committed Loans or (as the case may be) issuing or participating in Letters of
Credit, or a reduction in the amount received or receivable by such Lender in
connection with any of the foregoing (excluding for purposes of this subsection
(a) any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis
of taxation of overall net income or overall gross income by the United States
or any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which such Lender is organized or has its Lending Office, and (iii)
reserve requirements utilized, as to Eurodollar Rate Committed Loans, in the
determination of the Eurodollar Rate), then from time to time upon demand of
such Lender (with a copy of such demand to Agent), Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction. Each Lender agrees to designate a different Lending Office if
such designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to such
Lender.
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(b) If any Lender determines that the introduction of any
Law regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has 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 (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to Agent), Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to
Agent) from time to time, Borrower shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:
(a) any continuation, conversion, payment or prepayment
of any Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or convert
any Loan other than a Base Rate Loan on the date or in the amount notified by
Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
Borrower shall also pay any customary administrative fees charged by such Lender
in connection with the foregoing.
For purposes of calculating amounts payable by Borrower to Lenders under this
Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate
Committed Loan made by it at the Eurodollar Base Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Committed Loan was in fact so
funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A
certificate of Agent or any Lender claiming compensation under this Article III
and setting forth the calculation of the additional amount or amounts to be paid
to it hereunder shall be delivered with any such claim and shall be conclusive
in the absence of manifest error. In determining such amount, Agent or such
Lender may use any reasonable averaging and attribution methods.
3.07 SURVIVAL. All of Borrower's obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) Agent's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to Agent and its legal counsel:
(i) executed counterparts of this Agreement, all
Collateral Documents and the Guaranty, sufficient in number for
distribution to Agent, each Lender and Borrower;
(ii) a Note executed by Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a
party;
(iv) such documents and certificates as Agent may
reasonably require to evidence that each Loan Party is duly organized
or formed and that Borrower and each Guarantor is, validly existing, in
good standing and qualified to engage in business in each jurisdiction
(including the provinces of Canada) where its ownership, lease or
operation of properties or the
23
conduct of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;
(v) an opinion of counsel to the Loan Parties acceptable
to Agent, addressed to Agent and each Lender, as to such matters
concerning the Loan Parties and the Loan Documents in form and
substance satisfactory to Agent; provided, however, that no opinion of
counsel shall be required in respect of any documents that are governed
by any law other than the Federal laws of the United States of America,
the laws of the State of California and the laws of the United Kingdom.
(vi) a certificate signed by a Responsible Officer of
Borrower certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied, (B) that there has been no event
or circumstance since the date of the Audited Financial that has had or
could reasonably be expected to have a Material Adverse Effect[, and
(C) a calculation of the financial covenants set forth in Section 6.12
as of the last day of the fiscal quarter of Borrower most recently
ended prior to the Closing Date;
(vii) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect; and
(viii) such other assurances, certificates, documents,
consents ,evidence of perfection of all Liens securing the
Obligations(in the applicable province of Canada, under the PPSA or
similar statute, in the United Kingdom, and in each applicable state of
the U. S.) and opinions as the Agent or the Required Lenders reasonably
may require.
(b) Any fees required to be paid on or before the Closing Date
shall have been paid.
(c) Unless waived by Agent, Borrower shall have paid all Attorney
Costs of Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute its reasonable estimate
of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between Borrower and Agent).
(d) The Closing Date shall have occurred on or before April 30,
2003.
(e) Agent shall have received, in form and substance satisfactory
to it, such other assurances, certificates, documents or consents related to the
foregoing as Agent or the Required Lenders reasonably may require; provided,
however, that Agent shall have received the fully executed Consent to Removal of
Personal Property with respect to the real property commonly known as 0000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000, on or before June 24, 2003.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS AND CONVERSIONS
AND CONTINUATIONS. The obligation of each Lender to honor any Request for Credit
Extension is subject to the following conditions precedent:
(a) The representations and warranties of Borrower and
each other Loan Party contained in Article V or any other Loan Document, or
which are contained in any document furnished at any time under or in connection
herewith, shall be true and correct on and as of the date of such Credit
Extension, conversion or continuation, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.
(b) No Default shall exist, or would result from such
proposed Credit Extension, conversion or continuation.
(c) Agent shall have received a Request for Credit
Extension in accordance with the requirements hereof.
(d) Agent shall have received, in form and substance
satisfactory to it, such other assurances, certificates, documents or consents
related to the foregoing as Agent or the Required Lenders reasonably may
require.
Each Request for Credit Extension submitted by Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Agent, the U.K. Security Trustee
and Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Loan Party (a) is duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver, and perform its
obligations under the Loan Documents to which it is a party, and (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction (including the provinces of Canada) where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or licenses, except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, (i) any material
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document except for
filings related to perfection of Liens.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present the financial
condition of Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of Borrower and its Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness.
(b) The unaudited consolidated financial statements of
Borrower and its Subsidiaries dated January 31, 2003, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and; (ii) fairly present the financial
condition of Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.
(c) Since the date of the Audited Financial Statements,
there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.
5.06 LITIGATION. Except as specifically disclosed in Schedule 5.06
hereto, there are no actions, suits, proceedings, claims or disputes pending or,
to the knowledge of Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against Borrower or any
of its Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby, and, if arising after the Closing
Date, in which there is a reasonably possibility of an adverse result or (b)
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
25
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of Borrower and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of Borrower and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.
5.09 ENVIRONMENTAL COMPLIANCE. Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof Borrower has reasonably concluded that,
except as specifically disclosed in Schedule 5.09 hereto, such Environmental
Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of Borrower, in such amounts, after giving effect to any self-insurance
compatible with the following standards, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where Borrower or the applicable
Subsidiary operates.
5.11 TAXES. Borrower and its Subsidiaries have filed all Federal,
state, provincial, municipal and other material tax returns and reports required
to be filed, and have paid all Federal, state, provincial, municipal and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code, the PBA and other Federal,
state, or provincial Laws, as applicable. Each Plan that is intended to qualify
under Section 401(a) of the Code has received a favorable determination letter
from the IRS or an application for such a letter is currently being processed by
the IRS with respect thereto and, to the best knowledge of Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification. Borrower
and each ERISA Affiliate have made all required contributions to each Plan when
due, and no application for a funding waiver or an extension of any amortization
period has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any material Unfunded Pension
Liability; (iii) neither Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA and liabilities immaterial in amount); (iv) neither Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any material
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; (v) neither Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA; and (vi) no Lien has arisen, xxxxxx or inchoate, in
respect of the Borrower or its property in connection with any Plan (save for
contributions not yet due).
5.13 SUBSIDIARIES. As of the Closing Date, Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13 and has no equity investments in any other corporation or entity other than
those specifically disclosed in Part(b) of Schedule 5.13.
5.14 DISCLOSURE. Borrower has disclosed to Agent and Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party in connection with any Loan Document to Agent or any Lender in connection
with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state (when
included with all other information so
26
furnished) any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
5.15 COMPLIANCE WITH LAWS. Borrower, each Subsidiary and each other
Loan Party is in compliance in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.16 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
Holding COMPANY ACT.
(a) Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock.
(b) None of Borrower, any Person Controlling Borrower, or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
5.17 RIGHTS IN COLLATERAL; PRIORITY OF LIENS. Upon the proper
filing of UCC and PPSA financing statements or other equivalent registration
forms, as the case may be, and the taking of the other actions required by the
Required Lenders (including registration of the U.K. Security Documents at the
U.K. companies registry), the Liens granted pursuant to the Collateral Documents
will constitute valid and enforceable first, prior and perfected Liens on the
Collateral in favor of Agent, or in the case of the U.K. Security Documents, the
U.K. Security Trustee, in each case, for the ratable benefit of Agent and
Lenders subject only to Liens permitted under Section 7.01.
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, Borrower shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary
to:
6.01 FINANCIAL STATEMENTS. Deliver to Agent a sufficient number of
copies for delivery by Agent to each Lender, of the following, in form and
detail satisfactory to Agent and the Required Lenders:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Borrower, a consolidated balance sheet of
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year (including, without limitation, reports relating to
Xxxxxxxx sales), setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and prepared in accordance
with GAAP, audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit;
(b) as soon as available, but in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
Borrower, a consolidated balance sheet of Borrower and its Subsidiaries as at
the end of such fiscal quarter, and the related consolidated statements of
income or operations, and cash flows for such fiscal quarter and for the portion
of Borrower's fiscal year then ended (including, without limitation, reports
relating to Xxxxxxxx sales) setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by a Responsible Officer of Borrower as fairly presenting the
financial condition, results of operations, and cash flows of Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to Agent a sufficient
number of copies for delivery to each Lender, of the following, in form and
detail satisfactory to Agent and the Required Lenders:
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(a) concurrently with the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its independent
certified public accountants stating that in making the examination necessary
for its certification of such financial statements no knowledge was obtained of
any Default arising under Section 6.12 or, if any such Default shall exist,
stating the nature and status of such event;
(b) concurrently with the delivery of the financial
statements referred to in Sections 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of Borrower;
(c) promptly after any request by Agent or any Lender,
copies of any audit reports, management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of
Borrower by independent accountants in connection with the accounts or books of
Borrower or any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, and in any
event within 15 days of filing; copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of Borrower,
and copies of all annual, regular, periodic and special reports and registration
statements which Borrower may file or be required to file with the Securities
and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act
of 1934, and not otherwise required to be delivered to Agent pursuant hereto;
(e) within 30 days of the Borrower's fiscal year end, the
Borrower's financial projections or budget by quarter for the following fiscal
year; and
(f) promptly, such additional information regarding the
business, financial or corporate affairs of Borrower or any Subsidiary, or
compliance with the terms of the Loan Documents, as Agent or any Lender may from
time to time reasonably request.
