Exhibit 10.15
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CREDIT AGREEMENT
dated as of
May 3, 2001
among
XXXXXX'X TRADING COMPANY, INC.,
as Borrower,
The Lenders Party Hereto,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
X.X. XXXXXX SECURITIES INC.,
as Lead Arranger and
Bookrunner,
and
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Syndication Agent
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TABLE OF CONTENTS
ARTICLE I
Definitions
Page
SECTION 1.01. Defined Terms.........................................................
SECTION 1.02. Classification of Loans and Borrowings ...............................
SECTION 1.03. Terms Generally ......................................................
SECTION 1.04. Accounting Terms; GAAP ...............................................
ARTICLE II
The Credits
SECTION 2.01. Commitments...........................................................
SECTION 2.02. Loans and Borrowings..................................................
SECTION 2.03. Requests for Revolving Borrowings.....................................
SECTION 2.04. Swingline Loans.......................................................
SECTION 2.05. Letters of Credit.....................................................
SECTION 2.06. Funding of Borrowings.................................................
SECTION 2.07. Interest Elections....................................................
SECTION 2.08. Termination and Reduction of Commitments..............................
SECTION 2.09. Repayment of Loans; Evidence of Debt ...............................
SECTION 2.10. Prepayment of Loans...................................................
SECTION 2.11. Fees..................................................................
SECTION 2.12. Interest..............................................................
SECTION 2.13. Alternate Rate of Interest............................................
SECTION 2.14. Increased Costs.......................................................
SECTION 2.15. Break Funding Payments................................................
SECTION 2.16. Taxes.................................................................
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-Offs..........................................................
SECTION 2.18. Mitigation Obligations; Replacement of Lenders........................
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ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers..................................................
SECTION 3.02. Authorization; Enforceability.........................................
SECTION 3.03. Governmental Approvals; No Conflicts ...............................
SECTION 3.04. Financial Condition; No Material Adverse Change.......................
SECTION 3.05. Properties............................................................
SECTION 3.06. Litigation and Environmental Matters ...............................
SECTION 3.07. Compliance with Laws and Agreements...................................
SECTION 3.08. Investment and Holding Company Status ..............................
SECTION 3.09. Taxes.................................................................
SECTION 3.10. ERISA.................................................................
SECTION 3.11. Disclosure............................................................
SECTION 3.12. Subsidiaries..........................................................
SECTION 3.13. Insurance.............................................................
SECTION 3.14. Labor Matters.........................................................
SECTION 3.15. Solvency..............................................................
SECTION 3.16. Security Documents....................................................
ARTICLE IV
Conditions
SECTION 4.01. Effective Date........................................................
SECTION 4.02. Each Credit Event.....................................................
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information............................
SECTION 5.02. Notices of Material Events............................................
SECTION 5.03. Information Regarding Collateral......................................
SECTION 5.04. Existence; Conduct of Business........................................
SECTION 5.05. Payment of Obligations................................................
SECTION 5.06. Maintenance of Properties.............................................
SECTION 5.07. Insurance.............................................................
SECTION 5.08. Casualty and Condemnation.............................................
SECTION 5.09. Books and Records, Inspection and Audit Rights........................
SECTION 5.10. Compliance with Laws..................................................
SECTION 5.11. Use of Proceeds and Letters of Credit ..............................
SECTION 5.12. Additional Subsidiaries...............................................
SECTION 5.13. Further Assurances....................................................
SECTION 5.14. Lien Waiver Agreements; Leaseholds....................................
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities...............................
SECTION 6.02. Liens.................................................................
SECTION 6.03. Fundamental Changes...................................................
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions......................................................
SECTION 6.05. Asset Sales...........................................................
SECTION 6.06. Hedging Agreements....................................................
SECTION 6.07. Restricted Payments; Certain Payments of Indebtedness.................
SECTION 6.08. Transactions with Affiliates..........................................
SECTION 6.09. Restrictive Agreements................................................
SECTION 6.10. Amendment of Material Documents.......................................
SECTION 6.11. Sale and Lease-Back Transactions......................................
SECTION 6.12. Capital Expenditures..................................................
SECTION 6.13. Leverage Ratio........................................................
SECTION 6.14. Coverage Ratio........................................................
ARTICLE VII
Events of Default................................................................................
ARTICLE VIII
The Administrative Agent.........................................................................
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices...............................................................
SECTION 9.02. Waivers; Amendments..................................................
SECTION 9.03. Expenses; Indemnity; Damage Waiver....................................
SECTION 9.04. Successors and Assigns................................................
SECTION 9.05. Survival..............................................................
SECTION 9.06. Counterparts; Integration; Effectiveness..............................
SECTION 9.07. Severability..........................................................
SECTION 9.08. Right of Setoff.......................................................
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process...........................................................
SECTION 9.10. WAIVER OF JURY TRIAL..................................................
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SECTION 9.11. Headings..............................................................
SECTION 9.12. Confidentiality.......................................................
SECTION 9.13. Interest Rate Limitation..............................................
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.05 -- Properties
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.08 -- Affiliate Transactions
Schedule 6.09 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1- -- Form of Opinion of O'Melveny & Xxxxx LLP
Exhibit B-2- -- Form of Opinion of Ice Xxxxxx
Exhibit B-3- -- Form of Opinion of Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxxx
Exhibit C -- Form of Borrowing Base Certificate
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Form of Subsidiary Guarantee Agreement
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
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CREDIT AGREEMENT dated as May 3, 2001, among
XXXXXX'X TRADING COMPANY, INC., the LENDERS party
hereto, and THE CHASE MANHATTAN BANK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified 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.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Ancillary Agreement" means the Modification Agreement dated
August 31, 1999, among the Borrower, the Fund and TLI.
"Applicable Margin" means, for any day with respect to any ABR
Loan or Eurodollar Loan, the applicable rate per annum set forth below under the
caption "ABR Margin" or "Eurodollar Margin", as the case may be, based upon the
Leverage Ratio as of the most recent determination date:
Leverage
Ratio Eurodollar Margin ABR Margin
Category 1 greater than or equal to 3.50x 2.75% 1.75%
Category 2 greater than 2.25x less than 3.50x 2.50% 1.50%
Category 3 less than or equal to 2.25x 2.25% 1.25%
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower's fiscal year
based upon the Borrower's consolidated financial statements delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category 1 (A)
at any time that an Event of Default has occurred and is continuing or (B) at
the option of the Administrative Agent or at the request of the Required Lenders
if the Borrower fails to deliver the consolidated financial statements required
to be delivered by it pursuant to Section 5.01(a) or (b) within five Business
Days after the date due, during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered, it
being understood that in the event such financial statements indicate an
increase in the Applicable Margin, such increase shall be retroactive to the
date that such increase would have occurred if such financial statements had
been delivered within the time periods set forth in Section 5.01(a) or (b), as
applicable.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Arranger" means X.X. Xxxxxx Securities, Inc.
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such
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annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Average Funded Debt" means, on any date, an amount equal to
the sum of (a) the aggregate principal amount of Indebtedness of the Borrower
and its Subsidiaries outstanding as of such date, in the amount that would be
reflected on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP (but excluding Indebtedness in respect of the Revolving
Exposures, the Mezzanine Securities and any Replacement Mezzanine Securities),
plus (b) the aggregate principal amount of Indebtedness of the Borrower and its
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis (but
excluding, for purposes of this clause (b), contingent obligations as an account
party in respect of any letter of credit or letter of guaranty unless such
letter of credit or letter of guaranty supports an obligation that constitutes
Indebtedness), plus (c) the daily average total Revolving Exposures for the
fiscal quarter ended on such date (or, if such date is not the last date of a
fiscal quarter, then for the fiscal quarter most recently ended); provided that
the daily average total Revolving Exposures for the fiscal quarter in which an
IPO is consummated shall be calculated from the date of consummation of the IPO
through the end of such fiscal quarter.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Xxxxxx'x Trading Company, Inc., an Indiana
corporation.
"Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Base" means, as of any date of determination, the
sum of (a) an amount calculated by reference to the most recently delivered
Borrowing Base Certificate equal to 70% (or, during the period from the
beginning of August through the
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end of November in each of the years 2001, 2002 and 2003, 77.5%) of the value
(determined as provided below) of Eligible Inventory, plus (b) the amount, if
any, of cash collateral then on deposit with the Administrative Agent that
constitutes part of the Borrowing Base as provided in Section 2.05(j). For
purposes of determining the Borrowing Base, Eligible Inventory shall be valued
at the lower of cost or market in accordance with GAAP consistently applied. The
Borrowing Base shall be computed as of the end of each fiscal month by the
Borrower and a Borrowing Base Certificate presenting the Borrower's computation
of the Borrowing Base will be delivered to the Administrative Agent promptly,
but in no event later than the 15th day of the following month; provided that
(i) the Borrower may, at its option, deliver a Borrowing Base Certificate at any
time (but not more frequently than once in any week) in order to establish a new
Borrowing Base and (ii) the Administrative Agent may require weekly computation
of the Borrowing Base if the Excess Availability is less than 5% of the
Borrowing Base, in which case the Borrowing Base shall be computed as of the end
of each week and the Borrowing Base Certificate will be delivered to the
Administrative Agent no later than the third Business Day of the following week.
The Borrowing Base at any time in effect shall be determined by reference to the
Borrowing Base Certificate most recently delivered hereunder, absent any error
in such Borrowing Base Certificate. The Administrative Agent or the
Supermajority Lenders may, in their sole discretion, from time to time (a)
decrease the advance rates for the Borrowing Base, (b) establish and revise
reserves reducing the amount of Eligible Inventory and (c) impose additional
eligibility criteria to be applicable to Eligible Inventory (any such action
referred to in clause (a), (b) or (c), a "Borrowing Base Adjustment"); provided
that (i) Borrowing Base Adjustments shall be made only in the event that the
Administrative Agent or the Supermajority Lenders determine (based upon an
evaluation or appraisal referred to in Section 5.09 or other objectively
determinable facts or circumstances) that (A) the number of days of the turnover
of Inventory for any period has adversely changed, (B) the gross margins being
realized upon the sale of Inventory for any period has adversely changed, (C)
the nature, quality or mix of the Inventory has adversely changed, (D) the
Inventory or its value, or the security interests therein granted under the
Security Agreement, are adversely affected by any events, conditions,
contingencies or risks that are not already adequately reflected in the
calculation of the Borrowing Base or (E) the Borrower's calculation of the
Borrowing Base is inaccurate, (ii) each Borrowing Base Adjustment shall bear a
reasonable relationship to the event, condition or circumstance that is the
basis therefor and (iii) each Borrowing Base Adjustment shall not be effective
until the first fiscal month-end computation that occurs at least 10 days after
delivery of notice of such Borrowing Base Adjustment to the Borrower.
