EXHIBIT 10.7
AMENDED AND RESTATED
CREDIT AGREEMENT
among
JUMBOSPORTS INC.
as Borrower,
AND
THE SUBSIDIARIES OF JUMBOSPORTS INC.
as Guarantors,
AND
THE LENDERS IDENTIFIED HEREIN,
AND
XXXXXXX BANK, N.A.
as Administrative Agent
AND
NATIONSBANK, N.A. (SOUTH)
as Documentation Agent
DATED AS OF MAY 28, 1997
TABLE OF CONTENTS
SECTION 1....................................................................2
DEFINITIONS AND ACCOUNTING TERMS.............................................2
1.1 DEFINITIONS..............................................................2
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS...........22
1.3 ACCOUNTING TERMS........................................................23
SECTION 2...................................................................23
CREDIT FACILITIES...........................................................23
2.1 REVOLVING LOANS.........................................................23
2.2 LETTER OF CREDIT SUBFACILITY............................................26
2.3 SWING LINE LOANS SUBFACILITY............................................32
SECTION 3...................................................................33
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT................33
3.1 INTEREST................................................................33
3.2 PLACE AND MANNER OF PAYMENTS............................................34
3.3 PREPAYMENTS.............................................................34
3.4 FEES....................................................................36
3.5 PAYMENT IN FULL AT MATURITY.............................................37
3.6 COMPUTATIONS OF INTEREST AND FEES.......................................37
3.7 PRO RATA TREATMENT......................................................38
3.8 SHARING OF PAYMENTS.....................................................39
3.9 CAPITAL ADEQUACY........................................................40
3.10 INABILITY TO DETERMINE INTEREST RATE...................................40
3.11 ILLEGALITY.............................................................40
3.12 REQUIREMENTS OF LAW....................................................41
3.13 TAXES..................................................................42
3.14 INDEMNITY..............................................................45
SECTION 4...................................................................45
GUARANTY....................................................................45
4.1 GUARANTY OF PAYMENT.....................................................45
4.2 OBLIGATIONS UNCONDITIONAL...............................................46
4.3 MODIFICATIONS...........................................................47
4.4 WAIVER OF RIGHTS........................................................47
4.5 REINSTATEMENT...........................................................47
4.6 REMEDIES................................................................48
4.7 LIMITATION OF GUARANTY..................................................48
SECTION 5...................................................................48
CONDITIONS PRECEDENT........................................................48
5.1 CLOSING CONDITIONS......................................................48
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT..................................54
SECTION 6...................................................................55
REPRESENTATIONS AND WARRANTIES..............................................55
6.1 FINANCIAL CONDITION.....................................................55
6.2 NO MATERIAL CHANGE......................................................55
6.3 ORGANIZATION AND GOOD STANDING..........................................55
6.4 DUE AUTHORIZATION.......................................................56
6.5 NO CONFLICTS............................................................56
6.6 CONSENTS................................................................56
6.7 ENFORCEABLE OBLIGATIONS.................................................56
6.8 NO DEFAULT..............................................................57
6.9 OWNERSHIP...............................................................57
6.10 INDEBTEDNESS...........................................................57
6.11 LITIGATION.............................................................57
6.12 TAXES..................................................................57
6.13 COMPLIANCE WITH LAW....................................................57
6.14 ERISA..................................................................58
6.15 SUBSIDIARIES...........................................................59
6.16 USE OF PROCEEDS; MARGIN STOCK..........................................59
6.17 GOVERNMENT REGULATION..................................................60
6.18 ENVIRONMENTAL MATTERS..................................................60
6.19 INTELLECTUAL PROPERTY..................................................61
6.20 SOLVENCY...............................................................62
6.21 INVESTMENTS............................................................62
6.22 LOCATION OF COLLATERAL.................................................62
6.23 DISCLOSURE.............................................................62
6.24 LICENSES, ETC..........................................................62
6.25 NO BURDENSOME RESTRICTIONS.............................................63
6.26 COLLATERAL DOCUMENTS...................................................63
6.27 LEASES.................................................................63
SECTION 7...................................................................63
AFFIRMATIVE COVENANTS.......................................................63
7.1 INFORMATION COVENANTS...................................................63
7.2 FINANCIAL COVENANTS.....................................................67
7.3 PRESERVATION OF EXISTENCE AND FRANCHISES................................68
7.4 BOOKS AND RECORDS.......................................................68
7.5 COMPLIANCE WITH LAW.....................................................68
7.6 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.................................69
7.7 INSURANCE...............................................................69
7.8 MAINTENANCE OF PROPERTY.................................................70
7.9 PERFORMANCE OF OBLIGATIONS..............................................70
7.10 COLLATERAL.............................................................70
7.11 USE OF PROCEEDS........................................................71
7.12 AUDITS/INSPECTIONS.....................................................71
7.13 ADDITIONAL CREDIT PARTIES..............................................71
7.14 INTEREST RATE PROTECTION AGREEMENTS....................................72
SECTION 8...................................................................72
NEGATIVE COVENANTS..........................................................72
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8.1 INDEBTEDNESS............................................................72
8.2 LIENS...................................................................73
8.3 NATURE OF BUSINESS......................................................73
8.4 CONSOLIDATION AND MERGER................................................73
8.5 SALE OR LEASE OF ASSETS.................................................74
8.6 SALE/LEASEBACKS.........................................................75
8.7 ADVANCES, INVESTMENTS AND LOANS.........................................75
8.8 DIVIDENDS...............................................................75
8.9 TRANSACTIONS WITH AFFILIATES............................................75
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS..................................76
8.11 SUBORDINATED DEBT......................................................76
8.12 LIMITATIONS............................................................76
8.13 NEGATIVE PLEDGES.......................................................76
8.14 CAPITAL EXPENDITURES...................................................76
SECTION 9...................................................................77
EVENTS OF DEFAULT...........................................................77
9.1 EVENTS OF DEFAULT.......................................................77
9.2 ACCELERATION; REMEDIES..................................................80
9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT...........................81
SECTION 10..................................................................82
AGENCY PROVISIONS...........................................................82
10.1 APPOINTMENT............................................................82
10.2 DELEGATION OF DUTIES...................................................82
10.3 EXCULPATORY PROVISIONS.................................................83
10.4 RELIANCE ON COMMUNICATIONS.............................................83
10.5 NOTICE OF DEFAULT......................................................84
10.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS...............................84
10.7 INDEMNIFICATION........................................................85
10.8 AGENTS IN THEIR INDIVIDUAL CAPACITY....................................85
10.9 SUCCESSOR AGENT........................................................85
SECTION 11..................................................................86
MISCELLANEOUS...............................................................86
11.1 NOTICES................................................................86
11.2 RIGHT OF SET-OFF.......................................................86
11.3 BENEFIT OF AGREEMENT...................................................86
11.4 NO WAIVER; REMEDIES CUMULATIVE.........................................89
11.5 PAYMENT OF EXPENSES; INDEMNIFICATION...................................89
11.6 AMENDMENTS, WAIVERS AND CONSENTS.......................................90
11.7 COUNTERPARTS...........................................................91
11.8 HEADINGS...............................................................91
11.9 DEFAULTING LENDER......................................................91
11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES........92
11.11 GOVERNING LAW; JURISDICTION...........................................92
11.12 WAIVER OF JURY TRIAL..................................................92
11.13 TIME..................................................................93
11.14 SEVERABILITY..........................................................93
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11.15 ENTIRETY..............................................................93
11.16 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT AGREEMENT;
FURTHER ASSURANCES....................................................93
11.17 CONFIDENTIALITY.......................................................94
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SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Eligible Real Estate
Schedule 3.3(c) Refinanced Properties
Schedule 5.1(g) Mortgaged Properties and Leasehold Properties
Schedule 6.10 Indebtedness
Schedule 6.11 Litigation
Schedule 6.15 Subsidiaries
Schedule 6.18 Environmental Matters
Schedule 6.19 Intellectual Property
Schedule 6.22(a) Real Property Locations
Schedule 6.22(b) Personal Property Locations
Schedule 6.22(c) Chief Executive Offices
Schedule 7.7 Insurance
Schedule 8.2 Liens
Schedule 8.7 Investments
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Revolving Loan Note
Exhibit 2.3(d) Form of Swing Line Loan Note
Exhibit 7.1(c) Form of Borrowing Base Certificate
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.13 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "CREDIT AGREEMENT"), is
entered into as of May 28, 1997 among JUMBOSPORTS INC. (f/k/a Sports &
Recreation, Inc.), a Florida corporation ("BORROWER"), each of Borrower's
Subsidiaries (individually a "GUARANTOR" and collectively the "GUARANTORS"), the
Lenders (as defined herein), XXXXXXX BANK, N.A., as Administrative Agent for the
Lenders and NATIONSBANK, N.A. (SOUTH), as Documentation Agent for the Lenders.
RECITALS
WHEREAS, the Borrower, the Subsidiaries of the Borrower (other than
Construction Resolution, Inc., a Florida corporation and Sports & Recreation,
Inc., a Florida corporation), the Lenders party thereto, Xxxxxxx Bank, N.A.
(successor by merger to Xxxxxxx Bank of Tampa) and NationsBank, N.A. (South) are
currently parties to that certain Amended and Restated Credit Agreement, dated
as of June 4, 1996 (as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of November 6, 1996, the "EXISTING CREDIT
AGREEMENT");
WHEREAS, the Borrower and the Subsidiaries of the Borrower (other than
Construction Resolution, Inc., a Florida corporation and Sports & Recreation,
Inc., a Florida corporation) secured their obligations under the Existing Credit
Agreement pursuant to certain Collateral Documents (as defined in the Existing
Credit Agreement);
WHEREAS, the Borrower recently formed two new wholly owned Subsidiaries,
Construction Resolution, Inc., a Florida corporation and Sports & Recreation,
Inc., a Florida corporation, which shall become Guarantors and
shall secure their obligations as Guarantors;
WHEREAS, the Borrower and the Guarantors have requested that the Lenders
amend and restate the Existing Credit Agreement to provide for, among other
things, an extension of the maturity date of the credit facility;
WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions set forth herein; and
WHEREAS, each reference to a Loan, a Revolving Loan, a Swing Line Loan or
a Letter of Credit shall mean and include any such Loan, Revolving Loan, or
Swing Line Loan made heretofore under the Existing Credit Agreement and any such
Letter of Credit issued heretofore under the Existing Credit Agreement
(including any Letters of Credit deemed to have been issued under the terms of
the Existing Credit Agreement).
1
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"ADDITIONAL CREDIT PARTY" means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.13.
"ADJUSTED BASE RATE" means the Base Rate plus the Applicable
Percentage.
"ADJUSTED EURODOLLAR RATE" means the Eurodollar Rate plus the
Applicable Percentage.
"ADMINISTRATIVE AGENT" means Xxxxxxx Bank, N.A. (or any successor
thereto) or any successor administrative agent appointed pursuant to
Section 10.9.
"AGENTS" mean the Administrative Agent, the Documentation Agent and
the Collateral Agent and any successors and assigns in such capacity.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (ii) to direct
or cause direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract or
otherwise.
"APPLICABLE PERCENTAGE" means the appropriate applicable percentages
corresponding to the Senior Debt to Capitalization Ratio in effect as of
the most recent Calculation Date as shown below:
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====================================================================================================================
APPLICABLE APPLICABLE PERCENTAGE FOR APPLICABLE PERCENTAGE
PRICING SENIOR DEBT TO PERCENTAGE FOR EURODOLLAR BASE RATE LOANS FOR LETTER OF
LEVEL CAPITALIZATION LOANS AND SWING LINE LOANS CREDIT FEE
------- ------------------------- ------------------------- ------------------------- ---------------------
I /less than/.35 to 1.0 1.25% .25% 1.25%
II /less than/.40 to 1.0 but
/greater than/.35 to 1.0 1.50% .50% 1.50%
------- ------------------------- -------------------------- ------------------------- ---------------------
III /less than/.45 to 1.0 but
/greater than/.40 to 1.0 1.75% .75% 1.75%
------- ------------------------- -------------------------- ------------------------- ---------------------
IV /less than/.50 to 1.0 but
/greater than/.45 to 1.0 2.00% 1.00% 2.00%
------- ------------------------- -------------------------- ------------------------- ---------------------
V /less than/.55 to 1.0 but
/greater than/.50 to 1.0 2.25% 1.25% 2.25%
------- ------------------------- -------------------------- ------------------------- ---------------------
VI /greater than/.55 to 1.0 2.50% 1.50% 2.50%
------- ------------------------- -------------------------- ------------------------- ---------------------
The Applicable Percentage for Revolving Loans and the Letter of
Credit Fee shall, in each case, be determined and adjusted quarterly on
the date (each a "CALCULATION DATE") five Business Days after the date by
which the Borrower is required to provide the officer's certificate in
accordance with the provisions of Section 7.1(d); PROVIDED THAT the
initial Applicable Percentage for Revolving Loans and the Letter of Credit
Fee shall be based on Pricing Level IV (as shown above) and shall remain
at Pricing Level IV until the first Calculation Date subsequent to the
Closing Date and, thereafter, the Pricing Level shall be determined by the
then current Senior Debt to Capitalization Ratio; and PROVIDED FURTHER
THAT once during each fiscal year the Borrower shall have the right to
provide an officer's certificate with the delivery of its monthly
financial statements pursuant to Section 7.1(c) (the "EXTRA CALCULATION
DATE") and the Applicable Percentage for Revolving Loans and Letter of
Credit Fee shall adjust on such Extra Calculation Date; and PROVIDED
FURTHER THAT if the Borrower fails to provide the officer's certificate
required by Section 7.1(d) on or before the most recent Calculation Date,
the Applicable Percentage for Revolving Loans and the Letter of Credit Fee
from such Calculation Date shall be based on Pricing Level VI until such
time that an appropriate officer's certificate is provided whereupon the
Pricing Level shall be determined by the then current Senior Debt to
Capitalization Ratio. Each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date (or, if applicable,
from the Extra Calculation Date to the next Calculation Date). Any
adjustment in the Applicable Percentage shall be applicable to all
existing Loans and Letters of Credit as well as any new Loans made or
Letters of Credit issued.
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"ASSET DISPOSITION" means the disposition of any or all of the
assets (or the sale of the stock of a Subsidiary) of the Borrower or any
of its Subsidiaries whether by sale, lease, transfer or otherwise unless
permitted by the terms of Section 8.5(a), (b) and (c).
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"XXXXXXX" means Xxxxxxx Bank, N.A. or any successor thereto.
"BASE RATE" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day PLUS 2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability
or failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.
"BASE RATE LOAN" means any Loan (other than a Swing Line Loan)
bearing interest at a rate determined by reference to the Base Rate.
"BORROWER" means JumboSports Inc., a Florida corporation, together
with any successors and permitted assigns.
"BORROWING BASE ASSETS" means, at any date of determination, the sum
of (a) 55% of Eligible Inventory plus (b) 65% of Eligible Real Estate plus
(c) 55% of Eligible Equipment.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Tampa, Florida,
Charlotte, North Carolina or New York, New York; provided that in the case
of Eurodollar Loans, such day is also a day on which dealings between
banks are carried on in U.S. dollar deposits in the London interbank
market.
"CALCULATION DATE" has the meaning set forth in the definition of
Applicable Percentage.
"CAPITAL EXPENDITURES" means all expenditures of the Credit Parties
and their Subsidiaries which, in accordance with GAAP, would be classified
as capital expenditures, including, without limitation, Capital Leases.
4
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"CAPITALIZATION" means the sum of (a) Senior Debt plus (b)
Subordinated Debt plus (c) stockholders equity of the Borrower and its
Subsidiaries, on a consolidated basis, as determined in accordance with
GAAP.
"CASH EQUIVALENTS" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time and demand deposits and certificates of deposit of
(i) any Lender, (ii) any domestic commercial bank having capital and
surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof
or from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank
being an "APPROVED BANK"), in each case with maturities of not more than
270 days from the date of acquisition, (c) commercial paper and variable
or fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
with a bank or trust company (including any of the Lenders) or securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America
in which the Borrower shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"CASH FLOW COVERAGE RATIO" means the ratio of (a) EBITDAR to (b) the
sum of (i) Rent Expense plus (ii) Interest Expense plus (iii) Scheduled
Funded Debt Payments.
"CHANGE OF CONTROL" means either of the following events: (a) any
"person" or "group" (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) has become, directly or indirectly, the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), by way of
merger, consolidation or
5
otherwise, of 30% or more of the voting power of the Voting Stock of the
Borrower on a fully-diluted basis, after giving effect to the conversion
and exercise of all outstanding warrants, options and other securities of
the Borrower (whether or not such securities are then currently
convertible or exercisable) or (b) a change in control (as defined in the
Indenture) occurs.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.
"COLLATERAL" means all collateral referred to in and covered by the
Collateral Documents.
"COLLATERAL AGENT" means Xxxxxxx Bank, N.A. (or any successor thereto)
or any successor collateral agent appointed pursuant to Section 10.9.
"COLLATERAL DOCUMENTS" means the Security Agreements, the Pledge
Agreements, the Mortgage Documents and such other documents executed and
delivered in connection with the attachment and perfection of the Lenders'
security interests in the assets of the Credit Parties, including without
limitation, the Mortgage Policies, UCC financing statements and trademark
filings.
"COMMITMENT FEES" means the fees payable to the Lenders pursuant to
Section 3.4(a).
"COMMITMENT FEE PERCENTAGE" means (a) if the Senior Debt to
Capitalization Ratio is less than or equal to .45 to 1.0, .375% per annum
or (b) if the Senior Debt to Capitalization Ratio is greater than .45 to
1.0, .50% per annum.
"COMMITMENTS" means the commitment of each Lender with respect to
the Revolving Committed Amount and the Swing Line Committed Amount.
"CREDIT DOCUMENTS" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the LOC Documents, the Fee
Letter and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"CREDIT PARTIES" means the Borrower and the Guarantors and
"CREDIT PARTY" means any one of them.