6.03 NOTICES. Promptly notify Agent and each Lender:
(a) of the occurrence of any Default;
(b) any lawsuit in which there is a reasonable
possibility of a settlement or adverse result of greater than Five Hundred
Thousand Dollars ($500,000) against the Borrower or any Subsidiary;
(c) any dispute, litigation, investigation, proceeding or
suspension between Borrower or any Subsidiary and any Governmental Authority;
(d) the commencement of, or any material development in,
any litigation or proceeding affecting Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(e) the occurrence of any ERISA Event or Termination
Event; and
(f) of any material change in accounting policies or
financial reporting practices by Borrower or any Subsidiary.
(g) any actual contingent liabilities of Borrower or any
Subsidiary and any such contingent liabilities which are reasonably foreseeable,
where such liabilities would not be included in the financial statements
referenced in Sections 6.01(a) and (b) and are in excess of One Million Dollars
($1,000,000) in the aggregate.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action Borrower has taken and
proposes to take with respect thereto. Each notice pursuant to Section 6.03(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by Borrower or such Subsidiary; (b) all other lawful claims which, if
unpaid, would by law become a Lien upon its property that is not permitted under
Section 7.01; and (c) all Indebtedness, as and when due and payable, which, if
unpaid, would constitute an Event of Default under Section 8.01(e) but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
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6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization, except in a transaction
permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of Borrower, insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts (after giving effect to any self-insurance compatible
with the following standards) as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days'
prior notice to Agent of termination, lapse or cancellation of such insurance.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws, and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS.
(a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over Borrower or such
Subsidiary, as the case may be. Borrower shall maintain at all times books and
records pertaining to the Collateral in such detail, form and scope as Agent or
any Lender shall reasonably require.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss on a confidential basis its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of Borrower and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
seven days advance written notice to Borrower; provided, however, that when a
Default exists Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of
Borrower at any time during normal business hours and without advance notice.
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions to
refinance existing indebtedness to Bank of America, to provide working capital,
for the issuance of Letters of Credit, for capital expenditures and for other
general corporate purposes not in contravention of any Law or of any Loan
Document.
6.12 FINANCIAL COVENANTS.
(a) Tangible Net Worth. Maintain on a consolidated basis
Tangible Net Worth equal to at least the sum of the following:
(i) Seventy Two Million Dollars ($72,000,000);
plus
(ii) the sum of 90% of net income after income
taxes (without subtracting losses) earned in
each quarterly accounting period commencing
after October 31, 2002; plus
(iii) the net proceeds from any equity securities
issued after the date of this Agreement.
29
(b) EBITDA. Maintain on a consolidated basis EBITDA
(determined on a rolling four quarter basis) equal to at least the amounts
indicated for each period specified below:
Period Amounts
------ -------
From the date of this Agreement
through April 29, 2003 $12,500,000
From April 30, 2003
through April 29, 2004 $14,000,000
From April 30, 2004
through October 30, 2004 $16,500,000
From October 31, 2004
and thereafter $19,500,000
(c) Quick Ratio. Maintain on a consolidated basis a ratio
of Quick Assets to current liabilities (including the Outstanding Amount of
Loans and L/C Obligations) of at least the ratios indicated for each period
specified below:
Period Ratios
------ ------
From January 31, 2003
through July 30, 2003 0.60:1.0
From July 31, 2003
through January 30, 2004 0.90:1.0
From January 31, 2004
through July 30, 2004 0.60:1.0
From July 31, 2004
through January 30, 2005 0.90:1.0
From January 31, 2005
and thereafter 0.60:1.0
(d) Lease and Rental Expense. Not to permit the aggregate
payments due in any fiscal year under all operating leases for personal property
(including payments on Synthetic Lease Obligations) in connection with the
Borrower's new distribution center located in Oceanside, California, to exceed
One Million Nine Hundred Thousand Dollars ($1,900,000). This amount in addition
to Indebtedness permitted under Section 7.03(f) of this Agreement.
(e) Capital Expenditures. Not to spend or incur
obligations (including the total amount of any capital leases) to acquire fixed
assets for more than Four Million Five Hundred Thousand Dollars ($4,500,000) in
any single fiscal year on a consolidated basis; provided, an additional Twenty
Million Dollars ($20,000,000) may be incurred for the acquisition of real
property and equipment in connection with the Borrower's new distribution center
located in Oceanside, California.
(f) Clean Down Period. Reduce the amount of Loans
outstanding under this Agreement to not more than (i) Fifteen Million Dollars
($15,000,000) for a period of at least thirty (30) consecutive days in Line-Year
2003 and (ii) Nineteen Million Dollars ($19,000,000) for a period of at least
thirty (30) consecutive day in each Line-Year thereafter. "Line-Year" means the
period between the date of this Agreement and October 31, 2003, and each
subsequent fiscal one-year period (if any).
6.13 ADDITIONAL GUARANTORS. Notify Agent at the time that any
Person becomes a Subsidiary, and promptly thereafter (and in any event within 30
days), cause such Person to (a) become a Guarantor by executing and delivering
Agent a counterpart of the Guaranty or such other document as Agent shall deem
appropriate for such purpose, and (b) deliver to Agent documents of the types
referred to in
30
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(a)), all in form, content and scope reasonably satisfactory to Agent.
6.14 COLLATERAL RECORDS. Borrower agrees to execute and deliver
promptly, and to cause each other Loan Party to execute and deliver promptly, to
Agent, from time to time, solely for Agent's convenience in maintaining a record
of the Collateral, such written statements and schedules as Agent may reasonably
require designating, identifying or describing the Collateral. The failure by
Borrower or any other Loan Party, however, to promptly give Agent such
statements or schedules shall not affect, diminish, modify or otherwise limit
the Liens on the Collateral granted pursuant to the Collateral Documents.
6.15 SECURITY INTERESTS. Borrower shall, and shall cause each other
Loan Party to, defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein. Borrower shall,
and shall cause each other Loan Party to, comply with the requirements of all
state, provincial and federal laws in order to grant to Agent or, as the case
may be, the U.K. Security Trustee and Lenders valid and perfected first priority
security interests in the Collateral, with perfection, in the case of any
investment property or deposit account, being effected by giving Agent or, as
the case may be, the U.K. Security Trustee control of such investment property
or deposit account, rather than by the filing of a UCC or PPSA financing
statement (or other equivalent registration form, as the case may be) with
respect to such investment property. Agent is hereby authorized by Borrower to
file any UCC or PPSA financing statements (or other equivalent registration
form, as the case may be) covering the Collateral whether or not Borrower's
signatures appear thereon. Borrower shall, and shall cause each other Loan
Party, to do whatever Agent or U.K. Security Trustee may reasonably request,
from time to time, to effect the purposes of this Agreement and the other Loan
Documents, including filing notices of liens, UCC or PPSA financing statements
(or other equivalent registration form, as the case may be), fixture filings and
amendments, renewals and continuations thereof; cooperating with Agent's,
representatives or U.S. Security Trustee's representatives; keeping stock
records; obtaining waivers from landlords and mortgagees and from warehousemen
and their landlords and mortgages; and, paying claims which might, if unpaid,
become a Lien on the Collateral not permitted under this Agreement.
ARTICLE VII. NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist, any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on
Schedule 7.01 hereto and any renewals or extensions thereof, provided that the
property covered thereby is not increased and any renewal or extension of the
obligations secured or benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(e) pledges or deposits in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade
contracts and leases (other than Indebtedness), statutory obligations, surety
bonds (other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
31
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing appeal or
other surety bonds relating to such judgments; and
(i) liens securing Indebtedness permitted under Section
7.03(e); provided that (i) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness and (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition.
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments held by Borrower or such Subsidiary in
the form of cash equivalents or short-term marketable debt securities;
(b) advances to officers, directors and employees of
Borrower and Subsidiaries in an aggregate amount not to exceed $850,000 at any
time outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of Borrower in any wholly-owned
Subsidiary and Investments of any wholly-owned Subsidiary in Borrower or in
another wholly-owned Subsidiary;
(d) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the grant of
trade credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;
and
(e) Guarantees permitted by Section 7.03; and.
(f) Additional Investments which do not exceed $1,000,000
in the aggregate at any time; provided that at the time of each Investment no
Event of Default exists or would exist after giving effect to such Investment.
7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and
listed on Schedule 7.03 hereto and any refinancings, refundings, renewals or
extensions thereof; provided that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized
thereunder;
(c) Guarantees of Borrower or any Subsidiary in respect
of Indebtedness otherwise permitted hereunder of Borrower or any Subsidiary;
(d) obligations (contingent or otherwise) of Borrower or
any Subsidiary existing or arising under any Swap Contract with any Lender, or
any Affiliate of any Lender, provided that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose
of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person and not for purposes
of speculation or taking a "market view;" and (ii) such Swap Contract does not
contain any provision exonerating the non-defaulting party from its obligation
to make payments on outstanding transactions to the defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic
Lease Obligations and purchase money obligations for fixed assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
amount of all such Indebtedness outstanding (excluding those covered in Section
6.12(d) of this Agreement) shall not exceed $3,000,000 in any fiscal year; and
(f) The principal sum of up to $17,000,000 may be
incurred for Indebtedness for the real property and capital leases in connection
with the new distribution center in Oceanside, California, provided that the
annual principal payments due thereon do not exceed $1,200,000 during the term
of this Agreement, and provided further that no Synthetic Lease Obligations may
be incurred in connection with said Oceanside distribution center except as
provided in Section 6.12(d).