"Borrowing Base Adjustment" has the meaning assigned to such
term in the definition of "Borrowing Base".
"Borrowing Base Certificate" means a certificate in the form
of Exhibit C (revised to reflect any Borrowing Base Adjustments) or any other
form approved by the Borrower and the Administrative Agent, together with all
attachments contemplated thereby.
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"Borrowing Request" means a request by the Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City or the State of Indiana are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Expenditures" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) without duplication, Capital Lease Obligations
incurred by the Borrower and its consolidated Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Concentration Account" means the "Cash Concentration
Account", as defined in the Security Agreement.
"Change in Control" means at any time, (a) prior to an IPO,
the failure by the Control Group to collectively own, directly or indirectly,
beneficially and of record, shares representing at least 50.10% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Borrower, (b) the failure by FS&C and its Affiliates to collectively own,
directly or indirectly, beneficially and of record, shares representing a
greater percentage of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Borrower than that owned by any
other member of the Control Group and such member's Affiliates; (c) after an
IPO, any Person or group (within the meaning of Rule 13d-5 under the United
States Securities and Exchange Act of 1934 as in effect on the date hereof),
other than the Control Group, shall beneficially own, directly or indirectly,
shares of capital stock of the Borrower representing a percentage of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower that exceeds the greater of (i) the percentage
thereof represented by shares owned by FS&C and its Affiliates and (ii) 20%; (d)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who are not Continuing Directors; or (e)
while any of the Mezzanine Securities or Replacement Mezzanine Securities are
outstanding, a "Change of Control" (as defined in the Mezzanine Securities
Documents), or any analogous event provided for in the Replacement Mezzanine
Securities Documents, shall have occurred;
5
provided that, after an IPO, any shares of capital stock held by TLI and its
Affiliates that are issued pursuant to the exercise of the existing warrants
held by TLI on the Effective Date shall be disregarded for purposes of clause
(b) above if and so long as the number of directors on the board of directors of
the Borrower who are Affiliates of FS&C or employees, officers or directors of
FS&C and their Affiliates exceeds the number of such directors who are
Affiliates of TLI or employees, officers or directors of TLI and their
Affiliates.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or such Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as defined in
any applicable Security Document.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and to acquire participations
in Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such Commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Lenders' Commitments is
$160,000,000.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period (adjusted to exclude any gains or losses realized during
such period that are attributable to sales or other dispositions of any material
assets outside the ordinary course of business), plus, without duplication and
to the extent deducted from revenues in determining Consolidated Net Income for
such period, the sum of (a) Consolidated Interest Expense for such period, (b)
the aggregate amount of letter of credit fees accrued during such period, (c)
the aggregate amount of income tax expense for such period, (d) all depreciation
and amortization expense for such period, (e) any non-cash charges
6
for such period, (f) all fees referred to in Section 2.11 payable to the
Administrative Agent and the Lenders during such period and (g) all
non-recurring fees and expenses payable by the Borrower during such period that
are attributable to the Transactions (including any such non-recurring fees and
expenses attributable to any resale of the Mezzanine Securities by the initial
purchasers thereof or any issuance of Replacement Mezzanine Securities), and
minus, without duplication and to the extent added to revenues in determining
Consolidated Net Income for such period, any non-cash gains for such period, all
as determined on a consolidated basis with respect to the Borrower and its
Subsidiaries in accordance with GAAP.
"Consolidated EBITDAR" means, for any period, Consolidated
EBITDA for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income for such period, the
Consolidated Rent Expense for such period, all as determined on a consolidated
basis with respect to the Borrower and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, excluding (a) fees
referred to in Section 2.11 (other than fees referred to in Section 2.11(b),
which shall be included) payable to the Administrative Agent and the Lenders
during such period and (b) all non- recurring fees and expenses payable by the
Borrower during such period that are attributable to the Transactions.
"Consolidated Net Income" means, for any period, the net
income or loss of the Borrower and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Person in which any other Person (other than the
Borrower or any of the Subsidiaries or any director holding qualifying shares in
compliance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
any of the Subsidiaries by such Person during such period, and (b) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or any of the Subsidiaries or the
date that such Person's assets are acquired by the Borrower or any of the
Subsidiaries; and provided, further, that there shall be excluded any operating
losses attributable to investments pursuant to clause (l) of Section 6.04 in
Persons that are not Subsidiaries.
"Consolidated Rent Expense" means, for any period, the rent
expense of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Continuing Directors" means the directors of the Borrower on
the Effective Date and each other director if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by a majority of the
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then Continuing Directors or such other director receives the vote of FS&C in
his or her election by the stockholders of the Borrower.
"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. "Controlling" and "Controlled" have meanings correlative thereto.
"Control Group" means FS&C, TLI, Benchmark Capital Partners
IV, L.P., the respective Affiliates of each of the foregoing and management of
the Borrower.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Eligible Inventory" means, as of any date of determination
(and subject to any Borrowing Base Adjustments), the value determined at the
lower of cost or market on a first-in, first-out basis of all Inventory owned by
the Borrower or any Subsidiary Loan Party and located in the United States of
America, less (without duplication, and only to the extent included in
Inventory): (a) Reserve for Slow-moving Items; (b) reserves for outstanding gift
certificate liabilities and store merchandise credit liabilities; (c) Shrink
Reserve; (d) Reserve for Leasehold Obligations and (e) reserves for any
works-in-process and raw materials. Each of the above referenced reserves or
ineligibles shall be taken from the books and records of the Borrower determined
(subject to any Borrowing Base Adjustments) in a manner consistent with the
Borrower's historical accounting and recordkeeping practices, subject to any
changes in such practices that are approved by the Borrower's independent
accountants (unless the Administrative Agent or the Supermajority Lenders notify
the Borrower of an objection to any such change, in which case such change shall
be disregarded for purposes of determining Eligible Inventory). Notwithstanding
the foregoing, no Inventory shall be "Eligible Inventory" if:
(i) such item of Inventory is held on consignment, is owned by
the Borrower or a Subsidiary Loan Party and has been consigned to other
Persons, or is located at, or in the possession of, a vendor of the
Borrower or a Subsidiary Loan Party, or is in transit to or from, or
held or stored by, third parties (other than the Borrower's or a
Subsidiary Loan Party's agents or warehouses); or
8
(ii) such item of Inventory includes any profits or transfer
price additions charged or accrued in connection with transfers of such
Inventory between the Borrower and its Subsidiaries or among the
Subsidiaries of the Borrower; provided that such Inventory shall only
be excluded as Eligible Inventory up to an amount equal to such profits
and transfer price additions; or
(iii) such item of Inventory is comprised of shipping supplies
and/or packaging (other than prepackaged items), selling or display
materials; or
(iv) the Borrower or a Subsidiary Loan Party shall not have
good and marketable title as sole owner of such item of Inventory or
any nonfrivolous claim disputing the title of the Borrower or a
Subsidiary Loan Party to, or right to possession of or dominion over,
such item of Inventory shall have been asserted; or
(v) such item of Inventory is not located in the United States
of America; or
(vi) such item of Inventory is not subject to a valid and
perfected, first priority (except for Permitted Encumbrances of the
type described in clause (b) of the definition of "Permitted
Encumbrances" that have priority as a matter of law) security interest
in favor of the Collateral Agent pursuant to the Security Agreement; or
(vii) such item of Inventory is subject to any Lien
whatsoever, other than Permitted Encumbrances and Liens created under
the Loan Documents; or
(viii) (A) Inventory classified on the stock ledger as for
return to vendors; (B) Inventory held for layaway customers; (C) food
items; (D) store supplies; or (E) merchandise allocated for
liquidation; or
(ix) such item of Inventory (A) is damaged or not in good
condition, (B) is an item removed from inventory for the purpose of
marketing photo-shoots or customer demonstrations which removal shall
cause such item to be sold at lower than full retail, (C) does not meet
all material standards imposed by any Governmental Authority having
regulatory authority over such item of Inventory, its use or sale or
(D) shall be believed by the Administrative Agent or the Required
Lenders (using their commercially reasonable judgment) to be a discon
tinued item or otherwise be not readily usable or salable under the
customary terms upon which it usually is sold or at prices
approximating at least the cost thereof (after giving effect to any
write-downs applicable thereto).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way
9
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
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.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
10
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Availability" means, at any time, the Borrowing Base
then in effect minus the total Revolving Exposures at such time.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income, net profits or gross
receipts by the United States of America (or any State or other political
subdivision thereof or therein), or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction described in clause (a) above and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.18(b)), any withholding tax that (i) is in effect
and would apply to amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office), except to the extent that such Foreign Lender (or its assignor, if any)
was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.16(a), or (ii) is attributable to
such Foreign Lender's failure to comply with Section 2.16(e).
"Existing Letter of Credit" means any "Letter of Credit" as
defined in, and issued under, the Original Credit Agreement and that is
outstanding as of the Effective Date.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this
11
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"FS&C" means Xxxxxxx Xxxxxx & Co., LLC.
"Fund" means FS Equity Partners IV, L.P., a limited
partnership controlled by FS&C.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means any Subsidiary Guarantee
Agreement.
"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.
12
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and current accounts payable incurred in the
ordinary course of business, including any such accounts payable arising under
the Services Agreement), (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such Person, whether
or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor. The amount of any Indebtedness described in clause (g) above shall be
limited to the maximum amount payable under the applicable Guarantee of such
Person if such Guarantee contains limitations on the amount payable thereunder.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Information Memorandum" means the Confidential Information
Memorandum dated May 2001, relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to
13
the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period, and (c) with
respect to any Swingline Loan, the day that such Loan is required to be repaid.
"Interest Period" means with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Inventory" means (a) as of any date of determination,
"inventory", as defined in the Uniform Commercial Code as in effect in the State
of New York and (b) all finished goods, wares and merchandise, finished or
unfinished parts, components, assemblies held for sale to third party customers
based on stock ledgers or perpetual inventory reports, defined and classified by
the Borrower and its Subsidiaries on a basis consistent with current and
historical accounting practice in accordance with GAAP.