"CREDIT PARTY OBLIGATIONS" means, without duplication, (a) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agents, whenever
6
arising, under this Credit Agreement, the Notes, the Collateral Documents
or any of the other Credit Documents to which the Borrower or any other
Credit Party is a party and (b) all liabilities and obligations owing from
such Credit Party to any Lender, or any Affiliate of a Lender, arising
under interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements (collectively,
"Hedging Agreements").
"DEBT ISSUANCE" means the issuance of any Indebtedness for borrowed
money by a Credit Party or any of its Subsidiaries, other than
Indebtedness permitted by Section 8.1(a) through 8.1(g).
"DEFAULT" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement (but only for so long as
such Loan is not made or such Participation Interest is not purchased),
(b) has failed to pay to the Agents or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement (but only for so
long as such amount has not been repaid) or (c) has been deemed insolvent
or has become subject to a bankruptcy or insolvency proceeding or to a
receiver, trustee or similar official.
"DOCUMENTATION AGENT" means NationsBank, N.A. (South) (or any
successor thereto) or any successor documentation agent appointed pursuant
to Section 10.9.
"DOLLARS" and "$" means dollars in lawful currency of the United
States of America.
"EBITDA" means, for any period, with respect to the Credit Parties
and their Subsidiaries on a consolidated basis, the sum of (a) Net Income
for such period (excluding the effect of any extraordinary or other
non-recurring gains (including any gain from the sale of property) or
non-cash losses (including the one-time restructuring charge that was
taken in fiscal year 1996 in the amount of $55 million) outside of the
ordinary course of business) plus (b) an amount which, in the
determination of Net Income for such period has been deducted for (i)
Interest Expense for such period, (ii) total Federal, state, foreign or
other income taxes for such period and (iii) all depreciation and
amortization for such period, all as determined in accordance with GAAP.
"EBITDAR" means, for any period, the sum of EBITDA for such period
PLUS an amount which in the determination of Net Income for such period
has been deducted for Rent Expense for such period, all as determined in
accordance with GAAP.
"EFFECTIVE DATE" means the date, as specified by the Documentation
Agent in writing, on which the conditions set forth in Section 5.1 shall
have been fulfilled (or waived
7
in the sole discretion of the Lenders) and on which the initial Loans
shall have been made and/or the initial Letters of Credit shall have been
issued.
"ELIGIBLE ASSIGNEE" means (a) any Lender or Affiliate or subsidiary
of a Lender and (b) any other commercial bank, financial institution,
institutional lender or "accredited investor" (as defined in Regulation D
of the Securities and Exchange Commission) with capital of at least $500
million and with an office in the United States.
"ELIGIBLE EQUIPMENT" means, as of any date of determination, the
book value of all equipment, furniture and fixtures owned by any Credit
Party but excluding any such equipment, furniture or fixtures (i) subject
to a Lien other than any Lien described in clauses (a) through (d) of the
definition of Permitted Liens, (ii) not useable or saleable at prices
approximating their book value in the ordinary course of business, (iii)
located outside the United States, (iv) located at a location not owned or
leased by a Credit Party, (v) located at a location leased by the
applicable Credit Party with respect to which the Collateral Agent shall
not have received a landlord's waiver and estoppel letter reasonably
satisfactory to the Collateral Agent and (vi) which fails to meet such
other specifications and requirements as may from time to time be
established by the Collateral Agent in its reasonable discretion.
"ELIGIBLE INVENTORY" means, as of any date of determination and
without duplication, the lower of the aggregate book value (based on a
FIFO or a moving average cost valuation, consistently applied) or fair
market value of all raw materials and finished goods inventory owned by
any Credit Party less appropriate reserves determined in accordance with
GAAP, but excluding in any event (i) inventory subject to any Lien, other
than any Lien described in clauses (a) through (d) of the definition of
Permitted Lien, (ii) inventory which is not in good condition or fails to
meet standards for sale or use imposed by governmental agencies,
departments or divisions having regulatory authority over such goods,
(iii) inventory which is not useable or saleable at prices approximating
their cost in the ordinary course of the applicable Credit Party's
business (including without duplication the amount of any reserves for
obsolescence, unsalability or decline in value), (iv) inventory located
outside of the United States, (v) inventory located at a location not
owned or leased by the applicable Credit Party, (vi) inventory located at
a location leased by the applicable Credit Party with respect to which the
Collateral Agent shall not have received a landlord's waiver and estoppel
letter reasonably satisfactory to the Collateral Agent, (vii) inventory
which is leased or on consignment and (viii) inventory which fails to meet
such other specifications and requirements as may from time to time be
established by the Collateral Agent in its reasonable discretion; it being
agreed that the value of Eligible Inventory shall not include any
capitalized procurement costs.
"ELIGIBLE REAL ESTATE" means the value of the real property set
forth on SCHEDULE 1.1(B), as such value may be altered from time to time
pursuant to new appraisals of such real property performed subsequent to
the Closing Date at the request of an Agent; provided that such appraisals
may be requested no more than once per fiscal year. The Borrower
8
shall provide to the Agents a revised updated SCHEDULE 1.1(B) to the
Agents (or information sufficient to allow the Agents to update such
SCHEDULE 1.1(B)) each time a parcel of real estate on SCHEDULE 1.1(B) is
sold or refinanced or a parcel of real estate is purchased and a first
priority perfected Lien on such real estate has been granted to the
Lenders.
"ENVIRONMENTAL CLAIM" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or
written claim whether administrative, judicial, or private in nature
arising (a) pursuant to, or in connection with, an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any assessment, abatement, removal, remedial,
corrective, or other response action in connection with an Environmental
Law or other order of a Governmental Authority or (d) from any actual or
alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"ENVIRONMENTAL LAWS" means any current or future legal requirement
of any Governmental Authority pertaining to (a) the protection of health,
safety, and the indoor or outdoor environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection
or use of surface water and groundwater or (d) the management,
manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement,
removal, remediation or handling of, or exposure to, any hazardous or
toxic substance or material or (e) pollution (including any release to
land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 USC 9601 ET SEQ., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid
Waste Amendment of 1984, 42 USC 6901 ET SEQ., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 ET
SEQ., Clean Air Act of 1966, as amended, 42 USC 7401 ET SEQ., Toxic
Substances Control Act of 1976, 15 USC 2601 ET SEQ., Hazardous Materials
Transportation Act, 49 USC App. 1801 ET SEQ., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 ET SEQ., Oil Pollution Act of
1990, 33 USC 2701 ET SEQ., Emergency Planning and Community Right-to-Know
Act of 1986, 42 USC 11001 ET SEQ., National Environmental Policy Act of
1969, 42 USC 4321 ET SEQ., Safe Drinking Water Act of 1974, as amended, 42
USC 300(f) ET SEQ., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.
"EQUITY ISSUANCE" means any issuance by the Borrower to any Person
(other than a member of senior management of the Borrower) of (a) shares
of its capital stock or other equity interests, (b) any shares of its
capital stock or other equity interests pursuant to the exercise of
options or warrants or (c) any shares of its capital stock or other equity
interests pursuant to the conversion of any debt securities to equity.
9
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of ERISA shall be construed also to refer to
any successor sections.
"ERISA AFFILIATE" means an entity, whether or not incorporated,
which is under common control with any Credit Party or any of its
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes any Credit Party or any of its
Subsidiaries and which is treated as a single employer under Sections
414(b), (c), (m), or (o) of the Code.
"EURODOLLAR LOAN" means a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"EURODOLLAR RATE" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = LONDON INTERBANK OFFERED RATE
---------------------------------
1 - Eurodollar Reserve Percentage
"EURODOLLAR RESERVE PERCENTAGE" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined), whether or not Lender has any
Eurocurrency liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be
available from time to time to a Lender. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
"EVENT OF DEFAULT" means any of the events or circumstances
described in Section 9.1.
10
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as amended,
modified, succeeded or replaced from time to time.
"EXISTING LETTERS OF CREDIT" means those letters of credit issued
under the Existing Credit Agreement that are outstanding on the Effective
Date.
"EXTENSION OF CREDIT" means, as to any Lender, the making of a Loan
by such Lender (or a participation therein by a Lender) or the issuance
of, or participation in, a Letter of Credit by such Lender.
"FEDERAL FUNDS RATE" means for any day the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent.
"FEE LETTER" means that certain letter agreement, dated as of May
12, 1997, between the Agents and the Borrower, as amended, modified,
supplemented or replaced from time to time.
"FUNDED DEBT" means, without duplication, the sum of (a) all
Indebtedness of the Credit Parties and their Subsidiaries for borrowed
money, (b) all purchase money Indebtedness of the Credit Parties and their
Subsidiaries, (c) the principal portion of all obligations of the Borrower
and its Subsidiaries under Capital Leases, (d) all obligations, contingent
or otherwise, relative to the face amount of all letters of credit (other
than letters of credit supporting trade payables in the ordinary course of
business), whether or not drawn, and banker's acceptances issued for the
account of such Person (it being understood that, to the extent an undrawn
letter of credit supports another obligation consisting of Indebtedness,
in calculating aggregated Indebtedness only such other obligation shall be
included), (e) all Guaranty Obligations of the Credit Parties and their
Subsidiaries with respect to Funded Debt of another Person, (f) all Funded
Debt of another entity secured by a Lien on any property of the Credit
Parties and their Subsidiaries whether or not such Funded Debt has been
assumed by a Credit Party or any of its Subsidiaries, (g) all Funded Debt
of any partnership or unincorporated joint venture to the extent a Credit
Party or one of its Subsidiaries is legally obligated or has a reasonable
expectation of being liable with respect thereto, net of any assets of
such partnership or joint venture and (h) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan
11
or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified
as an operating lease in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.
"GOVERNMENTAL AUTHORITY" means any Federal, state, local, provincial
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"GUARANTOR" means each of the Subsidiaries of the Borrower and each
Additional Credit Party which has executed a Joinder Agreement, together
with their successors and assigns.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person
in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (a) to purchase any
such Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support for
the payment or purchase of such indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such other
Person (including, without limitation, maintenance agreements, comfort
letters, take or pay arrangements, put agreements or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such other
Person, (c) to lease or purchase property, securities or services
primarily for the purpose of assuring the owner of such Indebtedness or
(d) to otherwise assure or hold harmless the owner of such Indebtedness or
obligation against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein)
be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made.
"HAZARDOUS MATERIALS" means any substance, material or waste defined
or regulated in or under any Environmental Laws.
"HEDGING AGREEMENTS" has the meaning set forth in the definition of
Credit Party Obligations.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made (c) all obligations of
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person to the extent of the value
of such
12
property (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations, other than intercompany items, of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) 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, or payable out of
the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
(f) all Guaranty Obligations of such Person, (g) the principal portion of
all obligations of such Person under (i) Capital Leases and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product of such Person where such
transaction is considered borrowed money indebtedness for tax purposes but
is classified as an operating lease in accordance with GAAP, (h) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate or commodity price hedging agreements, (i) the maximum
amount of all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (j)
all preferred stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date and (k) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of receivables
(or similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner that would not be
reflected on the balance sheet of such Person in accordance with GAAP. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with
respect thereto.
"INDENTURE" means that certain Indenture, dated as of November 4,
1993, among Sports & Recreation, Inc. as issuer, and Xxxxxxx Xxxxx Trust
Company, National Association, as trustee, as the same may be modified,
supplemented or amended from time to time.
"INTEREST EXPENSE" means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, all net interest
expense, including the interest component under Capital Leases, as
determined in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) as to Base Rate Loans and Swing
Line Loans, each January 1, April 1, July 1 and October 1 and on the
Revolving Loan Maturity Date and (b) as to Eurodollar Loans, on the last
day of each applicable Interest Period and on the Revolving Loan Maturity
Date and, in addition, where the applicable Interest Period for a
Eurodollar Loan is greater than three months, then also on the date three
months from the beginning of the Interest Period and each three months
thereafter.
13
"INTEREST PERIOD" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Revolving Loan Maturity Date and (c) where an Interest Period
begins on a day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
"INVESTMENT" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligation
(including any support for a Letter of Credit issued on behalf of such
Person) incurred for the benefit of such Person.
"ISSUING LENDER" means either of the Agents.
"ISSUING LENDER FEES" has the meaning set forth in Section 3.4(b).
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the
form of EXHIBIT 7.13.
"LEASEHOLD MORTGAGED PROPERTIES" has the meaning set forth in
Section 5.1(g).
"LEASEHOLD MORTGAGES" has the meaning set forth in Section 5.1(g).
"LENDER" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"LETTER OF CREDIT" means a Letter of Credit issued for the account
of a Credit Party by the Issuing Lender pursuant to Section 2.2, as such
Letter of Credit may be amended, modified, extended, renewed or replaced.
"LETTER OF CREDIT FEE" shall have the meaning assigned to such term
in Section 3.4(b).
14
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including, without
limitation, any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, and any lease in the nature
thereof.
"LOAN" or "LOANS" means the Revolving Loans and the Swing Line Loans
(or any portion thereof), individually or collectively, as appropriate.
"LOC DOCUMENTS" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for
(a) the rights and obligations of the parties concerned or at risk or (b)
any collateral security for such obligations.
"LOC OBLIGATIONS" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit PLUS
(b) the aggregate amount of all drawings under Letters of Credit honored
by an Issuing Lender but not theretofore reimbursed.
"LOC PARTICIPANTS" means the Lenders.
"LONDON INTERBANK OFFERED RATE" means, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however,
if more than one rate is specified on Telerate Page 3750, the applicable
rate shall be the arithmetic mean of all such rates. If, for any reason,
such rate is not available, the term "LONDON INTERBANK OFFERED RATE" shall
mean, with respect to any Eurodollar Loan for the Interest Period
applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates.
"MANDATORY BORROWING" has the meaning set forth in Section 2.2(e).
15
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
operations, financial condition, business or prospects of the Credit
Parties and their Subsidiaries taken as a whole, (b) the ability of a
Credit Party to perform its respective obligations under this Credit
Agreement or any of the other Credit Documents, or (c) the validity or
enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"MORTGAGE DOCUMENTS" means the Mortgages and the Leasehold
Mortgages, the Mortgage Policies and such other documents and agreements
executed or delivered in connection with the Real Properties.
"MORTGAGE POLICIES" has the meaning set forth in Section 5.1(g).
"MORTGAGES" has the meaning set forth in Section 5.1(g).
"MORTGAGED PROPERTIES" has the meaning set forth in Section 5.1(g).
"MULTIEMPLOYER PLAN" means a Plan covered by Title IV of ERISA which
is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of
ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan covered by Title IV of ERISA,
other than a Multiemployer Plan, which any Credit Party or any of its
Subsidiaries or any ERISA Affiliate and at least one employer other than a
Credit Party or any of its Subsidiaries or any ERISA Affiliate are
contributing sponsors.
"NET CASH PROCEEDS" means the gross cash proceeds (including cash
actually received (but only when received) by way of deferred payment
pursuant to a promissory note, receivable, or otherwise) received from an
Asset Disposition, an Equity Issuance or a Debt Issuance net of (a)
transaction costs payable to third parties and (b) a good faith estimate
of the taxes payable with respect to such proceeds, including, without
duplication, withholding taxes and any taxes payable to a third party in
connection with distribution of such proceeds from a Subsidiary of the
Borrower to the Borrower.
"NET INCOME" means, for any period, the net income after taxes for
such period of the Credit Parties and their Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"NET WORTH" means, as of any date, shareholders' equity or net worth
of the Credit Parties and their Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
16
"NON-EXCLUDED TAXES" has the meaning set forth in Section 3.13.
"NOTE" or "NOTES" means the Revolving Loan Notes and the Swing Line
Loan Note, individually or collectively, as appropriate.
"NOTICE OF BORROWING" means a request by the Borrower for a
Revolving Loan, in the form of EXHIBIT 2.1(B).
"NOTICE OF CONTINUATION/CONVERSION" means a request by the Borrower
to continue an existing Eurodollar Loan to a new Interest Period or to
convert a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a
Eurodollar Loan, in the form of EXHIBIT 2.1(E).
"OPERATING LEASE" means, as to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as an operating lease.
"PARTICIPATION INTEREST" means the Extension of Credit by a Lender
by way of a purchase of a Participation Interest in Letters of Credit or
LOC Obligations as provided in Section 2.2 or in any Loans as provided in
Section 2.3 or 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"PERMITTED INVESTMENTS" means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms, (c) inventory, raw materials and general
intangibles (to the extent such general intangible is not a Capital
Expenditure) acquired in the ordinary course of business, (d) Investments
by one Credit Party in another Credit Party, (e) loans to directors,
officers or employees in the ordinary course of business for reasonable
business expenses, not to exceed in the aggregate $500,000 at any one
time; provided that no such loan may remain outstanding for longer than 18
months, (f) loans to executive management of the Borrower to purchase
stock of the Borrower up to $1,000,000 in the aggregate at any one time,
(g) the Investments set forth on SCHEDULE 8.7, (h) Investments in Capital
Expenditures to the extent permitted by Section 8.14 and (i) inventory
acquired in the ordinary course of business.
"PERMITTED LIENS" means (a) Liens securing Credit Party Obligations,
(b) Liens for taxes not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property
subject to any such Lien is not yet subject to foreclosure, sale or loss
on account thereof), (c) Liens in respect of property imposed by law
arising in the ordinary course of business such as materialmen's,
mechanics', warehousemen's, carrier's,
17
landlords' and other nonconsensual statutory Liens which are not yet due
and payable or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP
have been established (and as to which the property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account thereof),
(d) pledges or deposits made in the ordinary course of business to secure
payment of worker's compensation insurance, unemployment insurance,
pensions or social security programs, (e) Liens arising from good faith
deposits in connection with or to secure performance of tenders, bids,
leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business
(other than obligations in respect of the payment of borrowed money), (f)
Liens arising from good faith deposits in connection with or to secure
performance of statutory obligations and surety and appeal bonds, (g)
easements, rights-of-way, restrictions (including zoning restrictions),
matters of plat, minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered property for its intended purposes, (h) judgment
Liens that would not constitute an Event of Default, (i) Liens in
connection with Indebtedness allowed under Section 8.1(f) and 8.1(h), (j)
Liens arising by virtue of any statutory or common law provision relating
to banker's liens, rights of setoff or similar rights as to deposit
accounts or other funds maintained with a creditor depository institution,
(k) Liens existing on the date hereof and identified on SCHEDULE 8.2;
provided that no such Lien shall extend to any property other than the
property subject thereto on the Closing Date and (l) Permitted
Encumbrances (as defined in any Mortgage Document).