32
7.04 FUNDAMENTAL CHANGES. Merge, amalgamate, dissolve, liquidate,
consolidate with or into, another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:
(a) any Subsidiary may merge or amalgamate with (i)
Borrower, provided that Borrower shall be the continuing or surviving Person, or
(ii) any one or more other Subsidiaries, provided that when any wholly-owned
Subsidiary is merging or amalgamating with another Subsidiary, the wholly-owned
Subsidiary shall be the continuing or surviving Person, and , provided further
that if a Guarantor is merging or amalgamating with another Subsidiary, the
Guarantor shall be the continuing or surviving Person; and
(b) any Subsidiary may dispose of all or substantially
all of its assets (upon voluntary liquidation or otherwise), to Borrower or to
another Subsidiary; provided that if the transferor in such a transaction is a
wholly-owned Subsidiary, then the transferee must also be a wholly-owned
Subsidiary, and , provided further that if the transferor of such assets is a
Guarantor, the transferee thereof must either be Borrower or a Guarantor.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement
to make any Disposition, except:
(a) Dispositions of obsolete or worn out property,
whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of
business;
(c) Dispositions of equipment or real property to the
extent that (i) such property is exchanged for credit against the purchase price
of similar replacement property, or (ii) the proceeds of such Disposition are
reasonably promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to
Borrower or to a wholly-owned Subsidiary, provided that if the transferor of
such property is a Guarantor, the transferee thereof must either be Borrower or
a Guarantor; and
(e) Dispositions permitted by Section 7.04.
(f) Additional Dispositions not to exceed $750,000 in the
aggregate at any time.
(g) Depositions of the properties listed on Schedule
7.05.
provided, however, that any Disposition pursuant to clauses (a) through (e)
shall be for fair market value, except for the transfer of inventory from the
Borrower to its retail stores within the United States.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except that:
(a) each Subsidiary may make Restricted Payments to
Borrower and to wholly-owned Subsidiaries (and, in the case of a Restricted
Payment by a non-wholly-owned Subsidiary, to Borrower and any Subsidiary and to
each other owner of capital stock or other equity interests of such Subsidiary
on a pro rata basis based on their relative ownership interests);
(b) Borrower and each Subsidiary may declare and make
dividend payments or other distributions payable solely in the common stock or
other common equity interests of such Person;
(c) Borrower and each Subsidiary may purchase, redeem or
otherwise acquire shares of its common stock or other common equity interests or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock or other
common equity interests; and
(d) Borrower may purchase, redeem or otherwise acquire
shares of its common stock in an aggregate amount not exceeding $1,000,000 per
year, provided that no Event of Default exists or would exist after giving
effect thereto.
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by
Borrower and its Subsidiaries on the date hereof.
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7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to Borrower or such Subsidiary as would be obtainable by Borrower or such
Subsidiary at the time in a comparable arm's length transaction with a Person
other than an Affiliate, provided that, to the extent permitted under applicable
law, the foregoing restriction shall not apply to transactions between or among
Borrower and any of its wholly-owned Subsidiaries or between and among any
wholly-owned Subsidiaries, advances permitted under Section 7.02(b) and
reasonable and customary employee compensation and benefits, directors fees and
indemnification of directors, officers and employees.
7.09 MARGIN REGULATIONS. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System of the United States)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
7.10 SUSPENSION OF BUSINESS. Voluntarily suspend its business for
more than seven (7) days in any 30-day period.
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. Borrower or any other Loan Party fails
to pay (i) when and as required to be paid herein, any amount of principal of
any Loan, or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any
commitment or other fee due hereunder, or (iii) within five days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b) Specific Covenants. Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05 (as to existence of Borrower), 6.10, 6.12 or Article VII ; or
(c) Other Defaults. Any Loan Party fails to perform or
observe any other covenant or agreement (not specified in subsection (a) or (b)
above) contained in any Loan Document on its part to be performed or observed
and such failure continues for 30 days or any default or event of default occurs
under any other Loan Document; or
(d) Representations and Warranties. Any representation,
warranty, certification or statement of fact made or deemed made by or on behalf
of Borrower or any other Loan Party herein, in any other Loan Document, or in
any document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed; or
(e) Cross-Default. (i) Borrower or any Subsidiary (A)
fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which Borrower or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (B) any Termination
Event (as so defined) under such Swap Contract as to which Borrower or any
Subsidiary is an Affected Party (as so defined); or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of
its Subsidiaries institutes or consents to the institution of any proceeding (by
petition, proposal, or otherwise) under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
monitor, administrator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, monitor, administrator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding (by petition, proposal, or otherwise) under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
34
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding or a warrant of attachment, execution, writ of seizure or seizure and
sale or similar process shall be issued against any substantial portion of its
property; or
(g) Inability to Pay Debts; Attachment. (i) Borrower or
any Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of Borrower under applicable law in an aggregate
amount in excess of the Threshold Amount, (ii) Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount, or (iii) any Lien arises (save for contribution amounts not
yet due) in connection with any Plan; or
(j) Invalidity of Loan Documents. Any Loan Document, at
any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or satisfaction in full of all the Obligations,
ceases to be in full force and effect; or any Loan Party or any other Person
contests in any manner the validity or enforceability of any Loan Document; or
any Loan Party denies that it has any or further liability or obligation under
any Loan Document, or purports to revoke, terminate or rescind any Loan
Document, or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or, subject to Section 7.01, is
not, valid, perfected and prior to all other Liens or is terminated, revoked or
declared void; or
(k) Change of Control. There occurs any Change of Control
with respect to Borrower; or
(l) Material Adverse Effect. There occurs any event or
circumstance that has a Material Adverse Effect.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs, Agent shall, at the request of, or may, with the consent of, the
Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans
and any obligation of Agent to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Borrower;
(c) require that Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof); and
(d) both in its capacity as Agent and U.K. Security
Trustee, exercise on behalf of itself and Lenders all rights and remedies
available to it and Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
Agent to make L/C Credit Extensions shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation of
Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of Agent or any
Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by Agent in the
following order:
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First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including
Attorney Costs and amounts payable under Article III) payable to Agent
in its capacity as such;
Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal
and interest) payable to Lenders (including Attorney Costs and amounts
payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and L/C
Borrowings, ratably among Lenders in proportion to the respective
amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C Borrowings, ratably
among Lenders in proportion to the respective amounts described in this
clause Fourth held by them;
Fifth, to Agent, to Cash Collateralize that portion of L/C
Obligations comprised of the aggregate undrawn amount of Letters of
Credit; and
Sixth, to the payment of that portion of the Obligations
constituting the Swap Termination Value with respect to any Swap
Contract.
Last, the balance, if any, after all of the Obligations have
been paid in full, to Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX. AGENT.
9.01 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
irrevocably appoints, designates and authorizes 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 herein or in any other Loan Document, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall 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 Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
herein and in the other Loan Documents with reference to 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. All
benefits and immunities provided to Agent in this Article IX shall apply to
Agent as issuer of Letters of Credit with respect to any acts taken or omissions
suffered by Agent 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, and as additionally provided herein with
respect to Agent as issuer of letters of Credit.
9.02 DELEGATION OF DUTIES. 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. 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.
9.03 LIABILITY OF 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 any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by 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 any Loan Party 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
36
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 any Loan Party or
any Affiliate thereof.
9.04 RELIANCE BY AGENT. (a) 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 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 any Loan
Party), independent accountants and other experts selected by Agent. 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 as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by all Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. 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 such greater
number of Lenders as may be expressly required by any instance), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Lender that has signed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.
9.05 NOTICE OF DEFAULT. 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 Agent for the
account of Lenders, unless Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Default and
stating that such notice is a "notice of default." Agent will notify Lenders of
its receipt of any such notice. Agent shall take such action with respect to
such Default as may be directed by the Required Lenders in accordance with
Article VIII; provided, however, that unless and until Agent has received any
such direction, 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 Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENT. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of any Loan Party
or any Affiliate thereof, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender as to any matter, including
whether Agent-Related Persons have disclosed material information in their
possession. Each Lender represents to 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 Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower and the other Loan Parties hereunder.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower and the other Loan Parties.
Except for notices, reports and other documents expressly required to be
furnished to Lenders by Agent herein, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.
9.07 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each
Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan
Party and without limiting the obligation of any Loan Party 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 to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have been caused primarily by
such Agent-Related Person's own gross negligence or willful misconduct; it being
agreed by all Lenders 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 Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs and costs and expenses in
connection with the use of IntraLinks, Inc. or other similar information
transmission systems in connection with this Agreement) incurred by 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
37
to herein, to the extent that Agent is not reimbursed for such expenses by or on
behalf of Borrower. The undertaking in this Section shall survive termination of
the Aggregate Commitments, the payment of all other Obligations and the
resignation of Agent.
9.08 AGENT IN ITS 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 each of
the Loan Parties and their respective Affiliates as though Bank of America were
not Agent hereunder and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Loan Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Loan Party or such Affiliate) and acknowledge that Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not
Agent, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
9.09 SUCCESSOR AGENT. Agent may resign as Agent upon 30 days'
written notice to Lenders and Borrower; provided that any such resignation by
Bank of America shall also constitute its resignation as Agent in its capacity
of issuer of Letters of Credit. If Agent resigns under this Agreement, the
Required Lenders shall appoint from among Lenders a successor Agent for Lenders,
which successor Agent shall be consented to by Borrower at all times other than
during the existence of a Default (which consent of Borrower shall not be
unreasonably withheld or delayed). If no successor Agent is appointed prior to
the effective date of the resignation of Agent, Agent may appoint, after
consulting with Lenders and Borrower, a successor Agent from among Lenders. Upon
the acceptance of its appointment as successor Agent hereunder, the Person
acting as such successor Agent shall succeed to all the rights, powers and
duties of the retiring Agent (including those in its capacity as issuer of
Letters of Credit) and the term "Agent" shall mean such successor Agent in all
such capacities and the retiring Agent's appointment, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part of
such retiring Agent or any other Lender, other than the obligation of the
successor Agent 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 Agent to effectively assume the
obligations of the retiring Agent with respect to such Letters of Credit. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor Agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
Lenders shall perform all of the duties of Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.