"IPO" means the issuance by the Borrower of shares of its
common stock to the public pursuant to a bona fide underwritten public offering,
resulting in the receipt by the Borrower of at least $50,000,000 of gross cash
proceeds.
"Issuing Bank" means The Chase Manhattan Bank and each other
Revolving Lender that agrees in writing with the Company to issue Letters of
Credit (provided that notice of such agreement is given to the Administrative
Agent), in each case in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(i).
An Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of such Issuing Bank reasonably acceptable to
the Borrower, in which case the term "Issuing Bank" shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of
14
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
"Leasehold Obligations" means all payments with respect to
rent (including fixed rent and percentage rent), common area maintenance charges
and other monetary obligations under any lease of real property (including any
distribution center or store) where any Inventory is stored or located.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or pursuant to Section 9.02(c), other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance or Section
9.02(c). Unless the context otherwise requires, the term "Lenders" includes the
Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"Leverage Ratio" means, on any date, the ratio of (a) the sum
of (i) the Average Funded Debt as of such date and (ii) solely for the purpose
of the Applicable Margin and not for the purpose of Section 6.13, the aggregate
principal amount of outstanding Mezzanine Securities or Replacement Mezzanine
Securities as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended on such date (or, if such date
is not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of the Borrower most recently ended prior to such date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such
15
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Lien Risk Inventory" means any Inventory that (a) is in the
possession or control of any warehouseman, bailee, agent or processor (other
than Inventory that is in the possession of a delivery service or similar agent
providing transportation services and is in transit) or (b) is stored or
otherwise located in any distribution center, store or other site that is not
owned by a Loan Party.
"Lien Waiver Agreement" means a written agreement satisfying
the requirements of the last sentence of Section 4.08 of the Security Agreement
with respect to any Lien Risk Inventory.
"Loan Documents" means this Agreement, the promissory notes,
if any, executed and delivered pursuant to Section 2.09(e), the Guarantee
Agreements, the Indemnity, Subrogation and Contribution Agreement and the
Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (c) the ability of the Lenders to enforce any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its Subsidiaries in an
aggregate principal amount exceeding $5,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Borrower
or any Subsidiary in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"Maturity Date" means May 3, 2004.
"Mezzanine Securities" means the subordinated notes and junior
subordinated notes issued by the Borrower on August 31, 1999, in the initial
aggregate principal amount of $50,000,000 (and including additional principal
representing accrued
16
interest thereon). Whenever reference is made to the proceeds of the issuance of
Mezzanine Securities, such reference shall include the entire amount of equity
equivalents sold as part of such Mezzanine Securities.
"Mezzanine Securities Documents" means the Securities Purchase
Agreement dated August 31, 1999, among the Borrower, TLI and the Fund and all
other instruments, agreements and other documents evidencing or governing any
Mezzanine Securities or providing for any Guarantee or other right in respect
thereof.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means each parcel of real property and
improve ments thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA and in respect of which the Borrower or any ERISA
Affiliate is or within the previous six years has been obligated to make
contributions.
"Net Cash Proceeds" means, with respect to any event (a) the
cash proceeds received in respect of such event including (i) any cash received
in respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar cash payments, net of (b) the
sum of (i) all commissions, fees and out-of-pocket expenses paid by the Borrower
and its Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and its Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
Taxes paid (or reasonably estimated to be payable) by the Borrower and its
Subsidiaries, and the amount of any reserves established by the Borrower and its
Subsidiaries to fund (A) retained liabilities relating to the assets sold or (B)
contingent liabilities reasonably estimated to be payable, in each case during
the year that such event occurred or the next succeeding year and that are
directly attributable to such event (as determined reasonably and in good faith
by the chief financial officer of the Borrower).
"Obligations" has the meaning assigned to such term in the
Security Agreement.
17
"Original Credit Agreement" means the Credit Agreement dated
as of August 31, 1999 among Xxxxxx'x Trading Company, Inc., the Lenders party
thereto and the Chase Manhattan Bank, as administrative agent.
"Other Taxes" means any and all current or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of any Loan Document.
"Outside Director" means any director on the Board of
Directors of the Borrower who is not a partner of FS&C or an employee or
director of TLI or any of its subsidiaries.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Annex 2 to the Security Agreement or any other form approved by the Collateral
Agent.
"Permitted Acquisition" means any acquisition by the Borrower
or a Subsidiary of all or substantially all the assets of, or all the shares of
capital stock of or other equity interests in, a Person or division or line of
business of a Person if, immediately after giving effect thereto, (a) no Default
has occurred and is continuing or would result therefrom, (b) all transactions
related thereto are consummated in accordance with applicable laws, (c) each
Subsidiary formed for the purpose of or resulting from such acquisition shall be
wholly owned directly or indirectly by the Borrower and all actions required to
be taken with respect to such acquired or newly formed Subsidiary under Sections
5.12 and 5.13 have been taken, (d) the Borrower and its Subsidiaries are in
compliance, on a pro forma basis after giving effect to such acquisition
(without giving effect to any anticipated operating expense reductions or other
cost savings, except to the extent that such reductions or cost savings would be
permitted under Regulation S-X of the Securities and Exchange Commission, as in
effect on the date hereof, with respect to pro forma financial statements
prepared in accordance with such Regulation), with the covenants contained in
Sections 6.13 and 6.14 recomputed as of the last day of the most recently ended
fiscal quarter of the Borrower for which financial statements are available, as
if such acquisition (and any related incurrence or repayment of Indebtedness,
with any new Indebtedness being deemed to be amortized over the applicable
testing period in accordance with its terms, and assuming that any Revolving
Loans borrowed in connection with such acquisition are repaid with excess cash
balances when available) had occurred on the first day of each relevant period
for testing such compliance and (e) the Borrower has delivered to the
Administrative Agent an officers' certificate to the effect set forth in clauses
(a), (b), (c) and (d) above, together with all relevant financial information
for the Person or assets to be acquired.
18
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or government assessments
that are not yet due or are being contested in compliance with Section
5.05;
(b) statutory Liens of landlords and licensors, statutory
Liens of banks and carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, in each
case arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety, indemnity and appeal
bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not interfere with the ordinary conduct of business of the Borrower or
any Subsidiary;
(g) any (i) interest or title of a lessor or sublessor under
any lease not prohibited by this Agreement, (ii) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (iii) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (iii), so long as the holder of such
restriction or encumbrance agrees to recognize the rights of such
lessee or sublessee under such lease;
(h) leases or subleases granted to third parties and not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement; provided
that such Liens encumber only that property subject to the respective
leases;
19
(j) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(k) licenses of patents, trademarks and other intellectual
property rights granted by the Borrower or any of its Subsidiaries in
the ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of the Borrower or
such Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least A-2 from S&P or P-2 from
Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $100,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) investments in money market or mutual funds substantially
all the assets of which are comprised of securities of the types
described in any of clauses (a) through (d) above.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the
20
Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially
in the form of Exhibit F, among the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Secured Parties.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Replacement Mezzanine Securities" means any subordinated debt
securities or preferred stock issued by the Borrower to refinance Mezzanine
Securities in accordance with this Agreement. Whenever reference is made to the
application of proceeds of the issuance of Replacement Mezzanine Securities,
such reference shall include the entire amount of equity equivalents sold as
part of such Replacement Mezzanine Securities.
"Replacement Mezzanine Securities Documents" means any
agreement providing for the purchase from the Borrower of any Replacement
Mezzanine Securities and all other instruments, agreements and other documents
evidencing or governing any Replacement Mezzanine Securities or providing for
any Guarantee or other right in respect thereof.
"Required Lenders" means, at any time, Lenders having
Revolving Exposures and unused Commitments representing more than 50% of the
total Revolving Exposures and unused Commitments at such time.
"Reserve for Leasehold Obligations" means, at any date of
determination, the aggregate amount of Leasehold Obligations that are in arrears
(other than Leasehold Obligations in respect of leases as to which the
Collateral Agent has received a Lien Waiver Agreement).
"Reserve for Slow-moving Items" means, as at any date of
determination (subject to any Borrowing Base Adjustments referred to in the
definition of "Borrowing Base"), the sum of (a) 50% of seasonal "carryover
inventory" and (b) 10% of inventory aged as greater than or equal to "180 days
from receipt date". Each of the terms
21
employed in clauses (a) and (b) are considered to be terms customarily used by
the Borrower and shall be taken from the books and records of the Borrower
determined in a manner consistent with the Borrower's historical accounting and
recordkeeping practices.
"Restricted Payment" means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
Equity Interests in the Borrower or any Subsidiary or (b) any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in the Borrower or any
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in the Borrower or any Subsidiary.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's.
"Secured Parties" shall have the meaning assigned to such term
in the Security Agreement.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit G, among the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Services Agreement" means the Services Agreement dated as of
August 31, 1999 between the Borrower and TLI.
"Shrink Reserve" means, as at any date of determination, the
mathematical average of the shrink results from the most recent two physical
inventories performed during comparable seasonal periods, expressed as a
percentage of sales, multiplied by sales for the relevant year-to-date period
and adjusted for the cost complement for the relevant year-to-date period, all
determined in accordance with the calculations set forth in the form of
Borrowing Base Certificate.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal,
22
special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Administrative Agent is subject (a) with respect to
the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" means each Subsidiary
Guarantee Agreement, substantially in the form of Exhibit E, made by a
Subsidiary Loan Party in favor of the Administrative Agent for the benefit of
the Secured Parties.
"Subsidiary Loan Party" means any Subsidiary other than any
Foreign Subsidiary.
"Supermajority Lenders" means, at any time, Lenders having
66-2/3% or more of the total Revolving Exposures and unused Commitments at such
time.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
23
"Syndication Agent" means Xxxxxxx Xxxxx Credit Partners L.P.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings imposed by any taxing authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"TLI" means The Limited, Inc., a Delaware corporation.
"TLI Entities" means TLI and its Affiliates, other than the
Borrower and its Subsidiaries.
"Transaction Agreement" means the Transaction Agreement dated
as of May 3, 1999, among the Fund, TLI and the Borrower.