"PERSON" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any Governmental Authority.
"PLAN" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which any Credit
Party or any of its Subsidiaries or any ERISA Affiliate is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means any Amended and Restated Pledge Agreement
executed and delivered by a Credit Party in favor of the Collateral Agent,
for the benefit of the Lenders, to secure its obligations under the Credit
Documents, as amended, modified, extended, renewed or replaced from time
to time.
"PRIME RATE" means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in Tampa,
Florida (or such other principal office of the Administrative Agent as
communicated in writing to the Borrower and the Lenders) as its Prime
Rate. Any change in the interest rate resulting from a change in the Prime
Rate shall become effective as of 12:01 a.m. of the Business Day on which
each
18
change in the Prime Rate is announced by the Administrative Agent. The
Prime Rate is a reference rate used by the Administrative Agent in
determining interest rates on certain loans and is not intended to be the
lowest rate of interest charged on any extension of credit to any debtor.
"REAL PROPERTIES" means the Mortgaged Properties and the Leasehold
Mortgaged Properties.
"REFINANCED PROPERTIES" means the properties listed on SCHEDULE
3.3(C).
"REGULATION D, G, U, OR X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"RENT EXPENSE" means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, all rent payable
under Operating Leases, as determined in accordance with GAAP.
"REPORTABLE EVENT" means a "reportable event" as defined in Section
4043 of ERISA with respect to which the notice requirements to the PBGC
have not been waived.
"REQUIRED LENDERS" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes at least 66 2/3% of the Credit Exposure
of all Lenders at such time; provided, however, that if any Lender shall
be a Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes of the preceding
sentence, the term "Credit Exposure" as applied to each Lender shall mean
(a) at any time prior to the termination of the Commitments, the sum of
the Revolving Commitment Percentage of such Lender multiplied by the
Revolving Committed Amount and (b) at any time after the termination of
the Commitments, the sum of (i) the principal balance of the outstanding
Loans of such Lender plus (ii) such Lender's Participation Interests in
the face amount of the outstanding Letters of Credit.
"REQUIREMENT OF LAW" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"REVOLVING LOAN COMMITMENT PERCENTAGE" means, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE
1.1(A), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
19
"REVOLVING COMMITTED AMOUNT" means (a) from the Closing Date to
February 26, 1998, TWO HUNDRED THIRTY FIVE MILLION DOLLARS ($235,000,000)
and (b) from February 27, 1998 to the Revolving Loan Maturity Date, TWO
HUNDRED TEN MILLION DOLLARS ($210,000,000) or such lesser amount as the
Revolving Committed Amount may be reduced pursuant to Section 2.1(d) or
Section 3.3(c).
"REVOLVING LOAN MATURITY DATE" means May 31, 1999.
"REVOLVING LOANS" means the Revolving Loans made to the Borrower
pursuant to Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" means the amended and restated
promissory notes of the Borrower in favor of each of the Lenders
evidencing the Revolving Loans provided pursuant to Section 2.1,
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, supplemented, extended, renewed or replaced from
time to time and as evidenced in the form of EXHIBIT 2.1(G).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"SCHEDULED FUNDED DEBT PAYMENTS" means, as of the date of
determination, for the Credit Parties and their Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal and any
required prepayments on Funded Debt for the applicable period ending on
the date of determination (including the principal component of payments
due on Capital Leases during the applicable period ending on the date of
determination), excluding any payments due at maturity with respect to
Indebtedness permitted by Section 8.1(c) to the extent such Indebtedness
has been refinanced.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SECURITY AGREEMENTS" means any Amended and Restated Security
Agreement executed and delivered by a Credit Party in favor of the
Collateral Agent for the benefit of the Lenders to secure its obligations
under the Credit Documents, as such may be amended, modified, extended,
renewed, restated or replaced from time to time.
"SENIOR DEBT" means all Funded Debt other than the Subordinated
Debt.
"SENIOR DEBT TO CAPITALIZATION RATIO" means the ratio of (a) Senior
Debt to (b) Capitalization.
20
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOLVENT" means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature
in the normal course of business, (b) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (c) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's assets would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry
in which such Person is engaged or is to engage, (d) the fair value of the
assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person and
(e) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"SUBORDINATED DEBT" means the $74,750,000 of Indebtedness evidenced
by the Indenture.
"SUBSIDIARY" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"SWING LINE COMMITTED AMOUNT" means $10,000,000.
"SWING LINE LOANS" means the loans made by Xxxxxxx to the Borrower
pursuant to Section 2.3.
"SWING LINE LOAN NOTE" means the promissory note of the Borrower in
favor of Xxxxxxx evidencing the Swing Line Loans as such promissory note
may be amended, modified, supplemented, extended, renewed or replaced from
time to time and as evidenced in the form of Exhibit 2.3(d).
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"TERMINATION EVENT" means (a) with respect to any Single Employer
Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was
a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the
distribution of a notice of intent to terminate or the actual termination
of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d) the
institution of proceedings to terminate or the actual termination of a
Plan by the PBGC under Section 4042 of ERISA; (e) any event or condition
which might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of any Credit Party or any
of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
"UNUSED COMMITMENT" means, for any period, the amount by which (a)
the then applicable aggregate Revolving Committed Amount exceeds (b) the
daily average sum for such period of the outstanding aggregate principal
amount of all Revolving Loans plus the aggregate amount of LOC Obligations
outstanding.
"VOTING STOCK" of a corporation means all classes of the capital
stock of such corporation then outstanding and normally entitled to vote
in the election of directors.
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Agreement to "Articles", "Sections", "Schedules"
or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Agreement unless otherwise specifically provided.
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1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Borrower to the Lenders or if
GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements described in Section 5.1(c)); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Lenders have been informed of the change in GAAP
affecting such financial statements, if later), then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) REVOLVING LOAN COMMITMENT. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make revolving loans
(each a "REVOLVING LOAN" and collectively the "REVOLVING LOANS") to the
Borrower, in Dollars, at any time and from time to time, during the period
from and including the Effective Date to but not including the Revolving
Loan Maturity Date (or such earlier date if the Revolving Committed Amount
has been terminated as provided herein); PROVIDED, HOWEVER, that (i) the
sum of the aggregate amount of Revolving Loans outstanding plus the
aggregate amount of LOC Obligations outstanding plus the aggregate amount
of Swing Line Loans outstanding shall not exceed the lesser of (x) the
Revolving Committed Amount and (y) the Borrowing Base Assets and (ii) with
respect to each individual Lender (other than Xxxxxxx with respect to
Swing Line Loans), a Lender's pro rata share of outstanding Revolving
Loans PLUS such Lender's pro rata share of outstanding LOC Obligations
PLUS such Lender's pro rata share of outstanding Swing Line Loans, if any,
shall not exceed such Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount. Subject to the terms of this
23
Credit Agreement (including Section 3.3), the Borrower may borrow, repay
and reborrow Revolving Loans.
(b) METHOD OF BORROWING FOR REVOLVING LOANS. By no later than 11:00
a.m. (i) on the date of the requested borrowing of Revolving Loans that
will be Base Rate Loans or (ii) three Business Days prior to the date of
the requested borrowing of Revolving Loans that will be Eurodollar Loans,
the Borrower shall submit a written Notice of Borrowing in the form of
EXHIBIT 2.1(B) to the Administrative Agent setting forth (A) the amount
requested, (B) whether such Revolving Loans shall accrue interest at the
Adjusted Base Rate or the Adjusted Eurodollar Rate, (C) with respect to
Revolving Loans that will be Eurodollar Loans, the Interest Period
applicable thereto and (D) certification that the Borrower has complied in
all respects with Section 5.2.
(c) FUNDING OF REVOLVING LOANS. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Lenders as
to the terms thereof. Each Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the
Administrative Agent by 1:00 p.m. on the date specified in the Notice of
Borrowing by deposit, in Dollars, of immediately available funds at the
offices of the Administrative Agent at its principal office in Tampa,
Florida or at such other address as the Administrative Agent may designate
in writing. The amount of the requested Revolving Loans will then be made
available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office of the Administrative
Agent, to the extent the amount of such Revolving Loans are made available
to the Administrative Agent.
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Revolving Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations hereunder.
Unless the Administrative Agent shall have been notified by any Lender
prior to the date of any such Revolving Loan that such Lender does not
intend to make available to the Administrative Agent its portion of the
Revolving Loans to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent on the date of such Revolving Loans, and the
Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered
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by the Administrative Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for such Revolving Loan pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds Rate.
(d) REDUCTIONS OF REVOLVING COMMITTED AMOUNT. Upon at least three
Business Days' notice, the Borrower shall have the right to permanently
terminate or reduce the aggregate unused amount of the Revolving Committed
Amount at any time or from time to time; provided that (i) each partial
reduction shall be in an aggregate amount at least equal to $5,000,000 and
in integral multiples of $1,000,000 above such amount and (ii) no
reduction shall be made which would reduce the Revolving Committed Amount
to an amount less than the sum of the aggregate amount of outstanding
Revolving Loans PLUS the aggregate amount of outstanding LOC Obligations
PLUS the aggregate amount of outstanding Swing Line Loans. Any reduction
in (or termination of) the Revolving Committed Amount shall be permanent
and may not be reinstated. The Administrative Agent shall immediately
notify the Lenders of any reduction in the Revolving Committed Amount.
(e) CONTINUATIONS AND CONVERSIONS. Subject to the terms of Section
5.2, the Borrower shall have the option, on any Business Day, to continue
existing Eurodollar Loans for a subsequent Interest Period, to convert
Base Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into
Base Rate Loans; provided, however, that (i) each such continuation or
conversion must be requested by the Borrower pursuant to a written Notice
of Continuation/Conversion, in the form of EXHIBIT 2.1(E), in compliance
with the terms set forth below, (ii) except as provided in Section 3.11,
Eurodollar Loans may only be continued or converted into Base Rate Loans
on the last day of the Interest Period applicable thereto, (iii)
Eurodollar Loans may not be continued nor may Base Rate Loans be converted
into Eurodollar Loans during the existence and continuation of a Default
or Event of Default and (iv) any request to continue a Eurodollar Loan
that fails to comply with the terms hereof or any failure to request a
continuation of a Eurodollar Loan at the end of an Interest Period shall
constitute a conversion to a Base Rate Loan on the last day of the
applicable Interest Period. Each continuation or conversion must be
requested by the Borrower no later than 11:00 a.m. (A) on the date for a
requested conversion of a Eurodollar Loan to a Base Rate Loan or (B) three
Business Days prior to the date for a requested continuation of a
Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in
each case pursuant to a written Notice of Continuation/Conversion
submitted to the Administrative Agent which shall set forth (x) whether
the Borrower wishes to continue or convert such Loans and (y) if the
request is to continue a Eurodollar Loan or convert a Base Rate Loan to a
Eurodollar Loan, the Interest Period applicable thereto.
(f) MINIMUM AMOUNTS. Each request for a borrowing, conversion or
continuation shall be subject to the requirements that (i) each Eurodollar
Loan shall be in a minimum amount of $5,000,000 and in integral multiples
of $1,000,000 in excess thereof, (ii) each Base Rate Loan shall be in a
minimum amount of the lesser of $250,000 (and
25
integral multiples of $50,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount and (iii) no more than six
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section, all Eurodollar Loans with the same Interest
Periods shall be considered as one Eurodollar Loan, but Eurodollar Loans
with different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
(g) NOTES. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to each
applicable Lender in the face amount of its Revolving Loan Commitment
Percentage of the Revolving Committed Amount in substantially the form of
EXHIBIT 2.1(G).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require (so long as such terms and
conditions do not impose any financial obligation on or require any Lien
(not otherwise contemplated by this Agreement) to be given by any Credit
Party or conflict with any obligation of, or detract from any action which
may be taken by, any Credit Party or their Subsidiaries under this
Agreement), the Issuing Lender shall from time to time upon request issue
(from the Effective Date to the Revolving Loan Maturity Date and in a form
reasonably acceptable to the Issuing Lender), in Dollars, and the LOC
Participants shall participate in, letters of credit (the "LETTERS OF
CREDIT") for the account of the Borrower or any of its Subsidiaries;
PROVIDED, HOWEVER, that (i) the aggregate amount of LOC Obligations shall
not at any time exceed TEN MILLION DOLLARS ($10,000,000), (ii) the sum of
the aggregate amount of LOC Obligations outstanding plus Revolving Loans
outstanding plus Swing Line Loans outstanding shall not exceed the
Revolving Committed Amount and (iii) with respect to each individual LOC
Participant, the LOC Participant's pro rata share of outstanding Revolving
Loans plus its pro rata share of outstanding LOC Obligations plus its pro
rata share of Swing Line Loans outstanding, if any, shall not exceed such
LOC Participant's Revolving Loan Commitment Percentage of the Revolving
Committed Amount. The issuance and expiry date of each Letter of Credit
shall be a Business Day. Except as otherwise expressly agreed upon by all
the LOC Participants, no Letter of Credit shall have an original expiry
date more than one year from the date of issuance, or as extended, shall
have an expiry date extending beyond the Revolving Loan Maturity Date.
Each Letter of Credit shall be either (x) a standby letter of credit
issued to support the obligations (including pension or insurance
obligations), contingent or otherwise, of the Borrower or any of its
Subsidiaries, or (y) a commercial letter of credit in respect of the
purchase of goods or services by the Borrower or any of its Subsidiaries
in the ordinary course of business. Each Letter of Credit shall comply
with the related LOC Documents.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three Business
Days prior to the requested date of
26
issuance. The Issuing Lender will, at least quarterly and more frequently
upon request, provide to the Administrative Agent for dissemination to the
Lenders a detailed report specifying the Letters of Credit which are then
issued and outstanding and any activity with respect thereto which may
have occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the face amount,
and the expiry date as well as any payments or expirations which may have
occurred. The Issuing Lender will further provide to the Administrative
Agent, promptly upon request, copies of the Letters of Credit and the
other LOC Documents.
(c) PARTICIPATIONS.
(i) Each LOC Participant acknowledges and confirms that
it has a Participation Interest in the liability of the Issuing
Lender under each Existing Letter of Credit in an amount equal to
its Revolving Loan Commitment Percentage of such Existing Letters of
Credit. Each Existing Letter of Credit shall be governed by the
terms of this Credit Agreement.
(ii) Each LOC Participant, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
participation from the Issuing Lender in such Letter of Credit and
each LOC Document related thereto and the rights and obligations
arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Revolving Loan Commitment Percentage of
the obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor
and discharge when due, its Revolving Loan Commitment Percentage of
the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each LOC Participant's
participation in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such LOC Participant shall pay
to the Issuing Lender its Revolving Loan Commitment Percentage of
such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation
of each LOC Participant to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence
or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower or any other Credit Party to
reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Revolving Loan at the Adjusted Base Rate in
27
the amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the reimbursement obligations.
The Borrower shall reimburse the Issuing Lender on the day of drawing
under any Letter of Credit either with the proceeds of a Revolving Loan
obtained hereunder or otherwise in same day funds as provided herein or in
the LOC Documents. If the Borrower shall fail to reimburse the Issuing
Lender as provided hereinabove, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base Rate plus the
Applicable Percentage for the Base Rate Loans that are Revolving Loans
plus two percent (2%). The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective
of (but without waiver of) any rights of set-off, counterclaim or defense
to payment the applicable account party or the Borrower may claim or have
against the Issuing Lender, the Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without
limitation, any defense based on any failure of the applicable account
party, the Borrower or any other Credit Party to receive consideration or
the legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the LOC Participants of
the amount of any unreimbursed drawing and each LOC Participant shall
promptly pay to the Administrative Agent for the account of the Issuing
Lender, in Dollars and in immediately available funds, the amount of such
LOC Participant's Revolving Loan Commitment Percentage of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received
at or before 2:00 p.m., otherwise such payment shall be made at or before
12:00 Noon on the Business Day next succeeding the day such notice is
received. If such LOC Participant does not pay such amount to the Issuing
Lender in full upon such request, such LOC Participant shall, on demand,
pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date the LOC
Participant received the notice regarding the unreimbursed drawing until
such LOC Participant pays such amount to the Issuing Lender in full at a
rate per annum equal to, if paid within two Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate. Each LOC Participant's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a LOC
Participant to the Issuing Lender, such LOC Participant shall,
automatically and without any further action on the part of the Issuing
Lender or such LOC Participant, acquire a participation in an amount equal
to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower and the
other Credit Parties with respect thereto.
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(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
borrowing to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the applicable Lenders that a
Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised solely of Base Rate Loans (each such borrowing, a "MANDATORY
BORROWING") shall be immediately made from all applicable Lenders (without
giving effect to any termination of the Commitments pursuant to Section
9.2) PRO RATA based on each Lender's respective Revolving Loan Commitment
Percentage and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each such Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon
any such request or deemed request on account of each such Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date NOTWITHSTANDING (i) the amount of
Mandatory Borrowing may not comply with the minimum amount for borrowings
of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5 are then satisfied, (iii) whether a
Default or Event of Default then exists, (iv) failure of any such request
or deemed request for Revolving Loans to be made by the time otherwise
required hereunder, (v) the date of such Mandatory Borrowing, or (vi) any
reduction in the Revolving Committed Amount or any termination of the
Commitments. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party),
then each such Lender hereby agrees that it shall forthwith fund (as of
the date the Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date
and prior to such purchase) its Participation Interest in the outstanding
LOC Obligations; PROVIDED, FURTHER, that in the event any Lender shall
fail to fund its Participation Interest on the day the Mandatory Borrowing
would otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing
Lender upon demand, at the rate equal to, if paid within two Business Days
of such date, the Federal Funds Rate, and thereafter at a rate equal to
the Base Rate.
(f) MODIFICATION AND EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (Publication No. 500 or the most recent
publication, the "UCP"), in which case the UCP may be incorporated therein
and deemed in all respects to be a part thereof.