9.10 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 any Loan Party,
Agent (irrespective of whether the principal of any Loan or L/C Obligation shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Agent shall have made any demand on Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, 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
Lenders and Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of Lenders and Agent and their respective
agents and counsel and all other amounts due Lenders and Agent under Sections
2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
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 Agent and, in the event that
Agent shall consent to the making of such payments directly to Lenders, to pay
to Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of Agent and its agents and counsel, and any other amounts due
Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize 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 Agent to vote in respect of the
claim of any Lender in any such proceeding.
9.11 GUARANTY MATTERS. Each Lender hereby irrevocably authorizes
Agent, at its option and in its discretion, to release any Guarantor from its
obligations under the Guaranty if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.
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.. Upon request by Agent at any time, each Lender will confirm in writing Agent's
authority to release any Guarantor from its obligations under the Guaranty
pursuant to this Section 9.11
9.12 COLLATERAL MATTERS. (a) Each Lender hereby irrevocably
authorizes and directs Agent to enter into the Collateral Documents for the
benefit of such Lender. Each Lender hereby agrees, and each holder of any Note
by the acceptance thereof will be deemed to agree, that, except as otherwise set
forth in Section 10.01, any action taken by the Required Lenders, in accordance
with the provisions of this Agreement or the Collateral Documents, and the
exercise by the Required Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of Lenders. Agent is hereby authorized on behalf
of all of Lenders, without the necessity of any notice to or further consent
from any Lender from time to time prior to, an Event of Default, to take any
action with respect to any Collateral or Collateral Documents which may be
necessary to perfect and maintain perfected the Liens upon the Collateral
granted pursuant to the Collateral Documents.
Without limiting the generality of this paragraph, for the
purposes of creating a solidarite active in accordance with Article 1541 of the
Civil Code of Quebec, between each Lender, taken individually, on the one hand,
and the Agent, on the other hand, each Loan party, each such Lender and the
Agent acknowledge and agree that such Lender and the Agent are hereby conferred
the legal status of solidary creditors of each Loan Party in respect of all
Obligations, present and future, owed by each Loan Party to each such Lender and
the Agent (collectively, the "Solidary Claim"). Each Loan Party which is not a
signatory of this Agreement but is or may become a signatory to any other Loan
Documents shall be deemed to have accepted the provisions contained in this
paragraph by its execution of such other Loan Documents. Accordingly, but
subject (for the avoidance of doubt) to Article 1542 of the Civil Code of
Quebec, the Loan Parties are irrevocably bound towards the Agent and each Lender
in respect of the entire Solidary Claim of the Agent and each Lender. As a
result of the foregoing, the parties hereto acknowledge that the Agent and each
Lender shall at all times have a valid and effective right of action for the
entire Solidary Claim of the Agent and such Lender and the right to give full
acquittance for it. Accordingly, without limiting the generality of the
foregoing, the Agent, as solidary creditor with each Lender, shall at all times
have a valid and effective right of action in respect of all Obligations,
present and future, owed by each Loan Party to the Agent and Lenders or any of
them and the right to give a full acquittance for same. The parties further
agree and acknowledge that the Liens created by the Collateral Documents on the
Collateral shall be granted to the Agent, for its own benefit and for the
benefit of Lenders.
(b) Each Lender hereby irrevocably authorizes Agent, at
its option and in its discretion,
(i) to release any Lien on any property granted
to or held by Agent under any Loan Document (A) upon
termination of the Aggregate Commitments and payment in full
of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters
of Credit, (B) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any
other Loan Document, or (C) subject to Section 10.01, if
approved, authorized or ratified in writing by the Required
Lenders; and
(ii) to subordinate any Lien on any property
granted to or held by Agent under any Loan Document to the
holder of any Lien on such property that is permitted by this
Agreement or any other Loan Document.
Upon request by Agent at any time, each Lender will confirm in writing
Agent's authority to release or subordinate its interest in particular types or
items of Collateral pursuant to this Section 9.12.
(c) Subject to (b) above, Agent shall (and is hereby
irrevocably authorized by each Lender, to) execute such documents as may be
necessary to evidence the release or subordination of the Liens granted to Agent
for the benefit of Agent and Lenders herein or pursuant hereto upon the
applicable Collateral; provided that (i) Agent shall not be required to execute
any such document on terms which, in Agent's opinion, would expose Agent to or
create any liability or entail any consequence other than the release or
subordination of such Liens without recourse or warranty and (ii) such release
or subordination shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of Borrower or any other Loan
Party in respect of) all interests retained by Borrower or any other Loan Party,
including the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, Agent shall be authorized
to deduct all expenses reasonably incurred by Agent from the proceeds of any
such sale, transfer or foreclosure.
(d) Agent or, as the case may be, U.K. Security Trustee,
shall have no obligation whatsoever to any Lender or any other Person to assure
that the Collateral exists or is owned by Borrower or any other Loan Party or is
cared for, protected or insured or that the Liens granted to Agent or, as the
case may be, U.K. Security Trustee, herein or in any of the Collateral Documents
or pursuant hereto or thereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any manner or
under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to Agent or, as the case may be, U.K. Security
Trustee, in this Section 9.12 or in any of the Collateral
39
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, Agent or U.K. Security Trustee may
act in any manner it may deem appropriate, in its sole discretion, given Agent's
and U.K. Security Trustee's own interest in the Collateral as one of Lenders and
that Agent or U.K. Security Trustee shall have no duty or liability whatsoever
to Lenders.
(e) Each Lender hereby appoints each other Lender as
agent for the purpose of perfecting Lenders' security interest in assets which,
in accordance with Article 9 of the UCC or PPSA can be perfected only by
possession. Should any Lender (other than Agent) obtain possession of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's
request therefor shall deliver such Collateral to Agent or in accordance with
Agent's instructions.
9.13 APPOINTMENT OF U.K. SECURITY TRUSTEE. Each Lender and the
Agent hereby appoint the U.K. Security Trustee to act as its trustee under and
in relation to the U.K. Security Documents to which the U.K. Security Trustee is
a party pursuant to this Agreement and to hold the Trust Property as trustee for
the Agent and the Lenders on trust and in accordance with the other terms
contained in the U.K. Security Documents to which the U.K. Security Trustee is a
party and the Agent and each Lender hereby irrevocably authorize the U.K.
Security Trustee to exercise such rights, remedies, powers and discretions as
are specifically delegated to the U.K. Security Trustee by the terms of the U.K.
Security Documents to which the U.K. Security Trustee is party together with all
such rights, remedies, powers and discretions as are reasonably incidental
thereto.
9.14 AGENT AS U.K. SECURITY TRUSTEE. In this Agreement, any rights
exercisable by, any documents to be delivered to, or any other indemnities or
obligations in favor of the Agent shall be, as the case may be, exercisable by,
delivered to, or be indemnities or other obligations in favor of the Agent in
its capacity as U.K. Security Trustee to the extent that the right, document,
indemnity or other obligation relates to the U.K. Security Documents or the
security thereby created. Any obligations of the Agent in this Agreement shall
be obligations of the Agent in its capacity as U.K. Security Trustee to the
extent that the obligations relate to the U.K. Security Documents or the
security thereby created. Additionally, in its capacity as U.K. Security
Trustee, the Agent shall have (i) all the rights, powers, and benefits in favor
of the Agent contained in the provisions of this Article 9; (ii) all the rights
and powers of an absolute owner of the security constituted by the U.K. Security
Documents, and (iii) all the rights and powers granted to it and be subject to
all the obligations and duties owed by it under the U.K. Security Documents. The
Lenders agree that at any time that the U.K. Security Trustee shall be a Person
other than the Agent, such other Person shall have all the rights, benefits and
powers granted to the Agent in its capacity as U.K. Security Trustee in this
Agreement.
9.15 LIENS IN FAVOR OF U.K. SECURITY TRUSTEE. Any reference in this
Agreement to Liens stated to be in favor of the Agent shall be construed so as
to include a reference to Liens granted in favor of the U.K. Security Trustee.
ARTICLE X. MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and Borrower or the applicable Loan Party, as the
case may be, and acknowledged by Agent, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a)
without the written consent of each Lender; provided, however, in the sole
discretion of Agent, only a waiver by Agent shall be required with respect to
immaterial matters or items specified in Section 4.01(a) (iii) or (iv) with
respect to which Borrower has given assurances satisfactory to Agent that such
items shall be delivered promptly following the Closing Date;
(b) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.02) without the
written consent of such Lender;
(c) postpone any date fixed by this Agreement or any
other Loan Document for any payment (excluding mandatory prepayments) of
principal, interest, fees or other amounts due to 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 (ii) of
the second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive any obligation of Borrower to pay interest at the Default Rate
or (ii) to amend any financial covenant hereunder (or any defined term used
therein) even if the effect of such amendment would be to reduce the rate of
interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;
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(e) change Section 2.13 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the
written consent of each Lender; or
(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 any Guarantor from the Guaranty or release
the Liens on all or substantially all of the Collateral except in accordance
with the terms of any Loan Document without the written consent of each Lender.
and, provided further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by Agent in addition to Lenders required above,
affect the rights or duties of Agent under this Agreement or any other Loan
Document, (A) as Administrative Agent, or (B) as Letter of Credit issuer or
under any Letter of Credit Application relating to any Letter of Credit issued
or to be issued by it (including, without limitation, any reduction in any fee,
charge, expense, cost or other amount payable to Agent for its own account under
this Agreement in any such capacity); and (ii) the Agent Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the respective parties thereto. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.