"Transactions" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Type (e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context
24
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Exposure exceeding
such Lender's Commitment or (b) the total Revolving Exposures exceeding the sum
of the Borrowing Base then in effect. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Revolving Loans made by the
Lenders
25
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $1,000,000. At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than
$1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $50,000 and not less than $100,000. Borrowings of more than one Type
may be outstanding at the same time; provided that there shall not at any time
be more than a total of twelve Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Eurodollar Revolving Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Borrowing to finance the
reimbursement of an LC Disbursement as contem plated by Section 2.05(e) may be
given not later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the
26
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$10,000,000, (ii) the total Revolving Exposures exceeding the total Commitments
or (iii) the total Revolving Exposures exceeding the Borrowing Base then in
effect; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline
27
Lender (or, in the case of a Swingline Loan made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(e), by remittance to the relevant
Issuing Bank) by 1:00 p.m., New York City time, on the requested date of such
Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the relevant Issuing Bank, at any time and from time to
time during the Availability Period. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, an Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
28
As of the Effective Date, each Existing Letter of Credit shall be deemed to
constitute a Letter of Credit hereunder, as though issued hereunder on the
Effective Date.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to
the relevant Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
relevant Issuing Bank, the Borrower also shall submit a letter of credit
application on such Issuing Bank's standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension, (i) the
LC Exposure shall not exceed $15,000,000, (ii) the total Revolving Exposures
shall not exceed the total Commitments and (iii) the total Revolving Exposures
shall not exceed the Borrowing Base then in effect.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date; provided that clause (i)
shall not prohibit the issuance of a Letter of Credit that by its terms may be
automatically extended (unless an Issuing Bank elects not to extend) for
successive one-year periods (which in no event shall extend beyond the date
referred to in clause (ii)).
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the relevant Issuing Bank or the Lenders, an
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of such Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by such Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each
29
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 2:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of the receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than the applicable minimum Borrowing amount
set forth in Section 2.02(c), the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the relevant
Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, uncon-
30
ditional and irrevocable, and shall be performed strictly in accordance with the
terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Issuing Bank; provided that the foregoing shall not be construed to
excuse the relevant Issuing Bank from liability to the Borrower to the extent of
any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by such Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of the relevant Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the relevant Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The relevant Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. Such relevant Issuing
Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Issuing Bank and the Lenders with
respect to any such LC Disbursement.
31
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
relevant Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (e) of this Section to reimburse an
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of an Issuing Bank. An Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of
cash collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to 105% of the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.10(b), and any such cash collateral so
deposited and held by the Administrative Agent hereunder shall constitute part
of the Borrowing Base for purposes of determining compliance with this
Agreement. Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive
32
right of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent but for the Borrower's account and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse an Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of the Required Lenders), be applied to satisfy other Obligations. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to Section
2.10(b), such amount (to the extent not applied as aforesaid) shall be promptly
returned to the Borrower as and to the extent that, after giving effect to such
return, the Borrower would remain in compliance with Section 2.10(b) and no
Default shall have occurred and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly (but in no event later than 1:00 p.m., New
York City time) crediting the amounts so received, in like funds, to an account
of the Borrower designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to
33
ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
34
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $1,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of Loans in
accordance with this Agreement, the sum of the Revolving Exposures would exceed
the total Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Except as provided in paragraph (d) below, each reduction of
the Commitments shall be made ratably among the Lenders in accordance with their
respective Commitments.
(d) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have the
right, upon five Business
35
Days' written notice to the Administrative Agent (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), to
terminate the entire Commitment of such Lender, so long as (i) all Loans,
together with accrued and unpaid interest, fees and other amounts owing to such
Lender are repaid pursuant to Section 2.10(f) concurrently with the
effectiveness of such termination and (ii) the consents required by Section
9.02(c) in connection with the prepayment shall have been obtained, and at such
time, such Lender shall no longer constitute a "Lender" for purposes of this
Agreement, except with respect to Sections 2.14, 2.15, 2.16 and 9.03 (other than
Section 9.03(c)) of this Agreement, which shall survive as to such Lender.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Maturity Date and (ii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of
the Maturity Date and the first date after such Swingline Loan is made that is
the 15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving
Borrowing is made, the Borrower shall repay all Swingline Loans that were
outstanding on the date that such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be
36
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that the total Revolving
Exposures exceeds the Borrowing Base then in effect, the Borrower shall prepay
Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are
outstanding, deposit cash collateral in an account with the Administrative Agent
pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
Notwithstanding the foregoing provisions of this paragraph, if at any time the
Borrower is required to make a prepayment under this paragraph the Borrower
would incur breakage costs under Section 2.15 as a result of Eurodollar Loans
being prepaid other than on the last day of an Interest Period applicable
thereto (the "Affected Eurodollar Loans"), and provided that no Default has
occurred and is continuing at the time, then the Borrower may in its sole
discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent (which deposit must be equal in amount to the amount of
the Affected Eurodollar Loans not immediately prepaid) to be held as security
for the obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent and shall provide for investments in Permitted
Investments satisfactory to the Administrative Agent and the Borrower, with such
cash collateral to be directly applied upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to the
relevant Loans that are Eurodollar Loans (or such earlier date or dates as shall
be requested by the Borrower), to repay an aggregate principal amount of such
Loans equal to the Affected Eurodollar Loans not initially prepaid pursuant to
this sentence. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, all amounts deposited as cash collateral
pursuant to the immediately preceding sentence shall be held for the sole
benefit of the Lenders whose Loans would otherwise have been immediately prepaid
with the amounts deposited and may be applied to the prepayment of such Loans
immediately if an Event of Default has occurred and is continuing.
(c) In the event that an IPO occurs within six months after
the Effective Date, the Borrower shall apply the Net Cash Proceeds therefrom
(minus the amount of such Net Cash Proceeds applied to redeem Mezzanine
Securities) to the prepayment of the Revolving Borrowings and Swingline
Borrowings (but the reduction of the Commitments will not be required).
(d) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall
37
specify such selection in the notice of such prepayment pursuant to paragraph
(e) of this Section.
(e) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment or (iii) in the
case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City
time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of optional prepayment
is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with Section
2.08. Promptly following receipt of any such notice (other than a notice
relating solely to Swingline Loans), the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Section 2.02. Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.12.
(f) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have the
right, upon five Business Days' prior written notice to the Administrative Agent
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), to prepay all Loans, together with accrued and unpaid interest, fees
and other amounts, owing to such Lender in accordance with Section 9.02(c) so
long as (i) in the case of the prepayment of the Loans of any Lender pursuant to
this Section 2.10(f), the Commitment of such Lender is terminated concurrently
with such prepayment pursuant to Section 2.08(d), and (ii) in the case of the
prepayment of the Loans of any Lender, the consents required by Section 9.02(c)
in connection with the prepayment pursuant to this Section 2.10(f) shall have
been obtained, and at such time, such Lender shall no longer constitute a
"Lender" for purposes of this Agreement, except with respect to Sections 2.14,
2.15, 2.16 and 9.03 (other than Section 9.03(c)) of this Agreement, which shall
survive as to such Lender.
SECTION 2.11. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the rate of 1/2 of 1% per annum on the average daily unused
amount of the Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the
38
first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). For
purposes of computing commitment fees, a Commitment of a Lender shall be deemed
to be used to the extent of the outstanding Revolving Loans and LC Exposure of
such Lender (and the Swingline Exposure of such Lender shall be disregarded for
such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same rate per
annum as the Applicable Margin with respect to Eurodollar Borrowings on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 1/4 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commit ments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Absent
manifest error in the calculation thereof, fees paid shall not be refundable
under any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Margin per annum.
39
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin per annum.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Xxxxxxxxxx-
00
tive Agent notifies the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.14. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing
Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital or
on the capital of such Lender's or such Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or an Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank
or such Lender's or such Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower
41
shall pay such Lender or such Issuing Bank, as the case may be, the amount shown
as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or such Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
such Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(e) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section, shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other
42
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and such Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or
reduction of the deduction, withholding or payment of an Indemnified Tax or
Other Tax under the law of the United States or the jurisdiction in which the
Borrower is located (or any political subdivision thereof), or any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines in good
faith, but in its sole discretion, that it has received a refund (or a reduction
in Taxes attributable to foreign tax credits) in respect of any Indemnified
Taxes or Other Taxes as to which it has
43
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.16, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.16 with respect to
the Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund or reduction in Taxes); provided, however, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.16(f) shall require the Administrative Agent
or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower or any other
Person.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing
of Set- offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except payments to be made directly to an Issuing Bank or Swing
line Lender as expressly provided herein and except that payments pursuant to
Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disburse ments, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
44
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set- off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or an Issuing Bank hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
Issuing Bank, as the case may be, the amount due. In such event, if the Borrower
has not in fact made such payment, then each of the Lenders or such Issuing
Bank, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or such Issuing
Bank with interest thereon, for each day from and including the date such amount
is distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the
45
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.14, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.14 or 2.16, as the case may be, in the future and (ii) in the
reasonable judgment of such Lender, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Banks and Swingline Lender),
which consent shall not be unreasonably withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.14 or payments required to be made pursuant to Section 2.16, such assignment
will result in a material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
46
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to which
any Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of the Borrower or such
Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect, (ii) filings
necessary to perfect Liens created under the Loan Documents, and (iii) routine
corporate filings to maintain the good standing of the Borrower and its
Subsidiaries, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment (other than the payments required to be
made under the Loan Documents and the Original Credit Agreement) to be made by
the Borrower or any of its Subsidiaries, provided that the representation in
this clause (c) is subject to obtaining certain consents that are required under
certain of such agreements or other instruments, which either have been obtained
or the failure to obtain such consents would not reasonably be expected to have
a Material Adverse Effect, and (d) will not result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries, except
Liens created under the Loan Documents.
47
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders' equity and cash flows as
of and for the fiscal year ended February 3, 2001, reported on by Deloitte &
Touche LLP independent public accountants. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower as of such date and for such period in
accordance with GAAP.