29
(h) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood and
agreed as between the Lenders that the obligations of the Issuing Lender
hereunder to the LOC Participants are only those expressly set forth in
this Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any LOC Participant to recover from the Issuing Lender any
amounts made available by such LOC Participant to the Issuing Lender
pursuant to this Section 2.2 in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
(i) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit Agreement
shall govern.
(j) INDEMNIFICATION OF ISSUING LENDER.
(i) In addition to its other obligations under this
Credit Agreement, the Borrower hereby agrees to protect, indemnify,
pay and save the Issuing Lender harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"GOVERNMENT ACTS").
(ii) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. The Issuing Lender
shall not be responsible for (except in the case of (A), (B) and (C)
below if the Issuing Lender has actual knowledge to the contrary):
(A) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C)
failure of the beneficiary of a Letter of Credit to comply fully
with conditions required in order to draw upon a Letter of Credit;
(D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in
30
interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make
a drawing under a Letter of Credit or of the proceeds thereof; and
(G) any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts.
None of the above shall affect, impair, or prevent the vesting of
the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken
or omitted by the Issuing Lender, under or in connection with any
Letter of Credit or the related certificates, if taken or omitted in
good faith, shall not put the Issuing Lender under any resulting
liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future
Government Acts. The Issuing Lender shall not, in any way, be liable
for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (j) is intended to limit
the reimbursement obligation of the Borrower contained in this
Section 2.2. The obligations of the Borrower under this subsection
(j) shall survive the termination of this Credit Agreement. No act
or omission of any current or prior beneficiary of a Letter of
Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained
in this subsection (j), the Borrower shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by
the Issuing Lender arising solely out of the gross negligence or
willful misconduct of the Issuing Lender, as determined by a court
of competent jurisdiction. Nothing in this Agreement shall relieve
the Issuing Lender of any liability to the Borrower in respect of
any action taken by the Issuing Lender which action constitutes
gross negligence or willful misconduct of the Issuing Lender or a
violation of the UCP or Uniform Commercial Code (as applicable), as
determined by a court of competent jurisdiction.
2.3 SWING LINE LOANS SUBFACILITY.
(a) SWING LINE LOANS. Subject to the terms and conditions set forth
herein, Xxxxxxx agrees to make loans to the Borrower, in Dollars, at any
time and from time to time during the period from and including the
Effective Date to but not including the Revolving
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Loan Maturity Date (or such earlier date if the Revolving Committed Amount
has been terminated as provided herein) in such aggregate amount as the
Borrower may request (each such loan, a "Swing Line Loan" and
collectively, the "Swing Line Loans"); PROVIDED, HOWEVER, that (i) the
aggregate principal amount of the Swing Line Loans outstanding at any one
time shall not exceed the Swing Line Committed Amount and (ii) the sum of
the aggregate principal amount of Swing Line Loans outstanding plus the
aggregate principal amount of Revolving Loans outstanding plus the
aggregate amount of LOC Obligations outstanding shall not exceed the
lesser of (x) the Revolving Committed Amount and (y) the Borrowing Base
Assets. Prior to the Revolving Loan Maturity Date, Swing Line Loans may be
repaid and reborrowed by the Borrower in accordance with the provisions
hereof.
(b) METHOD OF BORROWING AND FUNDING OF SWING LINE LOANS. The
Borrower may obtain a Swing Line Loan on any Business Day by accessing its
operating checking account at Xxxxxxx (the "Swing Line Account"). Any time
the Borrower obtains a Swing Line Loan hereunder, the Borrower shall be
deemed to have made a representation and warranty to the Lenders as to the
correctness of the matters specified in subsections (b), (c), (d) and (e)
of Section 5.2. Xxxxxxx shall block the Borrower's access to the Swing
Line Account any time the conditions in subsections (b), (c), (d) or (e)
of Section 5.2 are not true and correct.
(c) REPAYMENT AND PARTICIPATIONS OF SWING LINE LOANS. The Borrower
agrees to repay all Swing Line Loans then outstanding within one Business
Day of demand therefor by Xxxxxxx, which may be accomplished by requesting
a Revolving Loan. In the event that the Borrower shall fail to repay any
Swing Line Loan within three Business Days after demand therefor by
Xxxxxxx, and in any event upon (i) a request by Xxxxxxx, (ii) the
occurrence of an Event of Default described in Section 9.1(f) or (iii) the
acceleration of any Loan or termination of the Revolving Committed Amount
pursuant to Section 9.2, each other Lender shall irrevocably and
unconditionally purchase from Xxxxxxx, without recourse or warranty, an
undivided interest and participation in such Swing Line Loan in an amount
equal to such other Lender's Revolving Loan Commitment Percentage thereof,
by directly purchasing a participation in such Swing Line Loan in such
amount (regardless of whether or not (A) the conditions precedent set
forth in Section 5.2 are then satisfied, (B) the Revolving Committed
Amount has been terminated, (C) a Default or any Event of Default exists
or (D) the Loans have been accelerated) and paying the proceeds thereof to
Xxxxxxx at the address provided in Section 11.1, or at such other address
as Xxxxxxx may designate, in lawful money of the United States of America
and in immediately available funds. If such amount is not in fact made
available to Xxxxxxx by any Lender, Xxxxxxx shall be entitled to recover
such amount on demand from such Lender, together with accrued interest
thereon for each day from the date of demand thereof, at the Federal Funds
Rate. If such Lender does not pay such amount forthwith upon Xxxxxxx'x
demand therefor, and until such time as such Lender makes the required
payment, Xxxxxxx shall be deemed to continue to have outstanding Swing
Line Loans in the amount of such unpaid participation obligation for all
purposes of the Credit Documents other than those provisions requiring the
other Lenders to
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purchase a participation therein. Further, such Lender shall be deemed to
have assigned any and all payments made of principal and interest on its
Loans, amounts due with respect to its Letters of Credit (or its
participations therein) and any other amounts due to it hereunder to
Xxxxxxx to repay Swing Line Loans in the amount of the participation in
Swing Line Loans that such Lender failed to purchase pursuant to this
Section 2.3(c) until such amount has been purchased (as a result of such
assignment or otherwise).
(d) SWING LINE NOTE. The Swing Line Loans made by Xxxxxxx shall be
evidenced by a duly executed promissory note of the Borrower to Xxxxxxx in
the face amount of the Swing Line Committed Amount in substantially the
form of Exhibit 2.3(d).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 INTEREST.
(a) INTEREST RATE. All Base Rate Loans and all Swing Line Loans
shall accrue interest at the Adjusted Base Rate and all Eurodollar Loans
shall accrue interest at the Adjusted Eurodollar Rate.
(b) DEFAULT RATE OF INTEREST. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand, at a
per annum rate equal to two percent (2%) plus the rate which would
otherwise be applicable (or if no rate is applicable, then the rate for
Revolving Loans that are Base Rate Loans plus two percent (2%) per annum).
(c) INTEREST PAYMENTS. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls
on a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding day.
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3.2 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest, fees, expenses and other amounts to
be made by a Credit Party under this Agreement shall be received not later than
2:00 p.m. on the date when due, in Dollars and in immediately available funds,
by the Administrative Agent (or with respect to Swing Line Loans by Xxxxxxx) at
its offices in Tampa, Florida. Payments received after such time shall be deemed
to have been received on the next Business Day. The Borrower shall, at the time
it makes any payment (other than a repayment of Swing Line Loans) under this
Agreement, specify to the Administrative Agent, the Loans, Letters of Credit,
fees or other amounts payable by the Borrower hereunder to which such payment is
to be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall,
subject to Section 3.7, distribute such payment to the Lenders in such manner as
the Administrative Agent may deem appropriate). The Administrative Agent will
distribute such payments to the applicable Lenders if any such payment is
received prior to 2:00 p.m.; otherwise the Administrative Agent will distribute
such payment to the applicable Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and fees for the period of such
extension), except that in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day.
3.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be prepaid
on three Business Days' prior written notice to the Administrative Agent
and any prepayment of Eurodollar Loans will be subject to Section 3.14 and
(ii) each such partial prepayment of Loans (other than Swing Line Loans)
shall be in the minimum principal amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time the sum of
the aggregate amount of Revolving Loans outstanding plus LOC
Obligations outstanding plus Swing Line Loans outstanding exceeds
the lesser of (x) the Revolving Committed Amount and (y) the
Borrowing Base Assets, the Borrower shall immediately make a
principal payment to the Administrative Agent in the manner and in
an amount necessary to be in compliance with Section 2.1.
(ii) ASSET DISPOSITIONS. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any Asset
Disposition, (A) from the Closing Date until the date the Revolving
Committed Amount is less than or equal to $210
34
million, the Borrower shall forward 100% of the Net Cash Proceeds of
such Asset Disposition to the Lenders as a prepayment of the Loans
(to be applied as set forth in Section 3.3(c) below) and (B)
subsequent to the date the Revolving Committed Amount is reduced to
$210 million or less, the Borrower shall forward 50% of the Net Cash
Proceeds of such Asset Disposition to the Lenders as a prepayment of
the Loans (to be applied as set forth in Section 3.3(c) below);
provided, however, the Borrower shall forward 100% of the Net Cash
Proceeds from any Asset Disposition involving the sale of a store
(other than an unfinished store that is not operating) or the
sale/leaseback of a store location to the Lenders as a prepayment of
the Loans (to be applied as set forth in Section 3.3(c) below).
(iii) ISSUANCES OF DEBT. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any Debt
Issuance, the Borrower shall forward 100% of the Net Cash Proceeds
of such Debt Issuance to the Lenders as a prepayment of the Loans
(to be applied as set forth in Section 3.3(c) below).
(iv) ISSUANCES OF EQUITY. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any Equity
Issuance, the Borrower shall forward 100% of the Net Cash Proceeds
of such Equity Issuance to the Lenders as a prepayment of the Loans
(to be applied as set forth in Section 3.3(c) below).
(c) APPLICATION OF PREPAYMENTS. All amounts required to be paid
pursuant to Section 3.3(b)(i) shall be applied FIRST to Revolving Loans,
SECOND to Swing Line Loans and THIRD to a cash collateral account in
respect of LOC Obligations. All amounts required to be paid pursuant to
Section 3.3(b)(ii) shall be applied FIRST to Revolving Loans (with a
corresponding reduction in the Revolving Committed Amount (other than
those amounts received in connection with the refinancing of the
Refinanced Properties for which no reduction shall be required)), SECOND
to Swing Line Loans and THIRD to a cash collateral account in respect of
LOC Obligations. All amounts required to be paid pursuant to Section
3.3(b)(iii) shall be applied FIRST to Revolving Loans and SECOND to Swing
Line Loans (in each case with a corresponding reduction in the Revolving
Committed Amount), and THIRD to a cash collateral account in respect of
LOC Obligations. All amounts required to be paid pursuant to Section
3.3(b)(iv) shall be applied FIRST to Revolving Loans and SECOND to Swing
Line Loans (in each case with a reduction in the Revolving Committed
Amount of 50% of such amounts), and THIRD to a cash collateral account in
respect of LOC Obligations. Any permanent reductions in the Revolving
Committed Amount pursuant to this Section 3.3(c) shall occur solely in
multiples of $1,000,000. Within the parameters of the application set
forth above, prepayments, to the extent applicable, shall be applied first
to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All prepayments hereunder shall be subject to
Section 3.14.
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3.4 FEES.
(a) COMMITMENT FEES. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrower agrees
to pay to the Administrative Agent, for the pro rata benefit of each
applicable Lender (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount), a fee equal to the
Commitment Fee Percentage on the Unused Commitment (the "COMMITMENT
FEES"). The accrued Commitment Fees shall commence to accrue on the
Effective Date and shall be due and payable in arrears on each January 1,
April 1, July 1 and October 1 (as well as on the Revolving Loan Maturity
Date and on any date that the Revolving Committed Amount is reduced) for
the immediately preceding fiscal quarter (or portion thereof), beginning
with the first of such dates to occur after the Closing Date.
(b) LETTER OF CREDIT FEES.
(i) LETTER OF CREDIT FEE. In consideration of the issuance of
Letters of Credit hereunder, the Borrower agrees to pay to the
Issuing Lender for the pro rata benefit of the applicable Lenders
(based on each Lender's Revolving Loan Commitment Percentage of the
Revolving Committed Amount), a fee (the "LETTER OF CREDIT FEE")
equal to the Applicable Percentage for the Letter of Credit Fee on
the average daily maximum amount available to be drawn under each
such Letter of Credit from the date of issuance to the date of
expiration. The Letter of Credit Fee will be payable in arrears on
each January 1, April 1, July 1 and October 1 (as well as on the
Revolving Loan Maturity Date) for the immediately preceding fiscal
quarter (or portion thereof), beginning with the first of such dates
to occur after the Closing Date.
(ii) ISSUING LENDER FEES. In addition to the Letter of Credit
Fees payable pursuant to subsection (i) above, the Borrower shall
pay to the Issuing Lender for its own account, without sharing by
the other Lenders, (A) a fee equal to one-fourth of one percent
(.25%) per annum on the total sum of all Letters of Credit issued by
the Issuing Lender, such fee to be paid quarterly in arrears 15 days
after the end of each fiscal quarter of the Borrower (as well as on
the Revolving Loan Maturity Date) and (B) the customary charges from
time to time to the Issuing Lender for its services in connection
with the issuance, amendment, payment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "ISSUING LENDER FEES").
(c) ADMINISTRATIVE FEES. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrower and the Administrative Agent in the Fee Letter.
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3.5 PAYMENT IN FULL AT MATURITY.
On the Revolving Loan Maturity Date, the entire outstanding principal
balance of all Revolving Loans, all Swing Line Loans and all LOC Obligations,
together with accrued but unpaid interest and all other sums owing with respect
thereto, shall be due and payable in full, unless accelerated sooner pursuant to
Section 9.
3.6 COMPUTATIONS OF INTEREST AND FEES.
(a) All computations of interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Borrower are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any event
or contingency (including but not limited to prepayment or acceleration of
the maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement, under
the Notes or otherwise, exceed the maximum nonusurious amount permissible
under applicable law. If, from any possible construction of any of the
Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction
shall be subject to the provisions of this paragraph and such documents
shall be automatically reduced to the maximum nonusurious amount permitted
under applicable law, without the necessity of execution of any amendment
or new document. If any Lender shall ever receive anything of value which
is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
indebtedness evidenced by any of the Credit Documents does not include the
right to receive any interest which has not otherwise accrued on the date
of such demand, and the Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or agreed
to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of
the Loans so that the amount of interest on account of such indebtedness
does not exceed the maximum nonusurious amount permitted by applicable
law.
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3.7 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each payment or prepayment of
principal of any Loan (other than Swing Line Loans), each payment of fees
(other than the Issuing Lender Fees retained by the Issuing Lender for its
own account and the Administrative Fees retained by the Administrative
Agent for its own account), each reduction of the Revolving Committed
Amount, and each conversion or continuation of any Loan, shall (except as
otherwise provided in Section 3.11) be allocated pro rata among the
relevant Lenders in accordance with the respective Revolving Loan
Commitment Percentages of such Lenders (or, if the Commitments of such
Lenders have expired or been terminated, in accordance with the respective
principal amounts of the outstanding Loans and Participation Interests of
such Lenders); PROVIDED that, if any Lender shall have failed to pay its
applicable pro rata share of any Revolving Loan, then any amount to which
such Lender would otherwise be entitled pursuant to this subsection (a)
shall instead be payable to the Administrative Agent until the share of
such Loan not funded by such Lender has been repaid; PROVIDED FURTHER,
that in the event any amount paid to any Lender pursuant to this
subsection (a) is rescinded or must otherwise be returned by the
Administrative Agent, each Lender shall, upon the request of the
Administrative Agent, repay to the Administrative Agent the amount so paid
to such Lender, with interest for the period commencing on the date such
payment is returned by the Administrative Agent until the date the
Administrative Agent receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after such
request, the Federal Funds Rate, and thereafter, the Base Rate PLUS two
percent (2%) per annum; and
(b) LETTERS OF CREDIT. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each LOC Participant pro
rata in accordance with its Revolving Loan Commitment Percentage; PROVIDED
that, if any LOC Participant shall have failed to pay its applicable pro
rata share of any drawing under any Letter of Credit, then any amount to
which such LOC Participant would otherwise be entitled pursuant to this
subsection (b) shall instead be payable to the Issuing Lender until the
share of such unreimbursed drawing not funded by such Lender has been
repaid; PROVIDED FURTHER, that in the event any amount paid to any LOC
Participant pursuant to this subsection (b) is rescinded or must otherwise
be returned by the Issuing Lender, each LOC Participant shall, upon the
request of the Issuing Lender, repay to the Administrative Agent for the
account of the Issuing Lender the amount so paid to such LOC Participant,
with interest for the period commencing on the date such payment is
returned by the Issuing Lender until the date the Issuing Lender receives
such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal Funds
Rate, and thereafter, the Base Rate PLUS two percent (2%) per annum.
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3.8 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan (other than a Swing Line Loan), unreimbursed drawing with respect to
any LOC Obligations or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans, LOC Obligations, and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan, LOC Obligation or other
obligation in the amount of such participation. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or an Agent shall fail to remit
to an Agent or any other Lender an amount payable by such Lender or such Agent
to such Agent or such other Lender pursuant to this Credit Agreement on the date
when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to such Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.
3.9 CAPITAL ADEQUACY.
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency,
39
has or would have the effect of reducing the rate of return on such Lender's (or
parent corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender, or its parent
corporation, could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's (or parent corporation's)
policies with respect to capital adequacy), then, upon notice from such Lender
to the Borrower, the Borrower shall be obligated to pay to such Lender such
additional amount or amounts as will compensate such Lender on an after-tax
basis (after taking into account applicable deductions and credits in respect of
the amount indemnified) for such reduction. Each determination by any such
Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.10 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Administrative Agent
shall have determined in good faith (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter, and will also give prompt written notice to the Borrower
when such conditions no longer exist. If such notice is given (a) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (b) any Loans that were to have been converted on the
first day of such Interest Period to or continued as Eurodollar Loans shall be
converted to or continued as Base Rate Loans and (c) any outstanding Eurodollar
Loans shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
3.11 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last
40
day of the then current Interest Period with respect thereto, the Borrower shall
pay to such Lender such amounts, if any, as may be required pursuant to Section
3.14.