10.02 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
subsection (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, specified for such Person on Schedule
10.02 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. 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, upon delivery; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; provided, however, that notices of Default, if delivered by mail, shall
be effective four Business Days after deposit in the mails, certified or
registered postage prepaid; (C) if delivered by facsimile, when sent and the
sender has received electronic confirmation of error free receipt; and (D) if
delivered by electronic mail (which form of delivery is subject to the
provisions of subsection (c) below), when delivered; provided, however, that
notices and other communications to Agent pursuant to Article II shall not be
effective until actually received by Agent. 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 all
Loan Parties, Agent, U.K. Security Trustee and Lenders. Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, 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 to distribute Loan Documents
for execution by the parties thereto, and may not be used for any other purpose.
(d) Reliance by Agent, U.K. Security Trustee and Lenders.
Agent, U.K. Security Trustee and Lenders shall be entitled to rely and act upon
any notices (including telephonic Committed Loan Notices) purportedly given by
or on behalf of 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. Borrower shall indemnify each
Agent-Related Person, U.K. Security Trustee 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 Borrower. All telephonic
notices to and other communications with Agent may be recorded by Agent, and
each of the parties hereto hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or
Agent to exercise, and no delay by any such Person in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power
41
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. Borrower agrees (a) to pay
or reimburse Agent for 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 reasonable Attorney Costs and costs and expenses in
connection with the use of IntraLinks, Inc. or other similar information
transmission systems in connection with this Agreement, and (b) to pay or
reimburse 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 Debtor Relief 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 Agent and the cost of independent public
accountants and other outside experts retained by Agent or any Lender. The
agreements in this Section shall survive the termination of the Aggregate
Commitments and repayment of all other Obligations. Promptly upon Borrower's
request, Agent shall provide to Borrower such documentation as is customary in
support of such costs and expenses.
10.05 INDEMNIFICATION BY BORROWER. Whether or not the transactions
contemplated hereby are consummated, 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 Agent 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 Borrower, any Subsidiary or any other Loan Party,
or any Environmental Liability related in any way to Borrower, any Subsidiary or
any other Loan Party, 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 Indemnitee is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demand, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to 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, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). The agreements in this Section shall survive the resignation of
Agent, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations. All amounts due under this Section 10.05 shall be payable within
ten Business Days after demand therefor.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of Borrower is made to Agent or any Lender, or Agent or any Lender
exercises its right of set-off, and such payment or the proceeds of such set-off
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
Agent upon demand its applicable share of any amount so recovered from or repaid
by Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
10.07 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 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
42
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (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
and, to the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) So long as no Event of Default has occurred and is
continuing, with prior written consent of the Borrower (which shall not be
unreasonably withheld or delayed), any Lender may 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 Loans (including for
purposes of this subsection (b), and 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 Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender, the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Assumption Agreement with respect
to such assignment is delivered to Agent, shall not be less than $5,000,000
unless each of Agent and, so long as no Event of Default has occurred and is
continuing, Borrower otherwise consents (each such consent not to 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 Loans or the Commitment
assigned, (iii) any assignment of a Commitment must be approved by Agent, 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 Agent an Assignment and
Assumption Agreement, together with a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each Assignment
and Assumption Agreement, the Eligible Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption Agreement, 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 Agreement, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption Agreement 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 3.01, 3.04, 3.05,
10.04 and 10.05 with respect to facts and circumstances occurring prior to the
date of such assignment). Upon request, Borrower (at its expense) shall execute
and deliver a Note to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection 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
subsection (d) of this Section.
(c) Agent, acting solely for this purpose as an agent of
Borrower, shall maintain at Agent's Office a copy of each Assignment and
Assumption Agreement delivered to it and a register for the recordation of the
names and addresses of Lenders, and the Commitments of, and principal amount of
the Loans 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 Borrower, Agent and 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. The
Register shall be available for inspection by Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to,
Borrower or Agent, sell participations to any Person (other than a natural
person or Borrower or any of 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
Loans (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) Borrower, 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 such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first provision to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 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 Borrower's prior written consent.
43
(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 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 a 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, "Eligible Assignee" means (a) a
Lender; (b) an Affiliate of a Lender; and (c) any other Person (other than a
natural Person) approved by (i) Agent and (ii) unless an Event of Default has
occurred and is continuing, Borrower (such approval referred to in (i) and (ii)
not to be unreasonably withheld or delayed) ); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include Borrower or any of Borrower's
Affiliates or Subsidiaries.
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment and Loans
pursuant to subsection (b) above, Bank of America may, upon 30 days' notice to
Borrower and Lenders, resign in its capacity as issuer of Letters of Credit
hereunder (the "L/C Issuer"). In the event of any such resignation as L/C Issuer
Borrower shall be entitled to appoint from among Lenders a successor L/C Issuer
hereunder; provided, however, that no failure by 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 Agent as 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 Lenders to
make Base Rate Committed Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)). Borrower, Lenders and Bank of America
agree that they shall amend this Agreement as necessary to reflect that Bank of
America remains Agent for purposes of administering this Agreement, but has
resigned in its capacity as L/C Issuer and another Lender(s) shall provides such
service, including the obligation of the successor to Bank of America as 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 Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.
10.08 CONFIDENTIALITY. Each of Agent and Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or under any other
Loan Document; (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of a Loan Party; (g) with the
consent of Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to Agent or any Lender on a nonconfidential basis from a source other
than Borrower; or (i) to the National Association of Insurance Commissioners or
any other similar organization. In addition, Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to Agent and Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitments, and the
Credit Extensions. For the purposes of this Section, "Information" means all
information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is available to Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
10.09 SET-OFF. In addition to any rights and remedies of Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to Borrower or any other Loan Party, any such notice being waived
by Borrower (on its own behalf and on behalf of each Loan Party) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not Agent or such Lender shall have made
demand under this Agreement or any other Loan Document and although such
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 Borrower and Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
44
10.10 INTEREST RATE LIMITATION. 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 Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to Borrower. In determining whether the interest
contracted for, charged, or received by 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
hereunder.
10.11 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 instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. 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; provided that the inclusion of
supplemental rights or remedies in favor of Agent or Lenders or U.K. Security
Trustee 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.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. 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 Agent and
U.K. Security Trustee and each Lender, regardless of any investigation made by
Agent or U.K. Security Trustee or any Lender or on their behalf and
notwithstanding that Agent or U.K. Security Trustee or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 GOVERNING LAW; SUBMISSION TO JURISDICTION.(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 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 SITTING IN LOS ANGELES COUNTY OR OF THE UNITED STATES FOR THE
CENTRAL DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
BORROWER, Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. BORROWER, 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.
BORROWER, 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 LAW OF SUCH STATE.
10.16 WAIVER TO RIGHT TO TRIAL BY JURY. 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 HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
45
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 SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.17 JUDGMENT CURRENCY. If for the purpose of obtaining judgment in
any court it is necessary to convert an amount due hereunder in the currency in
which it is due (the "Original Currency") into another currency (the "Second
Currency"), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Lender(s) could purchase in the California
foreign exchange market, the Original Currency with the Second Currency on the
date two (2) Business Days preceding that on which judgment is given. Each Loan
Party agrees that its obligation in respect of any Original Currency due from it
hereunder shall, notwithstanding any judgment or payment in such other currency,
be discharged only to the extent that , on the Business Day following the date
the Lender(s) receives payment of any sum so adjudged to be due hereunder in the
Second Currency, the Lender(s) may, in accordance with normal banking
procedures, purchase, in the California foreign exchange market, the Original
Currency with the amount of the Second Currency so paid; and if the amount of
the Original Currency so purchased or could have been so purchased is less than
the amount originally due in the Original Currency, each Loan Party agrees as a
separate obligation and notwithstanding any such payment or judgment to
indemnify the Lender(s) against such loss. The term "rate of exchange" in this
Section 10.17 means the spot rate at which the Lender, in accordance with normal
practices, is able on the relevant date to purchase the Original Currency with
the Second Currency, and includes any premium and costs of exchange payable in
connection with such purchase.
[Remainder of page intentionally left blank]
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President, Chief Operating
Officer and Chief Financial Officer
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxx Xxxx
Name: Xxx Xxxx
Title: Vice President
BANK OF AMERICA, N.A., AS U.K. SECURITY TRUSTEE
By: /s/ Xxx Xxxx
Name: Xxx Xxxx
Title: Vice President
BANK OF AMERICA, N.A., AS A LENDER
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ X. X. Xxxx
Name: X. X. Xxxx
Title: Vice President
BANK OF THE WEST
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
COMMITMENT COMMITMENT
LENDER (CALENDAR PERIOD 12/1 THROUGH 6/15) (CALENDAR PERIOD 6/16 THROUGH 11/30) PRO RATA SHARE
-------------------------------------------------------------------------------------------------------------------------
Bank of America, N.A. $ 25,000,000.00 $ 20,454,545.45 45.454545454%
Union Bank of 18,000,000.00 14,727,272.73 32.727272727%
California, N.A.