(b) Except as disclosed in the financial statements referred
to above or the notes thereto or in the Information Memorandum and except for
the Disclosed Matters, none of the Borrower or its Subsidiaries has, as of the
Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
(c) Since February 3, 2001, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of any real property
that is owned or leased by the Borrower or any of its Subsidiaries as of the
Effective Date.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit,
48
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries
has timely filed or caused to be filed all income tax returns and other material
Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $2,000,000 the fair market value of the assets of such Plan,
and the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $5,000,000 the
fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
the Borrower or any of its Subsidiaries is subject, and all other matters known
to any of them, that,
49
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder contained, as of the date that such
Information Memorandum, report, financial statement, certificate or other
information was so furnished, any material misstatement of fact or omitted to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not materially misleading;
provided that, with respect to projected financial information contained in the
materials referred to above, the Borrower represents only that such information
was prepared in good faith based upon assumptions believed by management of the
Borrower to be reasonable at the time, it being recognized that actual results
during the period or periods covered by such information may differ from the
projected or estimated results set forth therein.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
and jurisdiction of organization of, and the ownership interest of the Borrower
in, each Subsidiary as of the Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Borrower and its
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in
respect of such insurance have been paid. The Borrower believes that the
insurance maintained by or on behalf of the Borrower and its Subsidiaries is
adequate.
SECTION 3.14. Labor Matters. As of the Effective Date, there
are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary
pending or, to the knowledge of the Borrower, threatened. Except for any
violations and failures to make payments that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect (a) the Borrower and
the Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with the hours
worked by or payments made to employees or any similar matters and (b) all
payments due from the Borrower or any Subsidiary, or for which any claim may be
made against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. As of the Effective Date and
immediately following the making of each Loan made on the Effective Date and
after giving effect to the application of the proceeds of such Loans, (a) the
fair value of the assets of each Loan Party, at a fair valuation, will exceed
its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party will be
50
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date.
SECTION 3.16. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when such Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of each pledgor thereunder in such Collateral, in each case prior and
superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are filed
in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral, to the extent that a security interest can be perfected in such
Collateral by filing, recording or registering a financing statement or
analogous document in the United States (or any political subdivision thereof)
and its territories and possessions pursuant to the Uniform Commercial Code or
other applicable law in such jurisdiction, in each case prior and superior in
right to any other Person, other than with respect to Liens expressly permitted
by Section 6.02.
(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person other than Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
51
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of O'Melveny & Xxxxx LLP, counsel for the
Borrower, of Ice Xxxxxx, Indiana counsel for the Borrower and of Xxxxxx
Xxxxxxxx Xxxxxx & Xxxxxxx, Nevada counsel for Xxxxxx'x Nevada, Inc.
substantially in the form of Exhibits X-0, X-0 and B-3, respectively,
and covering such other matters relating to the Loan Parties, the Loan
Documents or the Transactions as the Required Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such
opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan
Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a), (b) and (c)
of Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Administrative Agent shall have received counterparts
of the Pledge Agreement signed on behalf of the Borrower.
52
(g) The Administrative Agent shall have received counterparts
of the Security Agreement signed on behalf of the Borrower, together
with the following:
(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended
to be created under the Security Agreement;
(ii) a completed Perfection Certificate dated the
Effective Date and signed by an executive officer or Financial
Officer of the Borrower, together with all attachments
contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with
respect to the Loan Parties in the jurisdictions contemplated
by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent
that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been
released; and
(iii) evidence that the lockbox and concentration
account arrangements contemplated by the Security Agreement
have been established.
(h) The Administrative Agent shall be reasonably satisfied
that the Borrower's cash management system as contemplated by the
Security Agreement is in place.
(i) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(j) The Borrower (i) shall terminate the Commitments under the
Original Credit Agreement; provided that the Borrower shall not be
required to terminate the Existing Letters of Credit and (ii) shall
have repaid all the amounts owing under such Credit Agreement. The
Administrative Agent shall have received evidence satisfactory to it
that all Liens created under the Original Credit Agreement have been
released.
(k) All consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Transactions shall have been obtained without the imposition of any
burdensome conditions.
(l) The Lenders shall have received (a) the financial
statements described in Section 3.04 and (b) unaudited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows of the Borrower for
53
each fiscal quarter and month ended after the date of the most recent
balance sheet described in Section 3.04 and ended 30 days prior to the
Effective Date (to the extent not delivered to Administrative Agent
prior to the date hereof), which unaudited financial statements shall
not be materially inconsistent with the financial statements or
forecasts previously provided to the Lenders.
(m) The Lenders shall have received the pro forma consolidated
balance sheet of the Borrower described in Section 3.04, reflecting all
pro forma adjustments as if the Transactions had been consummated on
such date, and such pro forma consolidated balance sheet shall be
consistent in all material respects with the forecasts and other
information previously provided to the Lenders. After giving effect to
the Transactions, the Borrower shall not have outstanding any shares of
preferred stock or any Indebtedness, other than (i) Indebtedness
incurred under the Loan Documents, (ii) the Mezzanine Securities and
(iii) other Indebtedness permitted under Section 6.01(a).
(o) The Administrative Agent shall be reasonably satisfied
with the results of an examination by Hilco Appraisal Services, LLC of
(i) the inventory of the Borrower and (ii) the systems providing for
the monitoring and reporting of such inventory.
(p) The Administrative Agent shall have received a completed
Borrowing Base Certificate dated the Effective Date and signed by a
Financial Officer of the Borrower.
The Administrative Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of an Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on May
3, 2001 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of any Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
54
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
(c) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, the total Revolving Exposures shall
not exceed the Borrowing Base then in effect.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, the Borrower's audited consolidated and, to the extent there
are any Subsidiaries that are engaged in retail business, unaudited
consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Deloitte & Touche LLP or other
independent public accountants of recognized national standing (without
a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, the Borrower's
consolidated and, to the extent there are any Subsidiaries that are
engaged in retail business, consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative
form
55
the figures for the corresponding period or periods of (or, in the case
of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated and,
if applicable, consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence
of footnotes;
(c) within 15 days after the end of each month (other than the
last month) of each fiscal quarter of the Borrower, the Borrower's
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such
fiscal month and the then elapsed portion of the fiscal year, all
certified by one of its Financial Officers as presenting in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Sections 6.12, 6.13 and 6.14 and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(f) within 15 days after the end of each fiscal month, a
completed Borrowing Base Certificate calculating and certifying the
Borrowing Base as of the last day of such fiscal month, signed on
behalf of the Borrower by a Financial Officer and accompanied by the
reports and supporting information contemplated by Schedule 1 to
Exhibit C; provided that, at any time that the Excess Availability is
less than 5% of the Borrowing Base, the Administrative Agent may (by
notice to the Borrower) require weekly computation of the Borrowing
Base, in which case such completed Borrowing Base Certificate shall be
delivered within three Business Days after the end of each week
certifying and calculating the Borrowing Base as of the last day of
such week;
56
(g) as soon as the same are available, but in no event more
than 90 days after the commencement of each fiscal year of the
Borrower, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and
for such fiscal year) and, promptly when available, any significant
revisions of such budget;
(h) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;
(i) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request; and
(j) at the same time as it delivers the financial statements
required under the provisions of this Section 5.01(a), a copy of the
"management letter" (if any) delivered to the Borrower by its
independent certified public accountants in connection with the
delivery of such financial statements.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any of its Subsidiaries in which
the amount claimed is $1,500,000 or more and is not covered by
insurance or in which injunctive or similar relief is sought that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $1,000,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
57
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the establishment of any such new office or
facility), other than changes in location of collateral that is in transit to an
office or facility of which the Administrative Agent already has notice, (iii)
in any Loan Party's identity , jurisdiction of organization or corporate
structure or (iv) in any Loan Party's Federal Taxpayer Identification Number.
The Borrower agrees that, in the event of any change referred to in the
preceding sentence, the Borrower will cause all filings to be made under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all of the Collateral (subject only to
cooperation of the Collateral Agent in signing any necessary financing
statements). The Borrower also agrees promptly to notify the Administrative
Agent if any material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower (i) setting forth the
information required pursuant to Section 2 of the Perfection Certificate or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Effective Date or the date of the
most recent certificate delivered pursuant to this Section and (ii) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Security Agreement in such
jurisdictions for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The Borrower
will, and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names
58
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities and Leasehold Obligations, before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (c) such contest effectively
suspends collection of the contested obligation and the enforcement of any Lien
securing such obligation and (d) the failure to make payment pending such
contest would not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will,
and will cause each of its Subsidiaries to, keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause
each of its Subsidiaries to, maintain, with financially sound and reputable
insurance companies (i) adequate insurance for its insurable properties, all to
such extent and against such risks, including fire, casualty and other risks
insured against by extended coverage, as is customary with companies in the same
or similar businesses operating in the same or similar locations, (ii) such
other insurance as is required pursuant to the terms of any Security Document
and (iii) business interruption insurance, insuring against loss of gross
earnings for a period of not less than 12 months arising from any risks or
occurrences required to be covered by insurance pursuant to this Section 5.07.
(b) Fire and extended coverage policies maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i)
a non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Collateral Agent and providing for losses thereunder to be payable
to the Collateral Agent or its designee, (ii) a provision to the effect that
neither the Collateral Agent nor any other party shall be a coinsurer and (iii)
such other provisions as the Administrative Agent may reasonably require from
time to time to protect the interests of the Lenders. Commercial general
liability policies shall be endorsed to name the Collateral Agent as an
additional insured. Business interruption policies shall name the Collateral
Agent as loss payee. Each such policy referred to in this paragraph also shall
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium except upon not less than 10 days' prior written notice
thereof by the insurer to the Collateral Agent (giving the Collateral Agent the
right to cure defaults in the payment of premiums) or (ii) for any other reason
except upon not less than 30 days' prior written notice thereof by the insurer
to the Collateral Agent. The Borrower shall deliver to the Administrative Agent,
prior to the cancelation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously
59
delivered to the Administrative Agent) together with evidence satisfactory to
the Administrative Agent of payment of the premium therefor.
SECTION 5.08. Casualty and Condemnation. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Cash Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Collateral Agent is authorized to collect
such Net Cash Proceeds and, if received by the Borrower or any Subsidiary, such
Net Cash Proceeds shall be paid over to the Collateral Agent; provided that (i)
if the aggregate Net Cash Proceeds in respect of such event (other than proceeds
of business income insurance) are less than $500,000, such Net Cash Proceeds
shall be paid over to the Borrower unless a Default has occurred and is
continuing, and (ii) all proceeds of business income insurance shall be paid
over to the Borrower unless a Default has occurred and is continuing. All such
Net Cash Proceeds retained by or paid over to the Collateral Agent shall be held
by the Collateral Agent and released from time to time to pay the costs of
repairing, restoring or replacing the affected property in accordance with the
terms of the applicable Security Document, subject to the provisions of the
applicable Security Document regarding application of such Net Cash Proceeds
during a Default.