3.12 REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit, any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 3.13 (including Non-Excluded Taxes imposed solely by
reason of any failure of such Lender to comply with its obligations under
Section 3.13(b)) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net income
tax), of such Lender or its applicable lending office, branch, or any
affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through an Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
increased cost or reduced amount receivable, PROVIDED that, in any such case,
the Borrower may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one
Business Day's notice of such election, in which case the Borrower shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.14. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 3.12, it shall provide
prompt notice thereof to the Borrower, through the Administrative Agent,
certifying (x) that one of the events described in this
41
Section 3.12 has occurred and describing in reasonable detail the nature of such
event, (y) as to the increased cost or reduced amount resulting from such event
and (z) as to the additional amount demanded by such Lender and a reasonably
detailed explanation of the calculation thereof. Such a certificate as to any
additional amounts payable pursuant to this Section 3.12 submitted by such
Lender, through the Administrative Agent, to the Borrower shall be conclusive
and binding on the parties hereto in the absence of manifest error. This
covenant shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
3.13 TAXES.
(a) Except as provided below in this Section 3.13, all payments made
by the Borrower under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured by
or imposed upon the overall net income of any Lender or its applicable
lending office, or any branch or affiliate thereof, and all franchise
taxes, branch taxes, taxes on doing business or taxes on the overall
capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net
income taxes: (i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is located,
or in which its principal executive office is located, or any nation
within which such jurisdiction is located or any political subdivision
thereof; or (ii) by reason of any connection between the jurisdiction
imposing such tax and such Lender, applicable lending office, branch or
affiliate other than a connection arising solely from such Lender having
executed, delivered or performed its obligations, or received payment
under or enforced, this Credit Agreement or any Notes. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to an Agent or any Lender hereunder or under any Notes,
(A) the amounts so payable to an Agent or such Lender shall be increased
to the extent necessary to yield to an Agent or such Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Credit
Agreement and any Notes, PROVIDED, HOWEVER, that the Borrower shall be
entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state
thereof if such Lender fails to comply with the requirements of paragraph
(b) of this Section 3.13 whenever any Non-Excluded Taxes are payable by
the Borrower, and (B) as promptly as possible after requested the Borrower
shall send to such Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall
indemnify the Agents
42
and any Lender for any incremental taxes, interest or penalties that may
become payable by an Agent or any Lender as a result of any such failure.
The agreements in this subsection shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i)(A) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Administrative Agent (x) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it is
entitled to receive payments under this Credit Agreement and any
Notes without deduction or withholding of any United States federal
income taxes and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding tax;
(B) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(ii) in the case of any such Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (A) represent to the Borrower (for the benefit of the Borrower
and the Agents) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to furnish to
the Borrower, on or before the date of any payment by the Borrower,
with a copy to the Administrative Agent, two accurate and complete
original signed copies of Internal Revenue Service Form W-8, or
successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from
U.S. withholding tax under the provisions of Section 881(c) of the
Internal Revenue Code with respect to payments to be made under this
Credit Agreement and any Notes (and to deliver to the Borrower and
the Administrative Agent two further copies of such form on or
before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for
filing and completing
43
such forms), and (C) agree, to the extent legally entitled to do so,
upon reasonable request by the Borrower, to provide to the Borrower
(for the benefit of the Borrower and the Agents) such other forms as
may be reasonably required in order to establish the legal
entitlement of such Lender to an exemption from withholding with
respect to payments under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 11.3
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required pursuant
to this subsection (b); PROVIDED that in the case of a participant of a
Lender, the obligations of such participant of a Lender pursuant to this
subsection (b) shall be determined as if the participant of a Lender were
a Lender except that such participant of a Lender shall furnish all such
required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
(c) In connection with this transaction there may or may not be due
certain documentary stamp taxes and/or intangible taxes imposed by the
State of Florida (the "Florida Taxes"). In addition to (and not in
limitation of) the indemnification with respect to tax liabilities set
forth above, the Borrower agrees to indemnify the Agents and each Lender,
their directors, officers, agents and employees from and against any and
all liability, damage, loss, cost, expense or reasonable attorney fees
which may accrue to or be sustained by an Agent, a Lender or their
directors, officers, agents or employees on account of or arising from any
claim or action raised by, filed or brought by or in the name of any
Florida governmental or administrative department with respect to
non-payment of the Florida Taxes against an Agent, a Lender, or any of
their directors, officers, agents or employees.
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3.14 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) minus
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender, each Affiliate of Lender
that enters into a Hedging Agreement and the Agents the prompt payment of the
Credit Party Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). The Guarantors
additionally, jointly and severally, unconditionally guarantee to each Lender,
each Affiliate of a Lender that enters into a Hedging Agreement and the Agents
the timely performance of all other obligations under the Credit Documents and
the Hedging Agreements. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or the Hedging Agreements, or any
other agreement or instrument referred to therein, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might
45
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor. Each Guarantor agrees that this Guaranty may be enforced by the
Lenders without the necessity at any time of resorting to or exhausting any
other security or collateral and without the necessity at any time of having
recourse to the Notes or any other of the Credit Documents or any collateral, if
any, hereafter securing the Credit Party Obligations or otherwise and each
Guarantor hereby waives the right to require the Lenders to proceed against the
Borrower or any other Person (including a co-guarantor) or to require the
Lenders to pursue any other remedy or enforce any other right. Each Guarantor
further agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of the
Credit Party Obligations for amounts paid under this Guaranty until such time as
the Lenders (and any Affiliates of Lenders entering into Hedging Agreements)
have been paid in full, all Commitments under the Credit Agreement have been
terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Lenders in connection with
monies received under the Credit Documents. Each Guarantor further agrees that
nothing contained herein shall prevent the Lenders from suing on the Notes or
any of the other Credit Documents or any of the Hedging Agreements or
foreclosing its security interest in or Lien on any collateral, if any, securing
the Credit Party Obligations or from exercising any other rights available to it
under this Credit Agreement, the Notes, any other of the Credit Documents, or
any other instrument of security, if any, and the exercise of any of the
aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of any of any Guarantor's obligations hereunder; it being
the purpose and intent of each Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances. Neither
any Guarantor's obligations under this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Borrower or by reason of the bankruptcy or insolvency of
the Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by any Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agents and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee.
4.3 MODIFICATIONS.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
46
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 WAIVER OF RIGHTS.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agents and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by an Agent
or such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
4.6 REMEDIES.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Agents and the Lenders, on the other hand, the Credit Party Obligations may
be declared to be forthwith due and payable as provided in Section 9 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Section 9) notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Credit Party Obligations from
47
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or such Credit Party Obligations being deemed to
have become automatically due and payable), such Credit Party Obligations
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the Guarantors. The Guarantors acknowledge and agree that their
obligations hereunder are secured in accordance with the terms of the Security
Agreements and the other Collateral Documents and that the Lenders may exercise
their remedies thereunder in accordance with the terms thereof.
4.7 LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in any
of the other Credit Documents, to the extent the obligations of any Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 5
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and make
the initial Extension of Credit is subject to satisfaction of the following
conditions:
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agents of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii) the
Collateral Documents and (iv) all other Credit Documents, each in form and
substance reasonably acceptable to the Agents in their sole discretion.
(b) CORPORATE DOCUMENTS. Receipt by the Agents of the following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of each
Credit Party certified to be true and complete as of a recent date
by the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Effective Date.
(ii) BYLAWS. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Effective Date.
48
(iii) RESOLUTIONS. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Effective Date.
(iv) GOOD STANDING. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing would have a Material Adverse Effect on the business
or operations of a Credit Party in such jurisdiction and (B) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true and
correct as of the Effective Date.
(c) FINANCIAL STATEMENTS. Receipt by the Agents and the Lenders of
(i) the consolidated financial statements of the Credit Parties for the
year ending January 31, 1997, including balance sheets and income and cash
flow statements audited by Deloitte & Touche LLP and containing an
unqualified opinion of such firm that such statements present fairly, in
all material respects, the consolidated financial position and results of
operations of the Credit Parties, and are prepared in conformity with GAAP
and (ii) monthly financial statements prepared by the Borrower for
February 1997, March 1997 and April 1997.
(d) OPINION OF COUNSEL. Receipt by the Agents of an opinion, or
opinions (which shall cover, among other things, authority, legality,
validity, binding effect, enforceability and attachment and perfection of
liens), reasonably satisfactory to the Agents, addressed to the Agents on
behalf of the Lenders and dated as of the Effective Date, from legal
counsel to the Credit Parties.
(e) EXAMINATION. Receipt by the Agents of an independent
examination, in form and substance reasonably satisfactory to the Agents,
of the inventory controls and related systems of the Credit Parties.
(f) PERSONAL PROPERTY COLLATERAL. The Collateral Agent shall have
received, in form and substance reasonably satisfactory to the Collateral
Agent:
(i) searches of Uniform Commercial Code ("UCC") filings
in the jurisdiction of the chief executive office of each Credit
Party and each jurisdiction
49
where any Collateral is located or where a filing would need to be
made in order to perfect the Lenders' security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted
Liens;
(ii) to the extent not previously received by the
Collateral Agent, duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Collateral Agent's
sole discretion, to perfect the Lenders' security interest in the
Collateral;
(iii) to the extent not previously received by the
Collateral Agent, searches of ownership of intellectual property in
the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Collateral
Agent in order to perfect the Collateral Agent's security interest
in the Collateral;
(iv) to the extent not previously received by the
Collateral Agent, all stock certificates evidencing the stock
pledged to the Collateral Agent pursuant to the Pledge Agreements,
together with duly executed in blank undated stock powers attached
thereto;
(v) to the extent not previously received by the
Collateral Agent, all instruments and chattel paper in the
possession of a Credit Party, as required by the Security
Agreements, together with allonges or assignments as may be
necessary or appropriate to perfect the Lenders' security interest
in the Collateral; and
(vi) at the request of the Collateral Agent, copies of
the Assigned Agreements (as defined in the Security Agreement),
together with assignments and third party consents as may be
necessary or appropriate to perfect the Lenders' security interest
in such Assigned Agreements.
(g) REAL PROPERTY COLLATERAL. The Collateral Agent shall have
received, in form and substance reasonably satisfactory to the Collateral
Agent:
(i) to the extent not previously received by the
Collateral Agent, fully executed and notarized mortgages, deeds of
trust or deeds to secure debt in registerable form (as previously
modified or amended and as may be further modified or amended from
time to time, each a "MORTGAGE" and collectively the "MORTGAGES"),
or modifications of such Mortgages delivered in connection with the
Existing Credit Agreement, in each case encumbering the fee interest
(whether legal, equitable or otherwise) of the Credit Parties in
each real property asset owned by a Credit Party set forth on
SCHEDULE 5.1(G) (each a "MORTGAGED PROPERTY" and collectively the
"MORTGAGED Properties"), together with such UCC-1 or UCC-3
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financing statements (or equivalent instruments) as the Collateral
Agent shall deem appropriate with respect to each such Mortgaged
Property;
(ii) to the extent not previously received by the
Collateral Agent, fully executed and notarized mortgages, deeds of
trust or deeds to secure debt in registerable form (as previously
modified or amended and as may be further modified or amended from
time to time, each a "LEASEHOLD MORTGAGE" and collectively the
"LEASEHOLD MORTGAGES"), or modifications of such Leasehold Mortgages
delivered in connection with the Existing Credit Agreement, in each
case encumbering the leasehold interest of any of the Credit Parties
in each leasehold estate set forth on SCHEDULE 5.1(G) (each a
"LEASEHOLD MORTGAGED PROPERTY" and collectively the "LEASEHOLD
MORTGAGED PROPERTIES"), together with such UCC-1 or UCC-3 financing
statements (or equivalent instruments) as the Collateral Agent shall
deem appropriate with respect to such Leasehold Mortgaged Properties
and evidence that each leasehold estate set forth on SCHEDULE 5.1(G)
is in the name of a Credit Party; provided that the Collateral Agent
shall not file any Leasehold Mortgage unless (A) the consent of the
landlord to such Leasehold Mortgaged Property has been received or
(B) it would not violate the lease applicable to such Leasehold
Mortgage;
(iii) an opinion of counsel in the state in which each
Mortgaged Property and Leasehold Mortgaged Property is located with
respect to the enforceability of the form of Mortgage or Leasehold
Mortgage (or the modifications thereto, as applicable), as
applicable, and sufficiency of the form of UCC-1 and/or UCC-3
financing statements (or equivalent instruments) to be recorded or
filed in such state and such other matters as the Collateral Agent
may request, in form and substance reasonably satisfactory to the
Collateral Agent; and
(iv) ALTA or other appropriate form mortgagee title
insurance policies (the "MORTGAGE POLICIES") issued by a title
insurer reasonably satisfactory to the Collateral Agent (the "TITLE
INSURANCE COMPANY") or sufficient endorsements to existing title
insurance policies previously issued by the Title Insurance Company,
in amounts reasonably satisfactory to the Collateral Agent with
respect to each Mortgaged Property, assuring the Collateral Agent
that the applicable Mortgages create valid and enforceable first
priority mortgage liens on the respective Mortgaged Properties, free
and clear of all defects and encumbrances except Permitted Liens,
which Mortgage Policies and endorsements to existing title insurance
policies shall be in form and substance reasonably satisfactory to
the Collateral Agent and containing such endorsements as shall be
reasonably satisfactory to the Collateral Agent and for any other
matters that the Collateral Agent may request, and shall provide
affirmative insurance and such reinsurance as the Collateral Agent
may request, all of the foregoing in form and substance reasonably
satisfactory to the Agents.
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(v) to the extent not previously received by the
Collateral Agent, environmental assessment reports and related
documents with respect to all Mortgaged Properties.
(vi) to the extent not previously received by the
Collateral Agent, maps or plats of an as-built survey of the sites
of the Mortgaged Properties certified to the Collateral Agent and
the Title Insurance Company in a manner reasonably satisfactory to
them, dated a date satisfactory to the Collateral Agent and the
Title Insurance Company by an independent professional licensed land
surveyor reasonably satisfactory to the Collateral Agent and the
Title Insurance Company, which maps or plats and the surveys on
which they are based shall be sufficient to delete any standard
printed survey exception contained in the applicable title policy
and be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted
by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality
of the foregoing, there shall be surveyed and shown on such maps,
plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites; (D)
all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites
or otherwise known to the surveyor; (E) any encroachments on any
adjoining property by the building structures and improvements on
the sites; and (F) if the site is described as being on a filed map,
a legend relating the survey to said map.
(vii) to the extent not previously received by the
Collateral Agent, certification from a registered engineer or land
surveyor or other evidence reasonably acceptable to the Collateral
Agent that none of the improvements on the Mortgaged Properties are
located within any area designated by the Director of the Federal
Emergency Management Agency as a "special flood hazard" area or if
any improvements on the Mortgaged Properties are located within a
"special flood hazard" area, evidence of a flood insurance policy
from a company and in an amount reasonably satisfactory to the
Collateral Agent for the applicable portion of the premises, naming
the Collateral Agent, for the benefit of the Lenders, as mortgagee.
(h) EVIDENCE OF INSURANCE. Receipt by the Agents of copies of
insurance policies or certificates of insurance of the Credit Parties
evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, but not limited to, naming the
Collateral Agent as sole loss payee on behalf of the Lenders.
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(i) MATERIAL ADVERSE EFFECT. There shall not have occurred a change
since January 31,1997 that has had or could reasonably be expected to have
a Material Adverse Effect.
(j) LITIGATION. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Credit Party or any of
their Subsidiaries that would have or would reasonably be expected to have
a Material Adverse Effect.
(k) OFFICER'S CERTIFICATES. The Agents shall have received a
certificate or certificates executed by the chief financial officer of the
Borrower on behalf of the Borrower as of the Effective Date stating that
(i) the Borrower and each of the Borrower's Subsidiaries are in compliance
with all existing material financial obligations, (ii) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
effect the Borrower, any of the Borrower's Subsidiaries or any transaction
contemplated by the Credit Documents, if such action, suit, investigation
or proceeding could have or could be reasonably expected to have a
Material Adverse Effect, (iii) the financial statements and information
delivered pursuant to Section 5.1(c) were prepared in good faith and using
reasonable assumptions and (iv) immediately after giving effect to this
Credit Agreement, the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) the Borrower and each of
the Borrower's Subsidiaries is Solvent, (B) no Default or Event of Default
exists, (C) all representations and warranties contained herein and in the
other Credit Documents are true and correct in all material respects, and
(D) the Credit Parties are in compliance with each of the financial
covenants set forth in Section 7.2.
(l) FEES AND EXPENSES. Payment by the Credit Parties of (i) an
upfront fee of .25% of the Revolving Loan Commitment to be shared pro rata
among the Lenders and (ii) all other fees and expenses owed by them to the
Lenders and the Agents, including, without limitation, payment to the
Agents of the fees set forth in the Fee Letter.
(m) BORROWING BASE REPORT. A Borrowing Base Report in the form of
Exhibit 7.1(c), dated as of May 2, 1997.
(n) OTHER. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely requested
by any Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Borrower and its
Subsidiaries.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
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In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
(a) NOTICE. The Borrower shall have delivered (i) in the case of any
new Revolving Loan, a Notice of Borrowing, duly executed and completed, by
the time specified in Section 2.1 and (ii) in the case of any Letter of
Credit, the Issuing Lender shall have received an appropriate request for
issuance in accordance with the provisions of Section 2.2;
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties in any Credit Document are true and
correct in all material respects at and as if made as of such date except
to the extent they expressly relate to an earlier date;
(c) NO DEFAULT. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto;
(d) NO MATERIAL ADVERSE EFFECT. There shall not have occurred
any Material Adverse Effect; and
(e) AVAILABILITY. Immediately after giving effect to the making of a
Revolving Loan or a Swing Line Loan (and the application of the proceeds
thereof) or to the issuance of a Letter of Credit, as the case may be, the
sum of the Revolving Loans outstanding PLUS Swing Line Loans outstanding
PLUS LOC Obligations outstanding shall not exceed the lesser of (i) the
Revolving Commitment Amount and (ii) the Borrowing Base Assets.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), (d) and (e) above.