Bank of the West 12,000,000.00 9,818,181.82 21.818181818%
Total $ 55,000,000.00 $ 45,000,000.00 100.000000000%
SCHEDULE 2.03
EXISTING LETTERS OF CREDIT
LETTER OF CREDIT ORIGINAL AMOUNT LIABILITY AMOUNT EXPIRY DATE
---------------- --------------- ---------------- -----------
787282 $ 19,851.00 $ 19,851.00 5/2/2003
787364 $ 10,772.25 $ 10,772.25 5/12/2003
787377 $ 87,552.05 $ 87,552.05 4/28/2003
787407 $ 98,904.00 $ 98,904.00 6/2/2003
787454 $ 106,832.88 $ 106,832.88 5/2/2003
787498 $ 12,485.90 $ 12,485.90 4/24/2003
787751 $ 66,867.72 $ 66,867.72 4/25/2003
787762 $ 75,134.95 $ 75,134.95 4/24/2003
787777 $ 5,172.15 $ 5,172.15 5/5/2003
787856 $ 23,543.52 $ 23,543.52 4/28/2003
787857 $ 26,810.62 $ 26,810.62 4/28/2003
787922 $ 51,149.88 $ 51,149.88 5/2/2003
787983 $ 27,800.75 $ 27,800.75 4/30/2003
787986 $ 25,129.20 $ 25,129.20 5/2/2003
787989 $ 56,588.05 $ 56,588.05 4/30/2003
788029 $ 17,608.50 $ 17,608.50 5/1/2003
788154 $ 12,568.00 $ 12,568.00 5/9/2003
788242 $ 15,859.40 $ 15,859.40 5/8/2003
788322 $ 47,807.85 $ 47,807.85 5/7/2003
788375 $ 71,529.68 $ 71,529.68 5/8/2003
788376 $ 53,456.36 $ 53,456.36 5/12/2003
788440 $ 14,198.70 $ 14,198.70 5/12/2003
788491 $ 20,916.60 $ 20,916.60 5/12/2003
788498 $ 64,354.30 $ 64,354.30 5/14/2003
788525 $ 103,665.96 $ 103,665.96 5/14/2003
788576 $ 10,800.00 $ 10,800.00 5/12/2003
788601 $ 16,034.10 $ 16,034.10 5/15/2003
788727 $ 15,660.00 $ 15,660.00 5/15/2003
788748 $ 13,559.45 $ 13,559.45 5/15/2003
788752 $ 56,301.88 $ 56,301.88 5/15/2003
788756 $ 18,345.60 $ 18,345.60 5/19/2003
788886 $ 103,620.00 $ 103,620.00 5/22/2003
788971 $ 41,805.25 $ 41,805.25 5/21/2003
1129175 $ 76,400.00 $ 3,830.60 5/12/2003
1129283 $ 83,600.00 $ 185,878.50 3/24/2003
1129355 $ 140,900.00 $ 11,563.45 4/24/2003
1129412 $ 391,700.00 $ 112,095.33 6/26/2003
1130470 $ 12,800.00 $ 128,157.08 6/1/2003
1130527 $ 55,200.00 $ 25,378.80 4/18/2003
1130572 $ 511,000.00 $ 233,388.30 5/11/2003
1130717 $ 419,000.00 $ 198,616.29 5/21/2003
1130718 $ 442,500.00 $ 293,440.47 7/16/2003
1131906 $ 158,800.00 $ 40,570.48 4/14/2003
1131907 $ 86,900.00 $ 64,031.55 6/26/2003
1131913 $ 639,500.00 $ 572,571.00 5/21/2003
1131993 $ 94,100.00 $ 194,787.00 6/23/2003
1132205 $ 41,200.00 $ 28,551.60 5/11/2003
1132212 $ 271,200.00 $ 221,348.61 7/6/2003
1132275 $1,490,100.00 $ 458,956.33 5/18/2003
1132276 $ 280,700.00 $ 184,471.60 5/31/2003
1132457 $ 23,500.00 $ 735.95 4/15/2003
1132496 $ 57,600.00 $ 57,600.00 4/18/2003
1132534 $ 152,500.00 $ 59,092.50 6/23/2003
1132627 $ 32,200.00 $ 33,460.80 6/5/2003
1132636 $ 261,100.00 $ 13,715.55 5/26/2003
1132851 $ 103,700.00 $ 5,265.00 5/26/2003
1133270 $ 689,600.00 $ 724,080.00 7/6/2003
1133336 $ 98,400.00 $ 103,320.00 7/1/2003
1133337 $ 219,400.00 $ 230,370.00 8/20/2003
1133338 $ 25,500.00 $ 26,775.00 6/23/2003
1133339 $ 37,500.00 $ 39,375.00 6/23/2003
1133341 $ 627,900.00 $ 659,295.00 7/21/2003
1133352 $ 63,300.00 $ 66,465.00 6/23/2003
1133353 $ 196,900.00 $ 206,745.00 7/6/2003
1133354 $ 737,700.00 $ 774,585.00 7/12/2003
1133355 $ 56,600.00 $ 59,430.00 7/6/2003
1133432 $ 57,000.00 $ 59,850.00 7/6/2003
SCHEDULE 5.06
LITIGATION
On January 22, 1999, Xxxxxxx Xxxxx Xxxxxxx Xxxxx & Xxxxxx LLP filed a class
action in the United States District Court for the Southern District of
California ("U.S. District Court") on behalf of purchasers of the Company's
common stock during the period between September 4, 1997 and July 15, 1998. The
action was subsequently consolidated with two similar suits and plaintiffs filed
their Amended and Consolidated Complaint on December 17, 1999. Upon the
Company's motion, the U.S. District Court dismissed the Complaint with leave to
amend on July 18, 2000. On September 18, 2000, plaintiffs served their Second
Consolidated Amended Complaint ("Second Amended Complaint"). On November 6,
2000, the Company filed its motion to dismiss the Second Amended Complaint,
which the U.S. District Court granted, in part, and denied, in part. The
remaining portions of the Second Amended Complaint allege that, among other
things, during the class period and in violation of the Securities Exchange Act
of 1934, the Company's financial statements, as reported, did not conform to
generally accepted accounting principles with respect to revenues and inventory
levels. It further alleges that certain Company executives made false or
misleading statements or omissions concerning product demand and that two former
executives engaged in xxxxxxx xxxxxxx. The plaintiffs seek unspecified damages.
The parties are currently in the discovery process.
The Company is party to other claims and litigation proceedings arising in the
normal course of business. Although the legal responsibility and financial
impact with respect to such other claims and litigation cannot currently be
ascertained, the Company does not believe that these other matters will result
in payment by the Company of monetary damages, net of any applicable insurance
proceeds, that, in the aggregate, would be material in relation to the
consolidated financial position or results of operations of the Company.
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
None.
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries
Name of subsidiary State or other jurisdiction of incorporation
------------------ --------------------------------------------
Xxxxxxxx Store I, Inc. Delaware
Xxxxxxxx Store II, Inc. Delaware
Xxxxxxxx Store III, Inc. Delaware
Xxxxxxxx U.K., Ltd. England
Part (b) Other Equity Investments
None
SCHEDULE 7.01
EXISTING LIENS
1. MORTGAGE ON THE REAL ESTATE PROPERTY AT 2791 AND 0000 XXXXX XXXXXX XXXX,
XXXXXXXX, XX 00000
Lien holder: Bank of the West
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Final payment due: December 2005
2. EQUIPMENT FINANCING AGREEMENT - VARIOUS COMPUTER, EMBROIDERY AND
MANUFACTURING EQUIPMENT
Lien holder: Banc One Leasing Corporation
000 X. Xxxxxxx Xxx., 0xx Xxxxx
Xxxxxxx, XX 00000
Final payment due: April 2003
3. CAPITAL LEASE - CISCO EQUIPMENT AND SERVICES
Lien holder: SBC Capital Services
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Final payment due: May 2006
4. CAPITAL LEASE - AS400 SYSTEM UPGRADE
Lien holder: IBM Credit Corporation
000 Xxxxx Xxxxxxxxx
Xxxxx Xxxx, XX 00000
Final payment due: January 2005
5. CAPITAL LEASE - EMBROIDERY MACHINE - XXXXXXXX UK
Lien holder: Lombard North Central
0 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxx XX0 0XX
Xxxxxxx
Final payment due: June 2003
SCHEDULE 7.03
EXISTING INDEBTEDNESS
1. MORTGAGE ON THE REAL ESTATE PROPERTY AT 2791 AND 0000 XXXXX XXXXXX XXXX,
XXXXXXXX, XX 00000
Balance Due as of 3/31/03: $2,720,000
Monthly Payment (including interest): $ 10,000 plus interest at 8.41%
2. EQUIPMENT FINANCING AGREEMENT - VARIOUS COMPUTER, EMBROIDERY AND
MANUFACTURING EQUIPMENT
Balance Due as of 3/31/03: $44,900.54
Monthly Payment (including interest): $45,202.13
3. CAPITAL LEASE - CISCO EQUIPMENT AND SERVICES
Balance Due as of 3/31/03: $109,971.73
Monthly Payment (including interest): $ 3,313.60
4. CAPITAL LEASE - AS400 SYSTEM UPGRADE
Balance Due as of 3/31/03: $243,514.96
Monthly Payment (including interest): $ 11,905.00
5. CAPITAL LEASE - EMBROIDERY MACHINE - XXXXXXXX UK
Balance Due as of 3/31/03: $3,552.00
Monthly Payment (including interest): $1,206.00
SCHEDULE 7.05
DISPOSITIONS
WAREHOUSE FACILITIES LOCATED AT:
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
And
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
SCHEDULE 10.02
ADDRESSES FOR NOTICES
Xxxxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Chief Financial Officer
Telephone: 000.000.0000
Facsimile: 760.476.8438
Electronic Mail: xxxxxxx.xxxxx@xxxxxxxxxxx.xxx
BANK OF AMERICA
ADMINISTRATIVE AGENT'S OFFICE
Notices (other than Requests for Extensions of Credit):
BANK OF AMERICA, N.A.