SECTION 5.09. Books and Records; Inspection and Audit Rights.
(a) The Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested; provided that the
Borrower shall be given the opportunity to be present at any discussion with its
independent accountants.
(b) The Borrower will, and will cause each of its Subsidiaries
to, permit the Administrative Agent or any representatives designated by the
Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent) to conduct evaluations of the
Borrower's computation of the Borrowing Base, the assets included in the
Borrowing Base and related systems and procedures, all at such reasonable times
and as often as reasonably requested. The Borrower shall pay the reasonable fees
and expenses of the Administrative Agent or any representatives retained by the
Administrative Agent to conduct any such evaluation; provided that, subject to
(i) the Borrower providing cooperation and support comparable to that provided
in connection with the initial evaluation and appraisal performed prior to
60
the Effective Date and (ii) the scope of required work not materially increasing
as a result of a substantial change in the Borrower's operations, the Borrower
shall not be required to pay such fees and expenses exceeding $80,000 during any
calendar year unless an Event of Default has occurred and is continuing.
(c) The Borrower will, and will cause each of its Subsidiaries
to, permit any representatives designated by the Administrative Agent or the
Required Lenders (including any consultants, accountants, lawyers and
appraisers) to conduct a liquidation analysis, evaluation and appraisal of the
Inventory, all at such reasonable times and as often as reasonably requested.
The Borrower shall pay the reasonable fees and expenses of any representatives
retained by the Administrative Agent or the Required Lenders to conduct such
liquidation analysis, evaluation or appraisal; provided that, subject to (i) the
Borrower providing cooperation and support comparable to that provided in
connection with the initial evaluation and appraisal performed prior to the
Effective Date and (ii) the scope of required work not materially increasing as
a result of a substantial change in the Borrower's operations, the Borrower
shall not be required to pay such fees and expenses exceeding $60,000 during any
calendar year unless an Event of Default has occurred and is continuing.
SECTION 5.10. Compliance with Laws. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Loans will be used (a) for the payment of amounts outstanding
under the Original Credit Agreement, (b) for the payment of fees and expenses
incurred in connection with the Transactions, and (c) for general corporate
purposes, including Capital Expenditures and working capital. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. Letters of Credit will be issued only for
general corporate purposes.
SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Administrative Agent and the Lenders thereof and (a) if such
Subsidiary is a Subsidiary Loan Party, (i) the Borrower will cause such
Subsidiary to execute and deliver a Subsidiary Guarantee Agreement, (ii) the
Borrower and such Subsidiary will execute and deliver (or, if already executed
and delivered, the Borrower will cause such Subsidiary to become a party to) the
Indemnity Subrogation and Contribution Agreement and (iii) the Borrower will
cause such Subsidiary to become a party to each applicable Security Document in
the manner provided therein, in each case within three Business Days after such
Subsidiary is formed or acquired and promptly take such actions to create and
perfect Liens on such Subsidiary's assets to secure the Obligations as the
Administrative Agent or the Required
61
Lenders shall reasonably request and (b) if any Equity Interests or Indebtedness
of such Subsidiary are owned by or on behalf of any Loan Party, the Borrower
will cause such Equity Interests and promissory notes evidencing such
Indebtedness to be pledged pursuant to the Pledge Agreement within three
Business Days after such Subsidiary is formed or acquired (except that, if such
Subsidiary is a Foreign Subsidiary, shares of voting stock of such Subsidiary to
be pledged pursuant to the Pledge Agreement may be limited to 65% of the
outstanding shares of voting stock of such Subsidiary).
SECTION 5.13. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Administrative Agent, from time to time upon request,
evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein but excluding any assets that are
subject to a Lien permitted by clauses (d) and (e) of Section 6.02 to the extent
the terms on which such Lien exists prohibit a Lien securing the Obligations on
such assets) are acquired by the Borrower or any Subsidiary Loan Party after the
Effective Date (other than assets constituting Collateral under the Security
Agreement that become subject to the Lien of the Security Agreement upon
acquisition thereof), the Borrower will notify the Administrative Agent and the
Lenders thereof, and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause such assets to be subjected to a Lien securing
the Obligations and will take, and cause the Subsidiary Loan Parties to take,
such actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section, all at the expense of the Loan Parties.
SECTION 5.14. Lien Waiver Agreements; Leaseholds. (a) The
Borrower will exercise commercially reasonable efforts to obtain and deliver to
the Collateral Agent executed Lien Waiver Agreements with respect to all Lien
Risk Inventory. In any event, the Borrower will obtain Lien Waiver Agreements
such that, at all times on and after the date that is 90 days after the
Effective Date, the amount of Inventory that consists of Lien Risk Inventory
with respect to which Lien Waiver Agreements have not been so obtained does not
exceed 25% of the total amount of Inventory.
(b) The Borrower will, and will cause each of its Subsidiaries
to, pay all Leasehold Obligations and perform in all material respects all other
obligations under all
62
leases and other agreements pertaining to any premises where any Lien Risk
Inventory is stored or located, keep such leases and agreements in full force
and effect and not allow any termination or cancelation thereof, in each case to
the extent that the failure to do so would result in any Lien on any Lien Risk
Inventory. The Borrower will notify the Administrative Agent promptly in the
event of any default or alleged default under any such lease or agreement and
will exercise diligent efforts to cure any such default.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, but not any extensions, renewals or replacements of any
such Indebtedness;
(iii) Indebtedness of the Borrower to any Subsidiary and of
any Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Loan Party to the Borrower
or any Subsidiary Loan Party shall be subject to Section 6.04;
(iv) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any
other Subsidiary; provided that Guarantees by the Borrower or any
Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a
Loan Party shall be subject to Section 6.04;
(v) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets (including the acquisition of store sites and the
construction of stores), including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof; provided that (A) such Indebtedness is incurred
prior to or within 90 days after
63
such acquisition or the completion of such construction or improvement,
(B) the aggregate principal amount of Capital Lease Obligations
permitted by this clause (v), other than as provided in clause (xii)
below, shall not exceed $2,500,000 at any time outstanding and (C) the
aggregate principal amount of Indebtedness, other than Capital Lease
Obligations, incurred in reliance upon this clause (v) during any
period set forth below shall not exceed the amount set forth below
opposite such period, provided that, to the extent that the amount of
such Indebtedness permitted to be incurred during any such period
exceeds the actual amount of such Indebtedness incurred during such
period, the excess shall be permitted in the succeeding periods in
addition to the amount otherwise permitted:
Period Amount
For the fiscal year ending on 2/2/02 $7,000,000
For the fiscal year ending on 2/1/03 $15,000,000
For the fiscal year ending on 1/31/04 $17,000,000
For the period from 1/31/04 to the Maturity Date $7,000,000
(vi) Indebtedness of (A) any Person that becomes a Subsidiary
after the date hereof pursuant to a Permitted Acquisition to the extent
that such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with
such Person becoming a Subsidiary, (B) the Borrower or a Subsidiary to
the extent that such Indebtedness is assumed in connection with a
Permitted Acquisition made by the Borrower or such Subsidiary and is
not created in contemplation of such Permitted Acquisition and (C) the
Borrower in respect of unsecured promissory notes issued as
consideration for Permitted Acquisitions; provided that the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall be
subject to the limitations set forth in clause (g) of Section 6.04;
(vii) Indebtedness in respect of the Mezzanine Securities and
any Replacement Mezzanine Securities in an aggregate principal amount
at any time outstanding not exceeding $50,000,000 plus the principal
amount of any additional Mezzanine Securities and Replacement Mezzanine
Securities issued to satisfy (or resulting from the capitalization of)
obligations in respect of accrued interest in respect of the Mezzanine
Securities and Replacement Mezzanine Securities in accordance with the
Mezzanine Securities Documents or Replacement Mezzanine Securities
Documents, as applicable; provided that any issuance of Replacement
Mezzanine Securities shall be subject to the conditions that (A) either
the terms and conditions of the Replacement Mezzanine Securities and
the Replacement Mezzanine Securities Documents shall not be less
favorable to the Borrower and the Lenders in any material respect than
the terms and conditions of the Mezzanine Securities and the Mezzanine
Securities Documents (as determined by the Administrative Agent) or the
terms and conditions of the Replacement Mezzanine Securities and the
Replacement Mezzanine Securities
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Documents shall be satisfactory to the Required Lenders and (B) the
proceeds of any issuance of Replacement Mezzanine Securities (other
than Replacement Mezzanine Securities issued to satisfy (or resulting
from the capitalization of) obligations in respect of accrued interest
on Replacement Mezzanine Securities previously issued) shall not be
less than an amount sufficient to, and shall be applied to, redeem an
equal amount (taking into account accrued or capitalized interest
thereon) of then-outstanding Mezzanine Securities and any warrants (or
shares of common stock issued upon the exercise thereof) sold
contemporaneously with the Mezzanine Securities;
(viii) Indebtedness in respect of (A) performance bonds,
surety bonds or customs bonds, (B) bonds required to be posted in order
to permit the Borrower and its Subsidiaries to sell firearms licenses
or other licenses on behalf of any Governmental Authority and (C)
insurance premium financing, in each case in the ordinary course of
business;
(ix) Indebtedness of the Borrower incurred to finance and
refinance the construction and improvement of the retail store located
at the Xxxxxx Galleria, Buffalo, New York, including pursuant to the
Ancillary Agreement, in an aggregate principal amount not exceeding
$6,000,000 at any time outstanding (which Indebtedness shall not be
counted towards the limitation set forth in clause (v) above); provided
that all such Indebtedness is repaid upon consummation of any
sale-leaseback referred to in clause (b) of Section 6.11;
(x) other unsecured Indebtedness in an aggregate principal
amount not exceeding $3,500,000 at any time outstanding;
(xi) Indebtedness of the Borrower incurred to finance and
refinance the construction and improvement of the retail store to be
located at The Marketplace Mall, Rochester, New York, in an aggregate
principal amount not exceeding $6,000,000 at any time outstanding
(which limitation shall not be counted towards the limitation set forth
in clause (v) above); provided that all such Indebtedness is repaid
upon consummation of any sale-leaseback referred to in clause (c) of
Section 6.11; and
(xii) Capital Lease Obligations resulting from sale-leaseback
transactions permitted by Section 6.11; provided that (A) such
sale-leaseback transactions relate to properties that have been
financed by incurring Indebtedness permitted by clause (v), (ix) or
(xi) above (any such Indebtedness being referred to as "Construction
Financing") and (B) to the extent that the amount of any such Capital
Lease Obligation exceeds the principal amount of Construction Financing
repaid in connection with such sale-leaseback, the amount of
Construction Financing permitted by clause (v) above to be incurred
during the period in which such Capital Lease Obligation is incurred
shall be reduced by the amount of such excess.