54
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agents and each Lender that:
6.1 FINANCIAL CONDITION.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated and consolidating (as applicable)
financial condition, results of operations and cash flows of the Credit Parties
and their Subsidiaries as of such date and for such periods. Since January 28,
1996, there has been no sale, transfer or other disposition by any Credit Party
or any of their Subsidiaries of any material part of the business or property of
the Credit Parties, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Credit Parties, taken as a whole, in each case, which, is not (i) reflected
in the most recent financial statements delivered to the Lenders pursuant to
Section 7.1 or in the notes thereto or (ii) otherwise permitted by the terms of
this Credit Agreement and communicated to the Administrative Agent.
6.2 NO MATERIAL CHANGE.
(a) Since January 31, 1997, there has been no development or event
relating to or affecting a Credit Party or any of their Subsidiaries which
has had or would be reasonably expected to have a Material Adverse Effect
and (b) from and after the Closing Date, except as otherwise permitted
under this Credit Agreement, no dividends or other distributions have been
declared, paid or made upon the capital stock or other equity interest in
a Credit Party or any of its Subsidiaries nor has any of the capital stock
or other equity interest in a Credit Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each Credit Party (a) is a corporation duly incorporated, validly existing
and in good standing under the laws of the State (or other jurisdiction) of its
incorporation, (b) is duly qualified and in good standing as a foreign
corporation and authorized to do business in every jurisdiction unless the
failure to be so qualified, in good standing or authorized would have a Material
Adverse Effect and (c) has the requisite corporate power and authority to own
its properties and to carry on its business as now conducted and as proposed to
be conducted.
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6.4 DUE AUTHORIZATION.
Each Credit Party (a) has the requisite corporate power and authority to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party and to incur the obligations herein and therein
provided for and (b) is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws, (b) violate, contravene or materially conflict with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it may be bound, the violation of which could
have or might be reasonably expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.
6.6 CONSENTS.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.7 ENFORCEABLE OBLIGATIONS.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 NO DEFAULT.
No Credit Party is in default in any respect under any contract, lease,
loan agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by
56
which any of its properties is bound which default would have or would be
reasonably expected to have a Material Adverse Effect. No Default or Event of
Default has occurred or exists except as previously disclosed in writing to the
Lenders.
6.9 OWNERSHIP.
Each Credit Party is the owner of, and has good and marketable title to,
all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.10 INDEBTEDNESS.
The Credit Parties have no Indebtedness except (a) as disclosed in the
financial statements referenced in Section 6.1, (b) as set forth on SCHEDULE
6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, the Borrower or any of its Subsidiaries which could have or
might be reasonably expected to have a Material Adverse Effect. The Borrower has
provided on SCHEDULE 6.11 a complete description of all litigation currently
existing although the Borrower hereby represents to the Lenders that none of
such litigation could have or be reasonably expected to have a Material Adverse
Effect.
6.12 TAXES.
Each Credit Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. No Credit Party
is aware of any proposed tax assessments against it.
6.13 COMPLIANCE WITH LAW.
Each Credit Party is in compliance with all Requirements of Law and all
other laws, rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply would not have or would not be reasonably expected to have a Material
Adverse Effect. No Requirement of Law would be reasonably expected to cause a
Material Adverse Effect.
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6.14 ERISA.
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has
occurred, and, to the best knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any Termination
Event could reasonably be expected to occur, with respect to any Plan;
(ii) no "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not waived,
has occurred with respect to any Plan; (iii) each Plan has been
maintained, operated, and funded in compliance with its own terms and in
material compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" under
each Single Employer Plan (determined within the meaning of Section
401(a)(2) of the Code, utilizing the actuarial assumptions used to fund
such Plans), whether or not vested, did not, as of the last annual
valuation date prior to the date on which this representation is made or
deemed made, exceed the current value of the assets of such Plan allocable
to such accrued liabilities.
(c) Neither the Borrower, nor any of its Subsidiaries nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit Parties,
are reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower,
any of its Subsidiaries nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within the
meaning of Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of
the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or is reasonably
likely to subject the Borrower or any of its Subsidiaries or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower or any of its Subsidiaries or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(e) The present value (determined using actuarial and other
assumptions which are reasonable with respect to the benefits provided and
the employees participating) of the liability of the Borrower and its
Subsidiaries and each ERISA Affiliate for post-retirement
58
welfare benefits to be provided to their current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA), net of all assets under all such Plans allocable to such benefits,
are reflected on the Financial Statements in accordance with FASB 106.
(f) Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code
apply has been administered in compliance in all material respects with
such sections.
6.15 SUBSIDIARIES.
Set forth on SCHEDULE 6.15 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on SCHEDULE 6.15 includes
jurisdiction of incorporation, the number of shares of each class of capital
stock or other equity interests outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such Credit
Party; and the number and effect, if exercised, of all outstanding options,
warrants, rights of conversion or purchase and all other similar rights with
respect thereto. The outstanding capital stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned
by each such Credit Party, directly or indirectly, free and clear of all Liens
(other than those arising under or contemplated in connection with the Credit
Documents). Other than as set forth in SCHEDULE 6.15, neither any Credit Party
nor any Subsidiary thereof has outstanding any securities convertible into or
exchangeable for its capital stock nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its capital stock.
SCHEDULE 6.15 may be updated from time to time by the Borrower by giving written
notice thereof to the Administrative Agent.
6.16 USE OF PROCEEDS; MARGIN STOCK.
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.11. None of the proceeds of the Loans will be used for
the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation G, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or any "margin security" or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of Regulation
U, Regulation X, Regulation G or Regulation T. None of the Credit Parties owns
any "margin stock".
6.17 GOVERNMENT REGULATION.
No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
or the Interstate Commerce Act, each as amended. In addition, no Credit Party is
(a) an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or controlled by
59
such a company, or (b) a "holding company," or a "Subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "Subsidiary"
or a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended. No director, executive officer or principal shareholder
of the Borrower or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve System.
6.18 ENVIRONMENTAL MATTERS.
(a) To the best of Borrower's knowledge, except as set forth on
SCHEDULE 6.18:
(i) Each of the Real Properties and all operations at
the Real Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental
Law with respect to the Real Properties or the businesses operated
by the Borrower or any of its Subsidiaries (the "BUSINESSES"), and
there are no conditions relating to the Businesses or Real
Properties that would be reasonably expected to give rise to
liability under any applicable Environmental Laws.
(ii) No Credit Party has received any written notice of,
or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding Hazardous Materials or compliance with Environmental Laws
with regard to any of the Real Properties or the Businesses, nor
does the Borrower or any of its Subsidiaries have knowledge that any
such notice is being threatened.
(iii) Hazardous Materials have not been transported or
disposed of from the Real Properties, or generated, treated, stored
or disposed of at, on or under any of the Real Properties or any
other location, in each case by, or on behalf or with the permission
of, the Borrower or any of its Subsidiaries in a manner that would
reasonably be expected to give rise to liability under any
applicable Environmental Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower or any of its Subsidiaries, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries
is or will be named as a party, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Borrower or any of
its Subsidiaries, the Real Properties or the Businesses, in any
amount reportable under the federal Comprehensive Environmental
Response,
60
Compensation and Liability Act or any analogous state law, except
releases in compliance with any Environmental Laws.
(v) There has been no release or threat of release of
Hazardous Materials at or from the Real Properties, or arising from
or related to the operations (including, without limitation,
disposal) of the Borrower or any of its Subsidiaries in connection
with the Real Properties or otherwise in connection with the
Businesses.
(vi) None of the Real Properties contains, or has
previously contained, any Hazardous Materials at, on or under the
Real Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise to
liability under, Environmental Laws.
(vii) No Credit Party has assumed any liability of any
Person (other than another Credit Party) under any Environmental
Law.
(b) The Borrower has adopted procedures that are designed to (i)
ensure that each Credit Party, any of its operations and each of the
properties owned or leased by each Credit Party remains in compliance with
applicable Environmental Laws and (ii) minimize any liabilities or
potential liabilities that each Credit Party, any of its operations and
each of the properties owned or leased by each Credit Party may have under
applicable Environmental Laws.
6.19 INTELLECTUAL PROPERTY.
Each Credit Party owns, or has the legal right to use, all trademarks,
tradenames, copyrights, technology, know-how and processes (the "INTELLECTUAL
PROPERTY") necessary for each of them to conduct its business as currently
conducted except for those the failure to own or have such legal right to use
would not have or be reasonably expected to have a Material Adverse Effect. Set
forth on SCHEDULE 6.19 is a list of all Intellectual Property owned by each
Credit Party or that any Credit Party has the right to use. Except as provided
on SCHEDULE 6.19, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Credit
Party know of any such claim, and to the Credit Parties' knowledge the use of
such Intellectual Property by the Borrower or any of their Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that in the aggregate, would not have or be reasonably expected to have a
Material Adverse Effect. SCHEDULE 6.19 may be updated from time to time by the
Borrower by giving written notice thereof to the Administrative Agent.
6.20 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
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6.21 INVESTMENTS.
All Investments of each Credit Party are either Permitted Investments or
otherwise permitted by the terms of this Credit Agreement.
6.22 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 6.22(A) is a list of all Real Properties (and
whether such property is a Mortgaged Property or a Leasehold Mortgaged Property)
with street address, county and state where located, and in the case of each
Leasehold Mortgaged Property, the name of the lessor and lessee, the amount of
the annual rent and the expiration date of the leasehold interest. Set forth on
SCHEDULE 6.22(B) is a list of all locations where any personal property of a
Credit Party is located, including county and state where located. Set forth on
SCHEDULE 6.22(C) is the chief executive office and principal place of business
of each Credit Party. SCHEDULE 6.22(A), 6.22(B) and 6.22(C) may be updated from
time to time by the Borrower by giving written notice thereof to the
Administrative Agent.
6.23 DISCLOSURE.
Neither this Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
6.24 LICENSES, ETC.
The Credit Parties have obtained and hold in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of their respective businesses
as presently conducted, except where the failure to obtain same would not have a
Material Adverse Effect.
6.25 NO BURDENSOME RESTRICTIONS.
No Credit Party is a party to any agreement or instrument or subject to
any other obligation or any charter or corporate restriction or any provision of
any applicable law, rule or regulation which, individually or in the aggregate,
would have or be reasonably expected to have a Material Adverse Effect.
6.26 COLLATERAL DOCUMENTS.
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The Collateral Documents create valid security interests in, and first
mortgage Liens on, the Collateral purported to be covered thereby, which
security interests and mortgage Liens are and will remain perfected security
interests and mortgage Liens, prior to all other Liens other than Permitted
Liens. Each of the representations and warranties made by the Borrower and its
Subsidiaries in the Collateral Documents is true and correct in all material
respects.
6.27 LEASES.
Each of the leases corresponding to the Leasehold Mortgaged Properties set
forth on SCHEDULE 6.22(A) is in full force and effect, and is enforceable in
accordance with its terms.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest and fees and other obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within 90 days after the close of each fiscal year of the Borrower,
a consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated statements of operations and retained earnings and of cash
flows for such fiscal year, setting forth in comparative form consolidated
figures for the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and audited by
independent certified public accountants of recognized national standing
reasonably acceptable to the Agents and whose opinion shall be to the
effect that such financial statements have been prepared in accordance
with GAAP (except for changes with which such accountants concur) and
shall not be limited as to the scope of the audit or qualified in any
manner.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Borrower, (i) a consolidated balance sheet and income statement of the
Borrower and its Subsidiaries, as of the end of such fiscal quarter,
together with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal quarter in each case setting
forth in comparative form consolidated figures for (A) the corresponding
period of the preceding fiscal year and (B) management's proposed budget
for such period, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the Borrower
and its Subsidiaries and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments, (ii) a management discussion and analysis of operating
results for such fiscal quarter; and (iii) financial data on a store by
store basis in a form similar to such data delivered pursuant to the
Existing Credit Agreement.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in any
event within 30 days after the end of each month of the Borrower, (i) a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries as at the end of such month together with related
consolidated statements of operations and retained earnings and of cash
flows for such month in each case setting forth in comparative form
consolidated figures for (A) the corresponding period of the preceding
fiscal year and
63
(B) management's proposed budget for such period, and all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agents, and accompanied by a certificate of
the chief financial officer of the Borrower to the effect that such
monthly financial statements fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end audit adjustments, and (ii) a Borrowing Base Report,
as of the end of the immediately preceding month substantially in the form
of EXHIBIT 7.1(C) and certified by the chief financial officer, controller
or other officer of the Borrower acceptable to the Agents to be true and
correct as of the date thereof.
(d) OFFICER'S CERTIFICATE. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form
of EXHIBIT 7.1(D), (i) demonstrating compliance with Sections 8.1(f), 8.5,
8.6 and 8.7 and with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period, (ii)
demonstrating compliance with the restrictions on the amount of Capital
Expenditures set forth in Section 8.14 and (iii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Borrower proposes to take with respect thereto.
(e) ANNUAL BUSINESS PLAN AND BUDGETS. Within 30 days after the end
of each fiscal year of the Borrower, an annual business plan and budget of
the Borrower and its Subsidiaries on a consolidated basis containing,
among other things, pro forma financial statements for the next two fiscal
years.
(f) COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT Agreement.
Within 90 days after the end of each fiscal year of the Borrower, a
certificate of the chief financial
64
officer of the Borrower containing information regarding the amount of any
Asset Dispositions, Debt Issuances and Equity Issuances that were made
during the prior fiscal year.
(g) ACCOUNTANT'S CERTIFICATE. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have
reviewed Section 7.2 and 7.4 of this Credit Agreement and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default as a result of non-compliance with Section 7.2
or 7.4 of this Credit Agreement and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
(h) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to the Borrower
or any of its Subsidiaries in connection with any annual, interim or
special audit of the books of the Borrower or any of its Subsidiaries.
(i) REPORTS. Promptly upon transmission or receipt thereof, (a)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as the
Borrower or any of its Subsidiaries shall send to its shareholders
generally or to a holder of the Subordinated Debt in its capacity as such
a holder and (b) upon the written request of an Agent, all reports and
written information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety Administration,
or any state or local agency responsible for health and safety matters, or
any successor agencies or authorities concerning environmental, health or
safety matters.
(j) NOTICES. Upon a Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Administrative Agent
immediately of (a) the occurrence of an event or condition consisting of a
Default or Event of Default, specifying the nature and existence thereof
and what action the Borrower proposes to take with respect thereto, and
(b) the occurrence of any of the following with respect to the Borrower or
any of its Subsidiaries: (i) the pendency or commencement of any
litigation, arbitral or governmental proceeding against the Borrower or
any of its Subsidiaries which if adversely determined would have or would
be reasonably expected to have a Material Adverse Effect, or (ii) the
institution of any proceedings against the Borrower or any of its
Subsidiaries with respect to, or the receipt of notice by such Person of
potential liability or responsibility for, the violation or the alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which
would have or would be reasonably expected to have a Material Adverse
Effect.
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(k) ERISA. Upon any of the Credit Parties or any ERISA Affiliate
obtaining knowledge thereof, Borrower will give written notice to the
Administrative Agent and each of the Lenders promptly (and in any event
within five Business Days) of: (i) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a Termination Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrowers or
any of their ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment on
or before the due date (including extensions) thereof of all amounts which
the Borrower or any of its Subsidiaries or ERISA Affiliates is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
have a Material Adverse Effect; together, with a description of any such
event or condition or a copy of any such notice and a statement by the
principal financial officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if
any, which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Borrower
shall furnish the Administrative Agent and each of the Lenders with such
additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form
5500 series), as well as all schedules and attachments thereto required to
be filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA).
(l) ENVIRONMENTAL.
(i) Subsequent to a notice from any Governmental
Authority that would reasonably cause concern or during the
existence of an Event of Default, and upon the written request of an
Agent, the Borrower will furnish or cause to be furnished to the
Administrative Agent, at the Borrower's expense, a report of an
environmental assessment of reasonable scope, form and depth,
including, where appropriate, invasive soil or groundwater sampling,
by a consultant reasonably acceptable to the Agents as to the nature
and extent of the presence of any Hazardous Materials on any
property owned, leased or operated by a Credit Party and as to the
compliance by the Credit Parties with Environmental Laws. If the
Borrower fails to deliver such an environmental report within
seventy-five (75) days after receipt of such written request then
the Agents may arrange for same, and the Borrower hereby grants to
the Agents and their representatives access to the Real Properties
and a license of a scope reasonably necessary to undertake such an
assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment
arranged for by the Agents pursuant to this provision will be
payable by the Borrower on demand and added to the obligations
secured by the Collateral Documents.
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(ii) Each Credit Party will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Hazardous
Materials on, from, or affecting any real property owned or leased
by a Credit Party to the extent necessary to be in compliance with
all Environmental Laws and all other applicable federal, state, and
local laws, regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising jurisdiction
over such real property to the extent any failure would have or be
reasonably expected to have a Material Adverse Effect.
(m) OTHER INFORMATION. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Credit Parties as an Agent may reasonably
request, including, without limitation, appraisals on personal property.
7.2 FINANCIAL COVENANTS.
(a) CASH FLOW COVERAGE RATIO. The Cash Flow Coverage Ratio, as of
the end of each fiscal quarter for the twelve month period ending on such
date, shall be greater than or equal to:
(i) From the Closing Date through and including the
fiscal quarter ending closest to October 31, 1997, 1.2 to 1.0;
(ii) From and including the fiscal quarter ending
closest to January 31, 1998, through and including the fiscal
quarter ending closest to October 31, 1998, 1.35 to 1.0; and
(iii) For the fiscal quarter ending closest to January
31, 1999 and each fiscal quarter thereafter, 1.45 to 1.0.
(b) SENIOR DEBT TO CAPITALIZATION RATIO.
(i) The Senior Debt to Capitalization Ratio, as of the
end of the first, second and fourth fiscal quarter of the Borrower
of each fiscal year of the Borrower, shall be less than or equal to
.55 to 1.0.