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, XX 00000
Mail Code: WA1-501-37-20
Attention: Xxx Xxxx
Telephone: 000.000.0000
Facsimile: 206.358.0971
Electronic Mail: Xxx.xxxx@xxxxxxxxxxxxx.xxx
Requests for Extensions of Credit:
BANK OF AMERICA, N.A.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Mail Code: CA4-706-05-09
Attention: Xxxxx Granby
Telephone: 000.000.0000
Facsimile: 888.969.2419
Electronic Mail: Xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
Payments:
BANK OF AMERICA
Dallas, TX
ABA No. 000000000
Account No.: 3750836479
Account Name: Credit Services
Reference: Xxxxxxxx, Inc.
Address for Receiving Letter of Credit Applications and related correspondence
Standby Letters of Credit:
BANK OF AMERICA, N.A.
TRADE OPERATIONS-LOS ANGELES #22621
000 X. XXXXXXX XXXXXX, 00XX XXXXX
MAIL CODE: CA9-703-19-23
XXX XXXXXXX, XX 00000-0000
ATTENTION: XXXXXX XXXX
VICE PRESIDENT
TELEPHONE: 000.000.0000
FACSIMILE: 213.345.6694
ELECTRONIC MAIL: xxxxxx.xxxx@xxxxxxxxxxxxx.xxx
Commercial Letters of Credit
BANK OF AMERICA, N.A.
TRADE OPERATIONS-LOS ANGELES
000 X. XXXXXXX XXXXXX, 00XX XXXXX
MAIL CODE: CA9-703-19-15
XXX XXXXXXX, XX 00000-0000
ATTENTION: XXXXXX BELLEVUE
VICE PRESIDENT
TELEPHONE: 000.000.0000
FACSIMILE: 213.345.9665
ELECTRONIC MAIL: xxxxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Other Notices as a Lender:
Bank of America, X.X.
XXX-103-15-25
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: 000.000.0000
Facsimile: 619.515.7524
Electronic Mail: Xxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
BANK OF THE WEST
Notices for Subsequent Borrowings, Payments, Rollovers, Letters of Credit:
Bank of the West
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxx
Telephone: 000.000.0000
Facsimile: 323.727.3099
Electronic Mail: xxxx@xxxxxxxxxxxxx.xxx
Payments:
Bank of the West
ABA#: 000000000
Account Name: Commercial Loan Servicing
Account Number: 239855-332
Attn: Agented Credit Unit
Ref: Xxxxxxxx, Inc.
Other Notices:
Bank of the West
Agency Services Center
000 X. Xxxxx Xxxxxx
Mail Code: CP5-7
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telephone: 000.000.0000
Facsimile: 213.972.0618
Electronic Mail: xxxxxx@xxxxxxxxxxxxx.xxx
Bank of the West
San Diego Corporate Banking
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: 000.000.0000
Facsimile: 619.595.1918
Electronic Mail: xxxxxxx@xxxxxxxxxxxxx.xxx
UNION BANK OF CALIFORNIA, N.A.
Notices for Subsequent Borrowings, Paydowns, Rollovers, Letters of Credit
CLSO, Commercial Loan Operations
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telephone: 000.000.0000
Facsimile: 323.720.2252/51
Electronic Mail: Xxxxxxx.Xxxxx@xxxx.xxx
Other Notices:
UNION BANK OF CALIFORNIA, N.A.
000 X Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxx, Vice President
Telephone: 000.000.0000
Facsimile: 619.230.3766
Payments:
UNION BANK OF CALIFORNIA, N.A.
ABA No.: 000-000-000
Account No.: 77070196431
Account Name: Wire Transfer Clearing CLO
Reference: Xxxxxxxx, Inc.
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: __________, _____
To: Bank of America, N.A., as Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
___________, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Credit Agreement;" the terms defined
therein being used herein as therein defined), among Xxxxxxxx, Inc. (
"Borrower"), Lenders from time to time party thereto, and Bank of America, N.A.,
as Agent.
The undersigned hereby requests (select one):
[ ] A Borrowing of Committed Loans [ ] A conversion or continuation
of Committed Loans
1. On__________________________________________ (a Business Day).
2. In the amount of $___________________________.
3. Comprised of_________________________________.
[Type of Committed Loan requested]
4. For Eurodollar Rate Committed Loans: with an Interest Period
of_____ months.
The Committed Borrowing requested herein complies with the proviso to
the first sentence of Section 2.01 of the Credit Agreement.
XXXXXXXX, INC.
By:____________________________
Name:__________________________
Title:_________________________
A - 1
Form of Committed Loan Notice
EXHIBIT B
FORM OF NOTE
$_________________________
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to
pay to the order of _____________________________ or registered assigns
("Lender"), in accordance with the provisions of the Agreement (as hereinafter
defined) the principal amount of each Loan from time to time made by Lender to
Borrower under that certain Credit Agreement, dated as of _________________,
2003 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Borrower, Lenders from time to time party
thereto, and Bank of America, N.A., as Agent.
Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to Agent for the account of
Lender in Dollars in immediately available funds at Agent's Office. If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Note is also entitled to the
benefits of the Guaranty and is secured by the Collateral. Upon the occurrence
and continuation of one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable all as provided in the Agreement.
Loans made by Lender shall be evidenced by one or more loan accounts or records
maintained by Lender in the ordinary course of business. Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA.
XXXXXXXX, INC.
By:____________________________
Name:__________________________
Title:_________________________
B - 1
Form of Committed Loan Note
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF OUTSTANDING
PRINCIPAL OR PRINCIPAL
TYPE OF LOAN AMOUNT OF LOAN END OF INTEREST INTEREST PAID BALANCE THIS NOTATION MADE
DATE MADE MADE PERIOD THIS DATE DATE BY
-------------------------------------------------------------------------------------------------------------------------
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
____________ ____________ ______________ _______________ _____________ ____________ _____________
B - 2
Form of Committed Loan Note
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:_________,
To: Bank of America, N.A., as Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
___________, 2003 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Xxxxxxxx, Inc. (
"Borrower"), Lenders from time to time party thereto, and Bank of America, N.A.,
as Agent.
The undersigned Responsible Officer, solely in such capacity, hereby
certifies as of the date hereof that he/she is the ___________ of Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
Agent on behalf of Borrower, and that:
[Use following for fiscal YEAR-END financial statements]
1. Attached hereto as Schedule 1 are the year-end audited
financial statements required by Section 6.01(a) of the Agreement for the fiscal
year of Borrower ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.
[Use following for fiscal QUARTER-END financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of Borrower ended as of the above date. Such financial statements fairly present
the financial condition, results of operations and cash flows of Borrower and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of
the Agreement and has made, or has caused to be made under his/her supervision,
a detailed review of the transactions and condition (financial or otherwise) of
Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period Borrower performed and observed
all its Obligations under the Loan Documents, and
[SELECT ONE:]
[TO THE BEST KNOWLEDGE OF THE UNDERSIGNED DURING SUCH FISCAL PERIOD,
BORROWER PERFORMED AND OBSERVED EACH COVENANT AND CONDITION OF THE LOAN
DOCUMENTS APPLICABLE TO IT.]
--OR--
[THE FOLLOWING COVENANTS OR CONDITIONS HAVE NOT BEEN PERFORMED OR
OBSERVED AND THE FOLLOWING IS A LIST OF EACH SUCH DEFAULT OR EVENT OF DEFAULT
AND ITS NATURE AND STATUS:]
4. THE REPRESENTATIONS AND WARRANTIES OF THE BORROWER CONTAINED
IN ARTICLE V OF THE AGREEMENT, OR WHICH ARE CONTAINED IN ANY DOCUMENT FURNISHED
AT ANY TIME UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS, ARE TRUE AND CORRECT
ON AND AS OF THE DATE HEREOF, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND
WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE, IN WHICH CASE THEY ARE TRUE
AND CORRECT AS OF SUCH EARLIER DATE, AND EXCEPT THAT FOR PURPOSES OF THIS
COMPLIANCE CERTIFICATE, THE REPRESENTATIONS
C - 1
Form of Compliance Certificate
AND WARRANTIES CONTAINED IN SUBSECTIONS (A) AND (B) OF SECTION 5.05 OF THE
AGREEMENT SHALL BE DEEMED TO REFER TO THE MOST RECENT STATEMENTS FURNISHED
PURSUANT TO CLAUSES (A) AND (B), RESPECTIVELY, OF SECTION 6.01 OF THE AGREEMENT,
INCLUDING THE STATEMENTS IN CONNECTION WITH WHICH THIS COMPLIANCE CERTIFICATE IS
DELIVERED.
5. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
________________, _____________.
XXXXXXXX, INC.