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(b) The Borrower will not, nor will it permit any Subsidiary
to, issue any preferred stock or other preferred Equity Interests (other than
(i) Replacement Mezzanine Securities issued as preferred stock in compliance
with the proviso to clause (viii) of Section 6.01(a) or (ii) preferred stock or
other preferred Equity Interests that are not subject to any mandatory
redemption or repayment requirement (contingent or otherwise) prior to the
Maturity Date or within 90 days thereafter and are not convertible into
Indebtedness) or be or become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other cash payment
in respect of any Equity Interests in the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests, in each
case which would occur during the period beginning on the Effective Date and
ending on the date that is one year after the Maturity Date.
SECTION 6.02. Liens. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
provided that (A) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (B) such Lien shall not apply to any other property
or assets of the Borrower or any Subsidiary and (C) such Lien shall
secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case
may be and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof; and
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (A) such
security interests secure Indebtedness permitted by clause (v), (ix) or
(xi) of Section 6.01(a), (B) such security interests and the
Indebtedness secured thereby (other than Indebtedness
66
permitted by clause (ix) of Section 6.01(a)) are incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does
not exceed 90% of the cost of acquiring, constructing or improving such
fixed or capital assets and (D) such security interests shall not apply
to any other property or assets of the Borrower or any Subsidiary.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not,
nor will it permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary
Loan Party in a transaction in which the surviving entity is a Subsidiary Loan
Party, (iii) any Subsidiary may liquidate or dissolve if the Borrower determines
in good faith that such liquidation or dissolution is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders and (iv) any
Subsidiary may merge with another entity to implement a Permitted Acquisition;
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any Equity
Interests in, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth on
Schedule 6.04, to the extent such investments would not be permitted
under any other clause of this Section;
(c) investments by the Borrower and its Subsidiaries in Equity
Interests in their respective Subsidiaries; provided that (i) any such
Equity Interests held by a Loan Party shall be pledged pursuant to the
applicable Security Document (subject
67
to the limitations applicable to voting stock of a Foreign Subsidiary
referred to in Section 5.12) and (ii) the Borrower shall not have any
Foreign Subsidiaries without the prior written consent of the Required
Lenders and, if the Required Lenders permit any Foreign Subsidiaries,
then the aggregate amount of investments by Loan Parties in, and loans
and advances by Loan Parties to, and Guarantees by Loan Parties of
Indebtedness of, Subsidiaries that are not Loan Parties shall be
subject to limitations established by the Required Lenders;
(d) loans or advances made by the Borrower to any Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary;
provided that (i) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged pursuant to the Pledge
Agreement and (ii) the amount of all such loans and advances by Loan
Parties to Subsidiaries that are not Loan Parties shall be subject to
the limitation set forth in clause (c)(ii) above;
(e) Guarantees constituting Indebtedness permitted by Section
6.01; provided that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Loan Parties Guaranteed by any Loan Party
shall be subject to the limitation set forth in clause (c)(ii) above;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) Permitted Acquisitions; provided that (i) the
consideration for each Permitted Acquisition shall consist solely of
cash, shares of common stock of the Borrower, the assumption of
Indebtedness of the acquired Person or encumbering the acquired assets,
Indebtedness referred to in clause (vi) of Section 6.01(a) or a
combination thereof and (ii) the sum of the principal amount of all
Indebtedness so assumed or otherwise resulting from Permitted
Acquisitions (including Indebtedness referred to in clause (vi) of
Section 6.01(a)) plus the cash consideration paid in connection with
Permitted Acquisitions plus the fair market value (determined in good
faith by the board of directors of the Borrower) of common stock of the
Borrower issued as consideration for Permitted Acquisitions shall not
exceed, on a cumulative basis during the term of this Agreement,
$20,000,000;
(h) loans or advances to employees in the ordinary course of
business; provided that the aggregate principal amount of all loans and
advances permitted by this clause (h) shall not exceed $1,000,000 at
any time outstanding;
(i) in addition to the loans and advances permitted under
clause (h) above, loans or advances to management of the Borrower and
Outside Directors the proceeds of which are applied to purchase Equity
Interests of the Borrower from the Borrower, provided that the
aggregate principal amount of all loans and
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advances pursuant to this paragraph (i) shall not exceed $5,000,000 at
any time outstanding;
(j) extensions of trade credit in the ordinary course of
business;
(k) Capital Expenditures permitted by Section 6.12; and
(l) in addition to other investments permitted by this
Section, investments in an aggregate amount not exceeding $5,000,000.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any Equity Interests owned by it, nor will the Borrower
permit any of its Subsidiaries to issue any additional Equity Interests in such
Subsidiary, except:
(a) sales of inventory, used, obsolete or surplus equipment
and Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary; provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.08;
(c) sales, transfers and dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other
clause of this Section; provided that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (c) shall not exceed $2,000,000 during any fiscal year
of the Borrower;
(d) sales of fixed or capital assets made pursuant to sale and
lease-back transactions permitted under Section 6.11; and
(e) leases and licenses (and subleases and sublicenses) of
real or personal property in the ordinary course of business;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and solely for cash consideration; and provided further that up to
$250,000 of inventory may be disposed of in any fiscal year for promotional or
marketing purposes or similar non-cash barter arrangements in the ordinary
course of business.
SECTION 6.06. Hedging Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
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SECTION 6.07. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, nor will it permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment which would occur during the period beginning
on the Effective Date and ending on the date that is one year after the Maturity
Date, except:
(i) the Borrower may declare and pay dividends with respect to
its capital stock payable solely in additional shares of its common
stock;
(ii) the Borrower may make Restricted Payments to cancel,
redeem, acquire or repurchase shares of common stock of the Borrower
held by, or stock options granted to, directors and employees of the
Borrower in the event of death, disability, termination of employment
or retirement of any such director or employee; provided that the
aggregate amount of such Restricted Payments shall not exceed
$1,000,000 in any fiscal year;
(iii) the Borrower may apply the proceeds of Replacement
Mezzanine Securities to redeem common stock warrants (or shares of
common stock issued upon the exercise thereof) issued by the Borrower
contemporaneously with the Mezzanine Securities pursuant to the
Mezzanine Securities Documents; and
(iv) Subsidiaries may make Restricted Payments to the Borrower
and to wholly owned Subsidiaries of the Borrower and may declare and
pay dividends ratably with respect to their capital stock.
(b) The Borrower will not, nor will it permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) in respect of
principal of or interest on any Mezzanine Securities or Replacement Mezzanine
Securities, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancelation or termination of
any Mezzanine Securities or Replacement Mezzanine Securities which would occur
during the period beginning on the Effective Date and ending on the date that is
one year after the Maturity Date, except:
(i) the Borrower may redeem the Mezzanine Securities with the
Net Cash Proceeds of an IPO if such IPO is consummated within six
months after the Effective Date and such redemption is made promptly
following receipt of such Net Cash Proceeds;
(ii) the Borrower may pay accrued interest on Mezzanine
Securities or Replacement Mezzanine Securities by the issuance of
additional Mezzanine Securities or Replacement Mezzanine Securities, as
applicable, in accordance with the Mezzanine Securities Documents or
Replacement Mezzanine Securities Documents, as applicable; and
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(iii) the Borrower may redeem or otherwise repay Mezzanine
Securities with the proceeds of one or more substantially
contemporaneous issuances of an equal principal amount (or, in the case
of preferred stock, liquidation preference) of Replacement Mezzanine
Securities in accordance with this Agreement.
SECTION 6.08. Transactions with Affiliates. The Borrower will
not, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries that are
Subsidiary Loan Parties which do not involve any other Affiliate, (c) any
Restricted Payment permitted by Section 6.07 and any issuance by the Borrower of
shares of its capital stock, or warrants or options to purchase shares of its
capital stock, that is not otherwise prohibited by this Agreement and (d)
payments made under and in accordance with agreements specified in Schedule 6.08
(without giving effect to any amendment or modification thereof that has not
been approved by the Required Lenders).
SECTION 6.09. Restrictive Agreements. The Borrower will not,
nor will it permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any of its Subsidiaries to create, incur or permit to exist any Lien
upon any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its Equity
Interests or to make or repay loans or advances to the Borrower or any other
Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by any Loan Document, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
6.09 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases or other
contracts restricting the assignment thereof, (vi) clause (a) of the foregoing
shall not apply to provisions in leases of real property restricting the
mortgage thereof and (vii) clause (a) of the foregoing shall not apply to
restrictions on Liens contained in the Mezzanine Securities Documents, and any
future replacements, amendments or modifications thereof; provided that the
terms governing any replacements, amendments or modifications shall be no more
disfavorable to the interests of the Lenders than the terms of the Mezzanine
Securities Documents.
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SECTION 6.10. Amendment of Material Documents. The Borrower
will not, nor will it permit any Subsidiary to, amend, modify or waive any of
its rights under (a) any Mezzanine Securities Document, Replacement Mezzanine
Securities Document or any agreement specified in Schedule 6.08 or (b) its
certificate of incorporation, by-laws or other organizational documents, except
amendments and modification to agreements and documents referred to in clause
(a) or (b) shall be permitted to the extent that the cumulative effect of all
such amendments and modifications do not adversely affect the interests of the
Lenders in any material respect (as determined by the Administrative Agent in
its reasonable discretion).
SECTION 6.11. Sale and Lease-Back Transactions. The Borrower
will not, nor will it permit any Subsidiary to, enter into any arrangement,
directly or indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except for (a) any such sale and leaseback
of property, the acquisition, construction or improvement of which has been
financed with Indebtedness incurred pursuant to clause (v) of Section 6.01(a),
provided that the cash consideration in respect of such sale is at least
sufficient to prepay, and is applied to prepay, such Indebtedness, (b) the sale
and leaseback of the store located at the Xxxxxx Galleria, Buffalo, New York,
and (c) the sale and leaseback of the store to be located at The Marketplace
Mall, Rochester, New York, following the completion of the construction thereof.