(ii) The Senior Debt to Capitalization Ratio, as of the
end of the third fiscal quarter of the Borrower of each fiscal year
of the Borrower, shall be less than or equal to .575 to 1.0.
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(c) NET WORTH. At all times the Net Worth shall be greater than or
equal to the sum of (i) $142,000,000 plus (ii) 75% of Net Income (as
calculated at the end of each fiscal quarter of the Borrower beginning
with the fiscal quarter ending closest to July 31, 1996 and for each
fiscal quarter thereafter, on a cumulative basis, and without deduction
for any net losses) plus (iii) 100% of Net Cash Proceeds from an Equity
Issuance.
(d) BORROWING BASE ASSETS. At all times the amount of Borrowing Base
Assets must be greater than or equal to the sum of the aggregate amount of
Revolving Loans outstanding plus the aggregate amount of Swing Line Loans
outstanding plus the aggregate amount of LOC Obligations outstanding or if
not the Borrower must immediately comply with Section 3.3(b)(i).
7.3 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted by Section 8.4.
7.4 BOOKS AND RECORDS.
Each of the Credit Parties will keep complete and accurate books and
records of its transactions in accordance with good accounting practices on the
basis of GAAP (including the establishment and maintenance of appropriate
reserves).
7.5 COMPLIANCE WITH LAW.
Each of the Credit Parties will comply with all material laws, rules,
regulations and orders, and all applicable material restrictions imposed by all
Governmental Authorities, applicable to it and its property (including, without
limitation, Environmental Laws).
7.6 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Credit Parties will pay, settle or discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party
shall not be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) would give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) would have
a Material Adverse Effect.
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7.7 INSURANCE.
Each of the Credit Parties will at all times maintain in full force and
effect insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
All liability policies shall have the Administrative Agent, on behalf of the
Lenders, as an additional insured and all casualty policies shall have the
Administrative Agent, on behalf of the Lenders, as loss payee.
In the event there occurs any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Administrative Agent generally
describing the nature and extent of such damage or destruction. Subsequent to
any loss, damage to or destruction of the Collateral of any Credit Party or any
part thereof, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party's cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed;
PROVIDED, HOWEVER, that such Credit Party need not repair or replace the
Collateral of such Credit Party so lost, damaged or destroyed to the extent the
failure to make such repair or replacement (a) is desirable to the proper
conduct of the business of such Credit Party in the ordinary course and
otherwise is in the best interest of such Credit Party and (b) would not
materially impair the rights and benefits of the Agents or the Lenders under
this Credit Agreement or any other Credit Document. In the event a Credit Party
shall receive any insurance proceeds, as a result of any loss, damage or
destruction, in a net amount in excess of $1,000,000, such Credit Party will
immediately pay over such proceeds to the Administrative Agent as cash
collateral for the Credit Party Obligations. The Administrative Agent agrees to
release such insurance proceeds to such Credit Party for replacement or
restoration of the portion of the Collateral of such Credit Party lost, damaged
or destroyed if (A) within 15 days from the date the Administrative Agent
receives such insurance proceeds, the Administrative Agent has received written
application for such release from such Credit Party together with evidence
reasonably satisfactory to it that the Collateral lost, damaged or destroyed has
been or will be replaced or restored to its condition (or by Collateral having a
value at least equal to the condition of the asset subject to the loss, damage
or destruction) immediately prior to the loss, destruction or other event giving
rise to the payment of such insurance proceeds and (B) on the date of such
release no Default or Event of Default exists. If the conditions in the
preceding sentence are not met, the Administrative Agent shall, on the first
Business Day subsequent to the date 30 days after it received such insurance
proceeds, apply such insurance proceeds as a mandatory prepayment of the Credit
Party Obligations for application in accordance with the terms of Section
3.3(b)(ii) and Section 3.3(c). All insurance proceeds shall be subject to the
security interest of the Lenders under the Collateral Documents.
The present insurance coverage of the Borrower and its Subsidiaries is outlined
as to carrier, policy number, expiration date, type and amount on SCHEDULE 7.7,
as SCHEDULE 7.7 may be amended from time to time by written notice to the
Administrative Agent.
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7.8 MAINTENANCE OF PROPERTY.
Each of the Credit Parties will maintain and preserve its properties and
equipment in good repair, working order and condition, normal wear and tear
excepted (subject to damage by casualties), and will make, or cause to be made,
in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.9 PERFORMANCE OF OBLIGATIONS.
Each of the Credit Parties will perform in all material respects all of
its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
7.10 COLLATERAL.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire or
lease any real property or (b) acquire any intellectual property, securities,
instruments, chattel paper or other personal property required to be delivered
to the Collateral Agent as Collateral hereunder or under any of the Collateral
Documents, the Borrower shall immediately notify the Collateral Agent of same.
Each Credit Party shall take such action (including, but not limited to, the
actions set forth in Sections 5.1(f) and (g)), as requested by the Collateral
Agent and at its own expense, to ensure that the Lenders have a first priority
perfected Lien in all owned real property (and in such leased real property as
reasonably requested by the Collateral Agent or the Required Lenders) and all
personal property of the Credit Parties (whether now owned or hereafter
acquired), subject only to Permitted Liens. Each Credit Party shall adhere to
the covenants regarding the location of personal property as set forth in the
Security Agreements.
7.11 USE OF PROCEEDS.
The Credit Parties will use the proceeds of the Loans solely (a) to pay
related fees and expenses in connection with the execution and delivery of the
Credit Documents, (b) to provide working capital, (c) to make Capital
Expenditures, (d) for general corporate purposes and (e) as otherwise permitted
under this Credit Agreement. The Credit Parties will use the Letters of Credit
solely for the purposes set forth in Section 2.2(a).
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7.12 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours and in a manner
than will not unreasonably interfere with its business operations, each Credit
Party will permit representatives appointed by an Agent, including, without
limitation, independent accountants, agents, attorneys and appraisers to visit
and inspect such Credit Party's property, including its books and records, its
accounts receivable and inventory, its facilities and its other business assets,
and to make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit an Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders, including, without limitation, the performance of collateral
valuation reviews from time to time to assess the composition of the Borrowing
Base Assets, and to discuss all such matters with the officers, employees and
representatives of the Credit Parties. It is understood and agreed that the
Borrower shall permit (at its expense) an audit from a third party acceptable to
the Agents of its inventory, controls and systems within the first six months
subsequent to the Closing Date.
7.13 ADDITIONAL CREDIT PARTIES.
At the time any Person becomes a Subsidiary of a Credit Party, the
Borrower shall so notify the Administrative Agent and promptly thereafter (but
in any event within 30 days after the date thereof) shall cause such Person to
(a) execute a Joinder Agreement in substantially the same form as EXHIBIT 7.13,
(b) cause all of the capital stock of such Person to be delivered to the
Collateral Agent (together with undated stock powers signed in blank) and
pledged to the Collateral Agent pursuant to an appropriate pledge agreement in
substantially the form of the Pledge Agreements and otherwise in a form
reasonably acceptable to the Collateral Agent, (c) pledge all of its assets to
the Lenders pursuant to a security agreement in substantially the form of the
Security Agreements and otherwise in a form reasonably acceptable to the
Collateral Agent, (d) if such Person has any Subsidiaries, (i) deliver all of
the capital stock of such Subsidiaries (together with undated stock powers
signed in blank) to the Collateral Agent and (ii) execute a pledge agreement in
substantially the form of the Pledge Agreements and otherwise in a form
reasonably acceptable to the Collateral Agent, (e) if such Person owns or leases
any real property, execute any and all necessary mortgages, deeds of trust,
deeds to secure debt, leasehold mortgages, collateral assignments of leaseholds
or other appropriate real estate collateral documentation in a form
substantially similar to the Mortgages or the Leasehold Mortgages, as the case
may be, with appropriate covenants as necessary and (f) deliver such other
documentation as the Administrative Agent or Collateral Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
environmental reports, landlord waivers, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the Agents.
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7.14 INTEREST RATE PROTECTION AGREEMENTS.
The Borrower shall maintain or enter into and maintain, until the
Revolving Loan Maturity Date, interest rate protection agreements, in form and
substance (including, without limitation, the level thereof) reasonably
acceptable to the Agents, protecting against fluctuations in interest rates, in
a notional amount of at least $50 million.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest, fees and other obligations hereunder, have been paid in full and the
Commitments and Letters of Credit hereunder shall have terminated:
8.1 INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) the Subordinated Debt;
(c) Indebtedness existing as of the Closing Date (other than the
Subordinated Debt) as referenced in Section 6.10 (and renewals,
refinancings or extensions thereof on terms and conditions no more
favorable, in the aggregate, to such Person than such existing
Indebtedness and in a principal amount not in excess of that outstanding
as of the date of such renewal, refinancing or extension);
(d) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business including, to the
extent not current, accounts payable and accrued expenses that are subject
to bona fide dispute;
(e) Indebtedness owing by one Credit Party to another Credit Party;
(f) purchase money Indebtedness (including Capital Leases) incurred
by the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets; PROVIDED that (i) the total of all such Indebtedness for all
such Persons taken together shall not exceed an aggregate principal amount
of $7,000,000 at any one time outstanding (including any such Indebtedness
referred to in subsection (c) above); (ii) such Indebtedness when incurred
shall
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not exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(g) Indebtedness arising from obligations of the Credit Parties
evidenced by the interest rate protection agreements referred to in
Section 7.14; and
(h) Indebtedness incurred in connection with the refinancing of Real
Properties; provided that (i) the proceeds from such refinancing (other
than Refinanced Properties) shall be paid to the Lenders as set forth in
Section 3.3(b)(iii) and (ii) the Borrower shall not incur such
Indebtedness with respect to Real Properties (other than Refinanced
Properties) which, together with any Real Properties transferred via a
sale/leaseback transaction permitted by Section 8.6, exceeds, in the
aggregate, a value of $50 million (as determined pursuant to SCHEDULE
1.1(B)).
8.2 LIENS.
No Credit Party will, nor will it permit its Subsidiaries to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
No Credit Party will alter the character of its business from that
conducted as of the Closing Date or engage in any business other than the
business conducted as of the Closing Date.
8.4 CONSOLIDATION AND MERGER.
No Credit Party will enter into any transaction of merger or consolidation
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that notwithstanding the foregoing provisions of this
Section 8.4, any Credit Party may be merged or consolidated with or into the
Borrower or any other Credit Party if (a) such transaction is between the
Borrower and another Credit Party, the Borrower is the continuing or surviving
corporation; (b) the Administrative Agent is given prior written notice of such
action, and the Credit Parties execute and deliver such documents, instruments
and certificates as the Collateral Agent may request in order to maintain the
perfection and priority of the Liens on the assets of the Credit Parties; and
(c) after giving effect thereto no Default or Event of Default exists.
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8.5 SALE OR LEASE OF ASSETS.
No Credit Party will convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business or assets whether now owned or hereafter acquired, including, without
limitation, inventory, receivables, equipment, real property interests (whether
owned or leasehold), and securities, other than (a) any inventory sold or
otherwise disposed of in the ordinary course of business; (b) the sale, lease,
transfer or other disposal by a Credit Party (other than the Borrower) of any or
all of its assets to the Borrower or to another Credit Party; (c) obsolete, slow
moving, idle or worn out assets (including inventory) no longer used or useful
in its business, not to exceed, in the aggregate, a book value of $5,000,000
during the term of this Credit Agreement; (d)(i) the sale of unimproved real
estate or stores which are unfinished and not operating and (ii) the sale of
existing stores (together with related fixtures but not including inventory) not
to exceed, in the aggregate, a book value of $24,000,000 during the term of this
Credit Agreement; provided that any sale of assets pursuant to this Section
8.5(d) shall be subject to the following conditions: (A) the Borrower shall give
the Agents at least 10 days' prior written notice of such sale, which notice
shall, among other things, specify the aggregate purchase price therefore, (B)
at least 75% of the consideration paid in connection therewith shall consist of
cash (excluding as cash any amounts held in reserve for adjustments, whether for
indemnification or otherwise), (C) all non-cash consideration received in
connection with such sale must be pledged to the Collateral Agent, for the
benefit of the Lenders, pursuant to documentation reasonably requested by the
Collateral Agent, and any proceeds received from such non-cash consideration
shall be paid to the Lenders when received in accordance with Section 3.3(b) and
(c), (D) the Net Cash Proceeds received in such sale are paid to the Lenders in
accordance with Section 3.3 and (E) all such sales must be for fair market
value; (e) the issuance of capital stock if the proceeds are forwarded in
accordance with Section 3.3(b) and (c); (f) the transfer of assets which
constitute a Permitted Investment; or (g) transfers permitted by Section 8.6.
Upon a sale of assets permitted by this Section 8.5, the Collateral Agent
shall promptly deliver to the Borrower, upon the Borrower's request and at the
Borrower's expense, such documentation as is reasonably necessary to evidence
the release of the Lenders' security interest in such assets, including, without
limitation, amendments or terminations of UCC financing statements.
8.6 SALE/LEASEBACKS.
No Credit Party will directly or indirectly become or remain liable as
lessee or as guarantor or other surety with respect to any lease of any property
(whether real or personal or mixed), whether now owned or hereafter acquired,
(a) which such Credit Party has sold or transferred or is to sell or transfer to
any other Person other than a Credit Party or (b) which such Credit Party
intends to use for substantially the same purpose as any other property which
has been sold or is to be sold or transferred by such Credit Party to any Person
in connection with such lease; provided, however, that the Credit Parties may
enter into such transactions (i) with respect to the Refinanced Properties, (ii)
with respect to other Real Properties (in addition to the Refinanced Properties)
if
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such other Real Properties, together with any Real Properties refinanced as
permitted by Section 8.1(h), do not exceed, in the aggregate, a value of $50
million (as determined pursuant to SCHEDULE 1.1(B)) and (iii) with respect to
personal property, in an aggregate amount of up to $5,000,000 in sales proceeds
during the term of this Credit Agreement, if (I), in either case, (A) after
giving pro forma effect to any such transaction the Borrower shall be in
compliance with all other provisions of this Credit Agreement, including
Sections 7.2, 8.1 and 8.2 and (B) the gross cash proceeds of any such
transaction are at least equal to the fair market value of such property and
(II) in connection with subclause (i), the Net Cash Proceeds from the
sale/leaseback of Real Properties (other than the Refinanced Properties) are
forwarded to the Administrative Agent as set forth in Section 3.3(b) and (c).
8.7 ADVANCES, INVESTMENTS AND LOANS.
No Credit Party will make any Investments except for Permitted
Investments.
8.8 DIVIDENDS.
No Credit Party will directly or indirectly, (a) declare or pay any
dividends or make any other distribution upon any shares of its capital stock of
any class or (b) purchase, redeem or otherwise acquire or retire or make any
provisions for redemption, acquisition or retirement of any shares of its
capital stock of any class or any warrants or options to purchase any such
shares; provided that any Subsidiary of the Borrower may pay dividends to the
Borrower.
8.9 TRANSACTIONS WITH AFFILIATES.
Except for loans to employees as permitted by Section 8.7, no Credit Party
will enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder, Subsidiary
or Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm's-length transaction with a Person other
than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
No Credit Party will (a) change its fiscal year or (b) change its articles
or certificate of incorporation or its bylaws if such change would have or be
reasonably expected to have a Material Adverse Effect.
8.11 SUBORDINATED DEBT.
No Credit Party will (a) make or offer to make any principal payments with
respect to the Subordinated Debt, (b) redeem or offer to redeem any of the
Subordinated Debt, or (c) deposit any funds intended to discharge or defease any
or all of the Subordinated Debt. The Subordinated Debt
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shall not be amended or modified in any manner without the prior written consent
of the Required Lenders.
8.12 LIMITATIONS.
No Credit Party will directly or indirectly, create or otherwise cause,
incur, assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Person to (a)
pay dividends or make any other distribution on any of such Person's capital
stock, (b) pay any Indebtedness owed to the Borrower or any other Credit Party,
(c) make loans or advances to any other Credit Party or (d) transfer any of its
property to any other Credit Party, except for encumbrances or restrictions
existing under or by reason of (i) customary non-assignment or net worth
provisions in any lease governing a leasehold interest, (ii) any agreement or
other instrument of a Person existing at the time it becomes a Subsidiary of the
Borrower; PROVIDED that such encumbrance or restriction is not applicable to any
other Person, or any property of any other Person, other than such Person
becoming a Subsidiary of the Borrower and was not entered into in contemplation
of such Person becoming a Subsidiary of the Borrower, and (iii) this Credit
Agreement and the other Credit Documents.
8.13 NEGATIVE PLEDGES.
No Credit Party will enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation.
8.14 CAPITAL EXPENDITURES.
The Credit Parties shall not make Capital Expenditures in cash that would
exceed, in the aggregate (a) during the fiscal year of the Borrower ending
closest to January 31, 1998, $22 million, (b) during the fiscal year of the
Borrower ending closest to January 31, 1999, $22 million plus 10% of EBITDA
earned during the fiscal year of the Borrower ending closest to January 31, 1998
and (c) for the period from February 1, 1999 to May 31, 1999, $7,300,000 plus 5%
of EBITDA earned during the fiscal year of the Borrower ending closest to
January 31, 1999; it being understood that for the purposes of this Section 8.14
"Capital Expenditures in cash" shall mean all Capital Expenditures other than
those financed as permitted under Section 8.1(f).
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
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An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) PAYMENT. Any Credit Party shall default in the payment (i) when
due of any principal of any of the Loans or any reimbursement obligation
arising from drawings under Letters of Credit or (ii) within three days of
when due of any interest on the Loans or any fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith.
(b) REPRESENTATIONS. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was made or deemed to have
been made.
(c) COVENANTS. Any Credit Party shall:
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.3, 7.5,
7.6, 7.7, 7.10, 7.11, 7.12, 7.13, 7.14 or 8.1 through 8.14
inclusive; or
(ii) default in the due performance or observance by it
of any term, covenant or agreement contained in Sections 7.1 and
such default shall continue unremedied for a period of five Business
Days after the earlier of an officer of a Credit Party becoming
aware of such default or notice thereof given by an Agent; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) or (ii) of this Section 9.1)
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 20 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice
thereof given by an Agent.