By:____________________________
Name:__________________________
Title:_________________________
C - 2
Form of Compliance Certificate
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
to the Compliance Certificate
I. SECTION 6.12(a) - TANGIBLE NET WORTH.
A. Tangible Net Worth at Statement Date:
1. Total Assets: $_____________
2. Total Liabilities: $_____________
3. Total Net Intangibles $_____________
4. Tangible Net Worth (Line I.A.1 less Line I.A.2 less line 1.A.3): $_____________
B. 1. $72,000,000, plus $_____________
2. the sum of 90% of net income after income taxes
(without subtracting losses) earned in each quarterly
accounting period commencing after October 31, 2002, plus $_____________
3. the net proceeds from any equity securities issued after the date of
the Agreement, plus $_____________
4. Minimum Required Tangible Net Worth (I.B.1 plus I.B.2 plus I.B.3) $_____________
C. Excess (deficient) for covenant compliance (Line I.A.4 less I.B.4): $_____________
II. SECTION 6.12(b) - EBITDA.
A. net Income $_____________
B. less income or plus loss from discontinued
operations and extraordinary items, plus $_____________
C. income taxes, plus $_____________
D. interest expense, plus $_____________
E. depreciation, depletion and amortization $_____________
F. $4,250,000 add back of writedowns for
periods ending 1/31/03 and 4/30/03 $_____________
G. total EBITDA (Line II A + B + C + D + E + F) $_____________
H. EBITDA for the second most recent quarter $_____________
I. EBITDA for the third most recent quarter $_____________
C - 3
Form of Compliance Certificate
J. EBITDA for the fourth most recent quarter $_____________
K. Total EBITDA for last four quarters (sum of II.G+H+I+J) $_____________
Minimum required EBITDA: $12,500,000 through 4/29/03
$14,000,000 from 4/30/03 to 4/29/04
$16,500,000 from 4/30/04 to 10/30/04
$19,500,000 from 10/31/04 and thereafter
III. SECTION 6.12(c) - QUICK RATIO.
A. Quick Assets $_____________
1. cash, plus $_____________
2. short-term cash investments, plus $_____________
3. net trade receivables, plus $_____________
4. marketable securities not classified as long-term investment $_____________
5. Total Quick Assets $_____________
B. Current Liabilities $_____________
C. Outstanding Amount of L/C Obligations $_____________
D. Outstanding Amount of Loans (revolving line of credit) $_____________
E. Ratio (Line III.A.5 / sum of Line III.B + C + D): _________to 1.0
Minimum Required: 0.60:1.0 from 1/31/03 to 7/30/03
0.90.1.0 from 7/31/03 to 1/30/04
0.60:1.0 from 1/31/04 to 7/30/04
0.90:1.0 from 7/31/04 to 1/30/05
0.60:1.0 from 1/31/05 and thereafter
IV. APPLICABLE RATE - FUNDED DEBT TO EBITDA RATIO.
A.1 Funded Debt (quarterly)
a. Average daily outstandings under Notes to Lenders $_____________
b. Average daily of all L/C Obligations $_____________
c. all outstanding liabilities for borrowed money
plus other interest-bearing liabilities, including
current and long-term liabilities, (i.e. capitalized leases and $_____________
real estate debt)
2. Total Funded Debt (Lines IV.A.1 a + b + c) $_____________
B. EBITDA from Line 11K. above $_____________
C. Ratio (Line IV.A.2 / Line IV.B.): ________ to 1.0
C - 4
Form of Compliance Certificate
APPLICABLE RATE
Eurodollar
Rate +
----------
Pricing Funded Debt to Letters of
Level EBITDA Ratio Commitment Fee Credit Base Rate +
------------------------------------------------------------------------------------------
1 Less than or equal to 0.175% 1.375% 0.00%
1.50:1.00
2 Less than or equal to 0.175% 1.50% 0.00%
1.75:1.00 but greater
than 1.50:1.00
3 Less than or equal to 0.175% 1.625% 0.00%
2.00:1.00 but greater
than 1.75:1.00
4 Less than or equal to 0.25% 1.75% 0.00%
2.25:1.00 but greater
than 2.00:1.00
5 Greater than 2.25:1.00 0.25% 1.875% 0.25%
Any increase or decrease in the Applicable Rate resulting from a change
in the Financial Covenant shall become effective commencing on the 5th Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided, however, that if no Compliance
Certificate is delivered when due in accordance with such Section, then Pricing
Level 5 shall apply commencing on the 5th Business Day following the date such
Compliance Certificate was required to have been delivered until the 5th
Business Day following the date a Compliance Certificate is delivered. The
Applicable Rate in effect from the Closing Date through June 23, 2003 shall be
determined based upon Pricing Level 3.
V. SECTION 6.12(d)-LEASE AND RENTAL EXPENSE.
A Aggregate payments due under operating[and capital leases] (including
leases for real or personal property in connection with the Oceanside
Distribution Center) for fiscal year ending
____________________________________ $_____________
B. Maximum permitted lease and rental expenses for fiscal year $_____________
C. Excess (deficient) for covenant compliance (Line VI.A - VI.B): $_____________
VI. SECTION 6.12(e) -- CAPITAL EXPENDITURES.
A. Obligations incurred (including capital leases) for fixed assets
during fiscal year to date $_____________
B. Maximum permitted capital expenditures
($4,500,000 in any single year, plus
$20,000,000 for the Oceanside distribution center) $_____________
C. Excess (deficient) for covenant compliance (Line VI.A - VI.B): $_____________
VII. SECTION 6.12(f) - CLEAN DOWN DEBT.
A. Line Year 2003 - reduce debt to
C - 5
Form of Compliance Certificate
$15,000,000 or less for at least 30 consecutive days
B. Line Year 2004 and each fiscal Line Year
thereafter - reduce debt to $19,000,000 or less
for at least 30 consecutive days
C. Dates reduced to $15,000,000 or less ______ to ______
D. Dates reduced to $19,000,000 or less ______ to ______
VIII. SECTION 7.02(f) - ADDITIONAL INVESTMENTS
A. As of the date hereof amount of additional
Investments $_____________
B. Maximum permitted at any time $1,000,000
IX. SECTION 7.06(d) - STOCK REPURCHASES
A. As of the date hereof, amount of stock
repurchases in current fiscal year $_____________
B. Maximum permitted in any fiscal year $1,000,000
X. SECTION 7.03(e) - ADDITIONAL CAPITALIZED LEASE AND PURCHASE
MONEY OBLIGATIONS
A. As of the date hereof, amount of capitalized lease
and purchase money obligations $_____________
B. Maximum permitted in any fiscal year $3,000,000
plus $20,000,000 for the Oceanside distribution center provided
annual payments thereon does not exceed $750,000.
C - 6
Form of Compliance Certificate
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Assignment") is dated
as of the Effective Date set forth below and is entered into by and between
[INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME OF ASSIGNEE] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
Agent as contemplated below, (i) all of the Assignor's rights and obligations as
a Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including, to the
extent included in any such facilities, Letters of Credit) included in such
facilities and, (ii) to the extent permitted to be assigned under applicable
law, all claims, including, without limitation, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, (the "Assigned Interest").
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment, without representation or warranty by the
Assignor.
1. Assignor: ______________
2. Assignee: ______________ [and is an Affiliate of Assignor]
3. Borrower(s): ______________
4. Agent: Bank of America, N. A., as Agent under the Credit
Agreement
5. Credit Agreement: The Credit Agreement, dated as of ________,
among Xxxxxxxx, Inc., Lenders parties thereto, and Agent
6. Assigned Interest:
----------------------------------------------------------------------------------------------------
Aggregate
Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders Assigned Commitment/Loans
----------------------------------------------------------------------------------------------------
_____________ $________________ $________________ ______________%
----------------------------------------------------------------------------------------------------
_____________ $________________ $________________ ______________%
----------------------------------------------------------------------------------------------------
_____________ $________________ $________________ ______________%
----------------------------------------------------------------------------------------------------
Effective Date: __________________, 20__
D - 1
Form of Assignment and Assumption Agreement
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: _____________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: _____________________________
Title:
CONSENTED TO AND Accepted:
Bank of America, N.A., as
Agent
By: _______________________________
Title:
[CONSENTED TO:]
[NAME OF BORROWER(S)]
By: _______________________________
Title:
D - 2
Form of Assignment and Assumption Agreement
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents , or any collateral thereunder, (iii) the financial condition of
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by Borrower,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement, (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, and (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on Agent or any other Lender;
and (b) agrees that (i) it will, independently and without reliance on Agent,
the Assignor or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a Lender.
1.3 Assignee's Address for Notices, etc. Attached hereto
as Schedule 1 is all contact information, address, account and other
administrative information relating to the Assignee.
2. Payments. From and after the Effective Date, Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by Agent for
periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
3. General Provisions. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment by telecopy shall be effective as delivery
of a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the laws of the State of
California.
4. Agent. [The Assignee hereby appoints and authorizes the
Assignor to take such legal action as agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Agent by the Lenders
pursuant to the terms of the Credit Agreement.] [Insert bracketed text only if
Assignor is Agent.] Without limiting the generality of the foregoing, the
parties acknowledge and agree that the Assignee and the Agent are solidary
creditors of each of the Loan Parties in respect of all Obligations owed by each
of the Loan Parties, as the case may be, to each of them, as contemplated in
Section 9.12(a) of the Credit Agreement and in accordance with Article 1541 of
the Civil Code of Quebec. The Assignee shall assume no duties or obligations
held by the Assignor in its capacity as Agent under the Credit Agreement.
D - 3
Annex 1 to Form of Assignment and Assumption Agreement
SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT
ADMINISTRATIVE DETAILS
(ASSIGNEE TO LIST NAMES OF CREDIT CONTACTS, ADDRESSES, PHONE AND
FACSIMILE NUMBERS, ELECTRONIC MAIL ADDRESSES AND ACCOUNT AND PAYMENT
INFORMATION)
D - 4
Schedule 1 to Form of Assignment and Assumption Agreement