SECTION 6.12. Capital Expenditures. The Borrower will not
permit the aggregate amount of Capital Expenditures made by the Borrower and its
Subsidiaries in any fiscal year set forth below to exceed the amount set forth
below opposite such fiscal year, provided that, to the extent that Capital
Expenditures permitted for any such fiscal year exceed the actual Capital
Expenditures for such fiscal year, the excess shall be permitted in the
immediately succeeding fiscal year in addition to the amount otherwise
permitted.
Fiscal year Amount
For the fiscal year ended on 2/2/02 $45,000,000
For the fiscal year ended on 2/1/03 $65,000,000
For the fiscal year ended on 1/31/04 $78,000,000
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio on the last day of any fiscal quarter of the Borrower ending
during any period set forth below to be in excess of the ratio set forth below
opposite such period:
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Period Ratio
For the period beginning on the Effective Date and ending on and including the
last day of the second fiscal quarter of the fiscal year ending on February 2,
2002 3.00 to 1.00
For the period beginning on the first day of the third fiscal quarter of the
fiscal year ending on February 2, 2002 and ending on and including the last day
of the third fiscal quarter of the fiscal year ending on
February 2, 2002 3.50 to 1.00
For the period beginning on the first day of the fourth fiscal quarter of the
fiscal year ending on February 2, 2002 and ending on and including the last day
of the second fiscal quarter of the fiscal year ending on
February 1, 2003 3.00 to 1.00
For the period beginning on the first day of the third fiscal quarter of the
fiscal year ending on February 1, 2003 and ending on and including the last day
of the third fiscal quarter of the fiscal year ending on
February 1, 2003 3.50 to 1.00
For the period beginning on the first day of the fourth fiscal quarter of the
fiscal year ending on February 1, 2003 and ending on and including the last day
of the second fiscal quarter of the fiscal year ending on
January 31, 2004 3.00 to 1.00
Period Ratio
For the period beginning on the first day of the third fiscal quarter of the
fiscal year ending on January 31, 2004 and ending on and including the last day
of the third fiscal quarter of the fiscal year ending on January
31, 2004 3.50 to 1.00
Thereafter 2.75 to 1.00
SECTION 6.14. Coverage Ratio. The Borrower will not permit the
ratio of (a) Consolidated EBITDAR to (b) the sum of Consolidated Interest
Expense and
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Consolidated Rent Expense, in each case for any period of four consecutive
fiscal quarters of the Borrower ending during any period set forth below, to be
less than the ratio set forth below opposite such period:
Period Ratio
For the period beginning on the Effective Date and
ending on and including the last day of the third fiscal
quarter of the fiscal year ending on February 2, 2002 1.50 to 1.00
Thereafter 1.75 to 1.00
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any of its Subsidiaries in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of the Borrower) or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied
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for a period of 30 days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any
Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable;
(g) any event or condition occurs that (i) results in any
Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) (i) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness or (ii)
would have had the results specified in clause (g)(i) of this Article,
but for a waiver, consent or amendment for which the Borrower or any
Subsidiary gave any consideration or benefit of any kind (including any
increased compensation, prepayment, shortening of maturities, security
or other credit support, but excluding reimbursement of expenses and
payment of an amendment or waiver fee in an amount not exceeding 0.125%
of the outstanding principal amount of the Indebtedness in respect of
which such an amendment or waiver is obtained);
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower, any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part
of its assets, and, in any such case, either (A) there shall be a
period of 60 days during which such proceeding or petition shall not be
dismissed, vacated or stayed pending appeal or (B) an order or decree
approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
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(j) the Borrower or any Subsidiary shall become unable, admit
in writing its inability or fail generally to pay its debts as they
become due;
(k) one or more judgments for the payment of money in an
aggregate amount (excluding amounts covered by insurance from
financially sound insurance companies that have acknowledged liability
in respect thereof) in excess of $5,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and either (i)
there shall be a period of 45 consecutive days during which the same
shall not be discharged, vacated or stayed pending appeal or (ii) any
action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
(i) $2,000,000 in any year or (ii) $3,500,000 for all periods;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (i) as a result of
the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a result of
the Collateral Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued
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hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and an Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document,
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(iv) the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Article IV or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Banks and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, in consultation
with the Borrower and on behalf of the Lenders and the Issuing Banks, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
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Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
The provisions of this Article applicable to the
Administrative Agent also shall apply to the Collateral Agent, mutatis mutandis.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 0000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, Attention of Treasurer (Telecopy No.
317-532-0260); with a copy to FS Equity Partners IV, L.P., 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxx Xxxxxxxx (Telecopy No. 212-758-7499);
(b) if to the Administrative Agent or the Collateral Agent, to
The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a copy to The Chase
Manhattan Bank, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxx Xxxx (Telecopy No. (000) 000-0000);
(c) if to an Issuing Bank, to Chase Manhattan Bank Delaware,
Letter of Credit Department, 0000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention of Xxxxxxx Xxxxxxx (Telecopy No. (302)
428-3390);
(d) if to the Swingline Lender, to The Chase Manhattan Bank at
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxx Xxxxxx (Telecopy No. (000) 000-0000); and
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(e) if to any other Lender or Issuing Bank, to it at its
address (or telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, the Collateral Agent,
any Lender or any Issuing Bank may have had notice or knowledge of such Default
at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent or the Collateral Agent, as applicable, and the
Loan Party or Loan Parties that are parties thereto, in each case with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights
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thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release any Subsidiary Loan Party from
its Guarantee under the Subsidiary Guarantee Agreement (except as expressly
provided in the applicable Subsidiary Guarantee Agreement), or limit its
liability in respect of such Guarantee, without the written consent of each
Lender, (vii) release all or substantially all of the Collateral from the Liens
of the Security Documents, without the written consent of each Lender or (viii)
change any of the provisions of the definitions of "Borrowing Base" or "Eligible
Inventory" in a manner that adversely affects the interests of the Lenders
without the written consent of the Supermajority Lenders or (ix) amend or waive
compliance with the requirements of Section 2.10(b) or Section 4.02(c), without
the written consent of the Supermajority Lenders; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, any Issuing Bank or the Swingline
Lender without the prior written consent of the Administrative Agent, the
Collateral Agent, such Issuing Bank or the Swingline Lender, as the case may be.
(c) If, in connection with any proposed amendment,
modification, termination or waiver of or to any of the provisions of this
Agreement or the other Loan Documents contemplated by the first proviso to
Section 9.02(b) the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained,
then the Borrower shall have the right to either (i) replace any such
non-consenting Lender or Lenders with one or more replacement Lenders in the
same manner as provided in Section 2.18(b) so long as at the time of such
replacement, each such replacement Lender consents to the proposed amendment,
modification, termination or waiver, or (ii) terminate any such non-consenting
Lender's Commitment and repay in full its outstanding Loans in accordance with
Sections 2.08(d) and 2.10(f); provided that unless the Commitments that are
terminated and the Loans that are repaid pursuant to the preceding clause (ii)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to the preceding clause (ii), each Lender (other than the
terminated Lender or Lenders) must consent to such termination.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Arranger, the Syndication Agent
and their respective Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and the Collateral Agent,
in connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, any Issuing
Bank or any Lender,
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including the reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Arranger, the Syndication Agent, each Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by any Issuing Bank 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), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent, any
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, such Issuing Bank or the Swingline Lender, as the case may be, such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, such Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the total Revolving
Exposures and unused Commitments at the time.
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(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. 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 (including
any Affiliate of any Issuing Bank that issues any Letter of Credit), except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent 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 (including any Affiliate of
any Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Collateral Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower, the Administrative Agent, the Issuing Banks and the
Swingline Lender must give their prior written consent to such assignment (which
consent shall not be unreasonably withheld), (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 unless
each of the Borrower and the Administrative Agent otherwise consent, (iii) 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, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (h) or (i) of Article VII has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective
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date specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Accep tance, 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 Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 2.14, 2.15, 2.16 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph 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 paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Collateral Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, any Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Collateral Agent, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's
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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 the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations to a Federal Reserve Bank, and with the consent of the Borrower and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its loans to its trustee in support of its obligations to such
trustee, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto in no
event shall such Federal Reserve Bank or trustee be considered to be a "Lender"
or be entitled to require the assigning Lender to take or omit to take any
action hereunder.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Collateral Agent, any Issuing Bank or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this
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Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Arranger, the Syndication Agent and the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, 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 and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
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(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against the Borrower or its properties in the courts
of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
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SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality
of the Information (as defined below) in accordance with their customary
procedures, 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 suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower, (h) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section or becomes available to the Administrative Agent, an Issuing Bank
or any Lender on a nonconfidential basis from a source other than the Borrower
or any of its Affiliates; provided such source is not known by the receiving
party to be bound by a confidentiality agreement with or other contractual,
legal or fiduciary obligation of confidentiality to Borrower or (i) to any
direct or indirect contractual counterparty with a Lender or its Affiliates in a
swap agreement or such counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 9.12);
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any regulatory authority
or representative thereof or pursuant to legal process (other than any such
request in connection with any examination of the financial condition of such
Lender by such regulatory authority) for disclosure of any such nonpublic
information prior to disclosure of such information. For the purposes of this
Section, "Information" means all information received from the Borrower or any
of its Affiliates relating to the Borrower or any of its Subsidiaries or their
respective businesses, other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or any of its Affiliates; provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. 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.
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SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. Notice of Termination of Commitments under the
Original Credit Agreement. The Administrative Agent and the Lenders release the
Borrower of its obligation under Section 2.08 (c) of the Original Credit
Agreement to notify the Administrative Agent of any election to terminate the
Commitments under the Original Credit Agreement and acknowledge that such notice
can be given on the Effective Date of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
XXXXXX'X TRADING COMPANY, INC.,
by /s/ Xxxxxx X. Xxxxx
____________________________________
Name: Xxxxxx X. Xxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by /s/ Xxxxxxxx X. Xxxx
____________________________________
Name: Xxxxxxxx X. Xxxx
Title: Vice President
XXXXXXX XXXXX CREDIT PARTNERS
L.P.,
by /s/ Xxxxxx Xxxxx
____________________________________
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