(d) OTHER CREDIT DOCUMENTS. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents and such default shall continue
unremedied for a period of at least 20 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice thereof
given by the Agent, or (ii) any Credit Document shall fail to be in full
force and effect or any Credit Party shall so assert or any Credit
Document shall fail to give the Agents and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be created
thereby.
(e) GUARANTIES. The guaranty given by the Credit Parties hereunder
or by any Additional Credit Party hereafter or any provision thereof shall
cease to be in full force and
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effect, or any guarantor thereunder or any Person acting by or on behalf
of such guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty.
(f) BANKRUPTCY, ETC. The occurrence of any of the following with
respect to the Borrower or any of its Subsidiaries: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Borrower or any of its Subsidiaries or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against the Borrower or any of its Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) the Borrower or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) the Borrower or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
(g) DEFAULTS UNDER OTHER AGREEMENTS. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of the Borrower or any of its Subsidiaries in an aggregate
principal amount in excess of $500,000, including, without limitation, the
Subordinated Debt (i) a Credit Party shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (B) default (after giving effect to
any applicable grace period) in the observance or performance relating to
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required) any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment prior to the stated maturity thereof; or (iii) any such
Indebtedness shall mature and remain unpaid.
(h) JUDGMENTS. One or more judgments, orders, or decrees shall be
entered against any one or more of the Credit Parties involving a
liability of $500,000 or more, in the aggregate, (to the extent not paid
or covered by insurance provided by a carrier who has acknowledged
coverage) and such judgments, orders or decrees (i) are the subject of any
enforcement proceeding commenced by any creditor or (ii) shall continue
unsatisfied,
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undischarged and unstayed for a period ending on the first to occur of (A)
the last day on which such judgment, order or decree becomes final and
unappealable or (B) 20 days.
(i) ERISA. The occurrence of any of the following events or
conditions: (A) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall arise
on the assets of the Borrower or any of its Subsidiaries or any ERISA
Affiliate in favor of the PBGC or a Plan; (B) a Termination Event shall
occur with respect to a Single Employer Plan, which is, in the reasonable
opinion of the Administrative Agent, likely to result in the termination
of such Plan for purposes of Title IV of ERISA; (C) a Termination Event
shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (i) the termination of such Plan for purposes of Title
IV of ERISA, or (ii) the Borrower or any of its Subsidiaries or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency (within the meaning of Section 4245 of ERISA) of such Plan; or
(D) any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject the Borrower or any of its Subsidiaries or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which the Borrower or any of its Subsidiaries
or any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(j) OWNERSHIP. There shall occur a Change of Control.
(k) SUBORDINATED DEBT. (i) Any holder of the Subordinated Debt
alleges, or any Governmental Authority with applicable jurisdiction
determines that the Lenders are not holders of Senior Indebtedness (as
defined in the Indenture) or (ii) the subordination provisions creating
the Subordinated Debt shall, in whole or in part, terminate, cease to be
effective or cease to be legally valid, binding and enforceable as to any
holder of the Subordinated Debt.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrower, take any of the following actions
without prejudice to the rights of the Agents or any Lender to enforce its
claims against the Credit Parties, except as otherwise specifically provided for
herein:
(a) TERMINATION OF COMMITMENTS. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
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(b) ACCELERATION OF LOANS. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by a Credit Party
to any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount equal
to the maximum aggregate amount which may be drawn under all Letters of
Credits then outstanding.
(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agents or the
Lenders, which notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by an Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees) of
the Agents in connection with enforcing the rights of the Lenders under
the Credit Documents and any protective advances
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made by the Agents with respect to the Collateral under or pursuant to the
terms of the Collateral Documents;
SECOND, to payment of any fees owed to an Agent or the Issuing
Lender;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable
to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans and unreimbursed drawings under Letters of Credit, to the payment or
cash collateralization of the outstanding LOC Obligations and to any
principal amounts outstanding under Hedging Agreements, pro rata, as set
forth below;
SIXTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and obligations under Hedging Agreements held by such Lender bears
to the aggregate then outstanding Loans, LOC Obligations and obligations under
Hedging Agreements) of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH," "FIFTH," and "SIXTH" above; and (c) to the extent that any
amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Collateral Agent in a cash collateral account
and applied (x) first, to reimburse the Issuing Lender from time to time for any
drawings under such Letters of Credit and (y) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in this Section 9.3.
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SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints Xxxxxxx Bank, N.A. as
Administrative Agent and Collateral Agent and NationsBank, N.A. (South) as
Documentation Agent of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Agents, as the
agents for such Lender, to take such action on its behalf under the provisions
of this Credit Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated by the terms hereof
and of the other Credit Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere herein and in the other Credit Documents, the Agents shall not have
any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Credit Agreement or any of the other Credit Documents, or
shall otherwise exist against the Agents. The provisions of this Section are
solely for the benefit of the Agents and the Lenders and none of the Credit
Parties shall have any rights as a third party beneficiary of the provisions
hereof. In performing its functions and duties under this Credit Agreement and
the other Credit Documents, each Agent shall act solely as an agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party.
10.2 DELEGATION OF DUTIES.
An Agent may execute any of its duties hereunder or under the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. An Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS.
Neither the Agents nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by an Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The Agents
shall not be responsible to any Lender for the effectiveness, genuineness,
validity,
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enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by the Borrower or any Credit Party
in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by an Agent to the Lenders or by or on behalf of
the Credit Parties to the Agents or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or of the
existence or possible existence of any Default or Event of Default or to inspect
the properties, books or records of the Credit Parties. The Agents are not
trustees for the Lenders and owe no fiduciary duty to the Lenders.
10.4 RELIANCE ON COMMUNICATIONS.
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agents with reasonable care). The Agents may deem
and treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent in accordance with Section
11.3(b). The Agents shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agents shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).
10.5 NOTICE OF DEFAULT.
An Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless such Agent has received
notice from a Lender or a Credit Party referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders.
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10.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agents, NationsBanc
Capital Markets, Inc. ("NCMI") nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Agents, NCMI or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the Agents or
NCMI to any Lender. Each Lender represents to the Agents and NCMI that it has,
independently and without reliance upon the Agents or NCMI or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Credit Parties and made its own decision to make its Loans hereunder and enter
into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agents, NCMI or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Agents and NCMI shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Credit Parties which may come
into the possession of the Agents, NCMI or any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interest of the
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against an Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by an Agent under or in connection with any of the foregoing; PROVIDED that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of an Agent. If any indemnity furnished to an Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to
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do the acts indemnified against until such additional indemnity is furnished.
The agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 AGENTS IN THEIR INDIVIDUAL CAPACITY.
Each Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though such Agent were not an Agent hereunder. With respect to the
Loans made and Letters of Credit issued and all obligations owing to it, an
Agent shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though they were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
10.9 SUCCESSOR AGENT.
Any Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 45 days
after the notice of resignation, then the retiring Agent shall select a
successor Agent provided such successor is a Lender hereunder or a commercial
bank organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as an Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as an Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Credit
Agreement.
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SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on SCHEDULE
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section
9.2, each Lender is authorized at any time and from time to time, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation, branches, agencies or
Affiliates of such Lender wherever located) to or for the credit or the account
of any Credit Party against obligations and liabilities of such Credit Party to
the Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have made
any demand hereunder and although such obligations, liabilities or claims, or
any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to Section 11.3(c)
or 3.8 may exercise all rights of set-off with respect to its participation
interest as fully as if such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) GENERALLY. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; PROVIDED that none of the Credit Parties
may assign and transfer any of its interests (except as permitted by
Section 8.4 or 8.5) without the prior written consent of the Lenders; and
PROVIDED FURTHER that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be
limited as set forth below in subsections (b)
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and (c) of this Section 11.3. Notwithstanding the above (including
anything set forth in subsections (b) and (c) of this Section 11.3),
nothing herein shall restrict, prevent or prohibit any Lender from (A)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank, or (B)
granting assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any Affiliate of
such Lender or to any existing Lender or Affiliate thereof.
(b) ASSIGNMENTS. Each Lender may, with the prior written consent of
the Borrower and the Agents (provided that no consent of the Borrower
shall be required during the existence and continuation of an Event of
Default), which consent shall not be unreasonably withheld or delayed,
assign all or a portion of its rights and obligations hereunder pursuant
to an assignment agreement substantially in the form of EXHIBIT 11.3 to
one or more Eligible Assignees; PROVIDED that (i) any such assignment
shall be in a minimum aggregate amount of $5,000,000 of the Commitments
and in integral multiples of $1,000,000 above such amount (or the
remaining amount of Commitments held by such Lender) and (ii) each such
assignment shall be of a constant, not varying, percentage of all of the
assigning Lender's rights and obligations under the Commitment being
assigned. Any assignment hereunder shall be effective upon satisfaction of
the conditions set forth above and delivery to the Administrative Agent of
a duly executed assignment agreement together with a transfer fee of
$5,000 payable to the Administrative Agent for its own account. Upon the
effectiveness of any such assignment, the assignee shall become a "Lender"
for all purposes of this Credit Agreement and the other Credit Documents
and, to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the appropriate
Note or Notes, it will promptly provide to the assigning Lender and to the
assignee separate promissory notes in the amount of their respective
interests substantially in the form of the original Note or Notes (but
with notation thereon that it is given in substitution for and replacement
of the original Note or Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and the assignee warrants that
it is an Eligible Assignee; (ii) except as set forth in clause (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any
of the other Credit Documents or any other instrument
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or document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or observance
by any Credit Party of any of its obligations under this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such assignment
agreement; (iv) such assignee confirms that it has received a copy of this
Credit Agreement, the other Credit Documents and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such assignment agreement; (v) such assignee
will independently and without reliance upon the Agents, such assigning
Lender or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Credit Agreement and
the other Credit Documents; (vi) such assignee appoints and authorizes the
Agents to take such action on its behalf and to exercise such powers under
this Credit Agreement or any other Credit Document as are delegated to the
Agents by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the
terms of this Credit Agreement and the other Credit Documents are required
to be performed by it as a Lender.
(c) PARTICIPATIONS. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder; PROVIDED that (i) such selling Lender shall remain
a "Lender" for all purposes under this Credit Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and
the participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Credit Agreement or the other Credit Documents
except to the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any Loans in
which the participant is participating or increase any Commitments with
respect thereto, (B) postpone the date fixed for any payment of principal
(including the extension of the final maturity of any Loan or the date of
any mandatory prepayment), interest or fees in which the participant is
participating, or (C) release all or substantially all of the collateral
or guaranties (except as expressly provided in the Credit Documents)
supporting any of the Loans or Commitments in which the participant is
participating, (iii) sub-participations by the participant (except to an
Affiliate, parent company or Affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations shall be
in a minimum aggregate amount of $5,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case of any
such participation, the participant shall not have any rights under this
Credit Agreement or the other Credit Documents (the participant's rights
against the selling Lender in respect of such participation to be those
set forth in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation; PROVIDED,
however, that such participant shall be entitled to receive additional
amounts under Sections
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3.9, 3.12, 3.13 and 3.14 to the same extent that the Lender from which
such participant acquired its participation would be entitled to the
benefit of such cost protection provisions.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of an Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any Credit Party and the Agents or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agents or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agents or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agents and NationsBanc Capital Markets, Inc. ("NCMI") in
connection with (A) the negotiation, preparation, execution and delivery and
administration of this Credit Agreement and the other Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and expenses of Xxxxx & Xxx Xxxxx, special counsel to the
Agents and the fees and expenses of counsel for the Agents in connection with
collateral issues), and (B) any amendment, waiver or consent relating hereto and
thereto including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Credit Parties under this Credit Agreement and (ii)
the Agents and the Lenders in connection with (A) enforcement of the Credit
Documents and the documents and instruments referred to therein, including,
without limitation, in connection with any such enforcement, the reasonable fees
and disbursements of counsel for the Agents and each of the Lenders, and (B) any
bankruptcy or insolvency proceeding of a Credit Party of any of its Subsidiaries
and (b) indemnify each Agent, NCMI and each Lender, its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not any
Agent, NCMI or Lender is a party thereto) related to (i) the entering into
and/or performance of any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross
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negligence or willful misconduct on the part of the Person to be indemnified),
(ii) any Environmental Claim and (iii) any claims for Non-Excluded Taxes or
Florida Taxes.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; PROVIDED
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion thereof or
postpone any other date fixed for any payment of principal;
(b) reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase
in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any Default or
Event of Default or a waiver of any mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender);
(e) release all or substantially all of the Collateral securing the
Credit Party Obligations hereunder (provided that the Collateral Agent
may, without consent from any other Lender, release any Collateral that is
sold or transferred by a Credit Party in conformance with Section 8.5);
(f) release the Borrower or any of the other Credit Parties from its
obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section or Section
3.4(a), 3.4(b)(i), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a),
11.2, 11.3 or 11.5;
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders;
(i) consent to the assignment or transfer by the Borrower or of any
of its rights and obligations under (or in respect of) the Credit
Documents except as permitted under Section 8.4; or
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(j) modify or amend the definition of the term "Borrowing Base
Assets" in Section 1.1 in a manner that would (i) increase the percentage
as to Eligible Inventory above 65%, (ii) increase the percentage as to
Eligible Real Estate above 75% or (iii) increase the percentage as to
Eligible Equipment in any amount.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 DEFAULTING LENDER.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
11.11 GOVERNING LAW; JURISDICTION.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
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SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF FLORIDA. Any legal action or proceeding with respect to this
Agreement or any other Credit Document may be brought in the courts of the State
of Florida (including the Hillsborough County, Florida Circuit Court) or of the
United States for the Middle District of Florida, Tampa division and, by
execution and delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Credit Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective 15 days after such
mailing. Nothing herein shall affect the right of a Lender to serve process in
any other manner permitted by law or to commence legal proceedings or to
otherwise proceed against a Credit Party in any other jurisdiction. Each Credit
Party agrees that a final judgment in any 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; provided that nothing in this Section
11.11(a) is intended to impair a Credit Party's right under applicable law to
appeal or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 TIME.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
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11.15 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.16 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT
AGREEMENT; FURTHER ASSURANCES.
This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by the Borrower, the Guarantors and the Agents,
and the Agents shall have received copies hereof (telefaxed or otherwise) which,
when taken together, bear the signatures of each Lender, and thereafter this
Credit Agreement shall be binding upon and inure to the benefit of the Borrower,
the Guarantors, the Agents and each Lender and their respective successors and
assigns. The Credit Parties and the Lenders party to the Existing Credit
Agreement each hereby agrees that, at such time as this Credit Agreement shall
have become effective pursuant to the terms of the immediately preceding
sentence, (a) the Existing Credit Agreement automatically shall be deemed
amended and restated in its entirety by this Credit Agreement, and all
obligations and indemnifications outstanding under the Existing Credit Agreement
shall be governed by the terms of this Credit Agreement (as such obligations or
commitments may be modified or amended hereunder) and (b) all of the promissory
notes executed by the Borrower in connection with the Existing Credit Agreement
automatically shall be substituted and replaced by the amended and restated
promissory notes executed in connection with this Credit Agreement, and the
Lenders agree to promptly return such prior notes to the Borrower. The Credit
Parties further agree, upon the request of the Agent and/or the Required
Lenders, to promptly take such actions, as reasonably requested, as are
appropriate to carry out the intent of this Credit Agreement and the other
Credit Documents, including, but not limited to, such actions as are necessary
to ensure that the Lenders have a perfected security interest in all assets of
the Credit Parties, subject to no Liens other than Permitted Liens.
11.17 CONFIDENTIALITY.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.12 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; PROVIDED, HOWEVER, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
93
notified of the confidential nature of the information or (f) any other Person
in connection with any litigation to which any one or more of the Lenders is a
party; and PROVIDED FURTHER that no Lender shall have any obligation under this
Section 11.17 to the extent any such information becomes available on a
non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.17.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
JUMBOSPORTS INC.,
a Florida corporation
By: _______________________
Name: _____________________
Title: ____________________
GUARANTORS: SPORTS & RECREATION HOLDINGS OF PA, INC.,
a Delaware corporation
By: _______________________
Name: _____________________
Title: ____________________
GUIDE SERIES, INC.,
a Florida corporation
By: _______________________
Name: _____________________
Title: ____________________
CONSTRUCTION RESOLUTION, INC.,
a Florida corporation
By: _______________________
Name: _____________________
Title: ____________________
SPORTS & RECREATION, INC.,
a Florida corporation
By: _______________________
Name: _____________________
Title: ____________________
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
LENDERS:
XXXXXXX BANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative
Agent and Collateral Agent
By: _______________________
Name: _____________________
Title: ____________________
NATIONSBANK, N.A. (SOUTH),
individually in its capacity as a Lender and in
its capacity as Documentation Agent
By: _______________________
Name: _____________________
Title: ____________________
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
SUNTRUST BANK, TAMPA BAY
By: _______________________
Name: _____________________
Title: ____________________
2
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
PNC BANK, KENTUCKY, INC.
By: _______________________
Name: _____________________
Title: ____________________
3
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
HIBERNIA NATIONAL BANK
By: _______________________
Name: _____________________
Title: ____________________
4
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 0000
XXXXXX XXXXXX XXXXXXXX XXXX XX XXXXXX
By: _______________________
Name: _____________________
Title: ____________________
5
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
THE SUMITOMO BANK, LIMITED
By: _______________________
Name: _____________________
Title: ____________________
By: _______________________
Name: _____________________
Title: ____________________
6
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 0000
XXXXXXXX XXXX XX XXXXXX
By: _______________________
Name: _____________________
Title: ____________________
7
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
LTCB TRUST COMPANY
By: _______________________
Name: _____________________
Title: ____________________
8
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
FIRST AMERICAN NATIONAL BANK
By: _______________________
Name: _____________________
Title: ____________________
9
Signature page to JumboSports, Inc.
Amended and Restated Credit
Agreement dated May 28, 1997
THE SAKURA BANK, LIMITED
By: _______________________
Name: _____________________
Title: ____________________
10
