Exhibit 10(b)
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
dated as of
August 16, 2000
among
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
▇▇▇▇▇▇-▇▇▇▇▇▇ FURNITURE COMPANY
▇▇▇▇▇▇-▇▇▇▇▇▇ FURNITURE WEST, INC.
HMY ROOMSTORE, INC.
HMY STAR, INC.
MACSAVER FINANCIAL SERVICES, INC.
The LENDERS Party Hereto,
FLEET NATIONAL BANK
as Issuing Bank
FLEET RETAIL FINANCE INC.
as Administrative Agent and Collateral Agent
BACK BAY CAPITAL FUNDING, LLC
as Tranche B Administrative Agent
CITICORP USA, INC.
as Syndication Agent
and
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
as Arranger
---------------------------
43
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................1
Section 1.1 Defined Terms...........................................1
Section 1.2 Terms Generally........................................25
Section 1.3 Accounting Terms; GAAP.................................26
ARTICLE II AMOUNT AND TERMS OF CREDIT......................................26
Section 2.1 Commitment of the Lenders..............................26
Section 2.2 Reserves; Changes to Reserves..........................27
Section 2.3 Making of Loans........................................27
Section 2.4 Overadvances...........................................29
Section 2.5 Swingline Loans........................................29
Section 2.6 Letters of Credit......................................30
Section 2.7 Settlements Amongst Tranche A Lenders..................34
Section 2.8 Notes; Repayment of Loans..............................35
Section 2.9 Interest on Loans......................................36
Section 2.10 Default Interest.......................................37
Section 2.11 Certain Fees...........................................37
Section 2.12 Unused Commitment Fee..................................37
Section 2.13 Letter of Credit Fees..................................38
Section 2.14 Nature of Fees.........................................38
Section 2.15 Termination or Reduction of Commitments................39
Section 2.16 Alternate Rate of Interest.............................39
Section 2.17 Conversion and Continuation of Tranche A Loans.........40
Section 2.18 Mandatory Prepayment; Commitment Termination;
Cash Collateral......................................41
Section 2.19 Optional Prepayment of Loans;
Reimbursement of Lenders.............................43
Section 2.20 Maintenance of Loan Account; Statements of Account.....44
Section 2.21 Cash Receipts..........................................45
Section 2.22 Application of Payments................................47
Section 2.23 Increased Costs........................................48
Section 2.24 Change in Legality.....................................50
Section 2.25 Payments; Sharing of Setoff...........................50
Section 2.26 Taxes..................................................52
Section 2.27 Security Interest in Collateral........................53
Section 2.28 Mitigation Obligations; Replacement of Lenders.........53
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................54
Section 3.1 Organization; Powers...................................54
Section 3.2 Authorization; Enforceability..........................55
Section 3.3 Governmental Approvals; No Conflicts...................55
Section 3.4 Financial Condition....................................55
Section 3.5 Properties.............................................56
Section 3.6 Litigation and Environmental Matters...................56
Section 3.7 Compliance with Laws and Agreements....................56
Section 3.8 Investment and Holding Company Status..................57
Section 3.9 Taxes..................................................57
Section 3.10 ERISA..................................................57
Section 3.11 Disclosure.............................................57
Section 3.12 Subsidiaries...........................................58
Section 3.13 Insurance..............................................58
Section 3.14 Labor Matters..........................................58
Section 3.15 Security Documents.....................................58
Section 3.16 Federal Reserve Regulations............................59
ARTICLE IV CONDITIONS......................................................59
Section 4.1 Closing Date...........................................59
Section 4.2 Conditions Precedent to Each Loan and
Each Letter of Credit................................62
44
ARTICLE V AFFIRMATIVE COVENANTS............................................63
Section 5.1 Financial Statements and Other Information.............63
Section 5.2 Notices of Material Events.............................65
Section 5.3 Information Regarding Collateral.......................66
Section 5.4 Existence; Conduct of Business.........................66
Section 5.5 Payment of Obligations.................................66
Section 5.6 Maintenance of Properties..............................67
Section 5.7 Insurance..............................................67
Section 5.8 Casualty and Condemnation..............................68
Section 5.9 Books and Records; Inspection and Audit Rights.........68
Section 5.10 Compliance with Laws...................................68
Section 5.11 Use of Proceeds and Letters of Credit..................69
Section 5.12 Additional Subsidiaries................................69
Section 5.13 Restructuring Consultant...............................69
Section 5.14 Further Assurances.....................................69
ARTICLE VI NEGATIVE COVENANTS..............................................70
Section 6.1 Indebtedness and Other Obligations.....................70
Section 6.2 Liens..................................................71
Section 6.3 Fundamental Changes....................................72
Section 6.4 Investments, Loans, Advances, Guarantees and
Acquisitions.........................................72
Section 6.5 Asset Sales............................................73
Section 6.6 Restricted Payments; Certain Payments of Indebtedness..74
Section 6.7 Transactions with Affiliates...........................75
Section 6.8 Restrictive Agreements.................................75
Section 6.9 Amendment of Material Documents........................75
Section 6.10 Additional Subsidiaries................................75
Section 6.11 Return of Property.....................................76
Section 6.12 Capital Expenditures...................................76
Section 6.13 Excess Availability....................................76
Section 6.14 Bankruptcy Proceedings.................................76
ARTICLE VII EVENTS OF DEFAULT..............................................76
Section 7.1 If any of the following events ("Events of Default")
shall occur:.........................................76
Section 7.2 Tranche B Actionable Events............................80
Section 7.3 When Continuing........................................80
Section 7.4 Remedies on Default....................................81
Section 7.5 Application of Proceeds................................81
ARTICLE VIII THE AGENTS....................................................82
Section 8.1 Administration by Administrative Agent.................82
Section 8.2 The Collateral Agent...................................82
Section 8.3 Sharing of Excess Payments.............................82
Section 8.4 Agreement of Required Lenders..........................83
Section 8.5 Liability of Agents....................................84
Section 8.6 Reimbursement and Indemnification......................84
Section 8.7 Rights of Agents.......................................85
Section 8.8 Independent Lenders and Issuing Bank...................85
Section 8.9 Notice of Transfer.....................................85
Section 8.10 Successor Agent........................................85
Section 8.11 Reports and Financial Statements.......................86
Section 8.12 Syndication Agent and Arranger.........................86
ARTICLE IX MISCELLANEOUS...................................................86
Section 9.1 Notices................................................86
Section 9.2 Waivers; Amendments....................................87
Section 9.3 Expenses; Indemnity; Damage Waiver.....................89
Section 9.4 Successors and Assigns.................................90
Section 9.5 Survival...............................................93
Section 9.6 Counterparts; Integration; Effectiveness...............93
Section 9.7 Severability...........................................93
Section 9.8 Right of Setoff........................................94
Section 9.9 Governing Law; Jurisdiction; Consent to
Service of Process...................................94
Section 9.10 WAIVER OF JURY TRIAL...................................94
Section 9.11 Headings...............................................94
Section 9.12 Confidentiality........................................95
Section 9.13 Interest Rate Limitation...............................95
Section 9.14 Additional Waivers.....................................95
45
EXHIBITS
A. Assignment and Acceptance
B. Interim Borrowing Order
C-1 Tranche A Notes
C-2 Swingline Note
C-3 Tranche B Notes
D-1 Opinion of Counsel to Loan Parties
D-2 Opinion of Bankruptcy Counsel
E. Borrowing Base Certificate
46
SCHEDULES
1.1 Lenders and Commitments
2.21(a) DDAs
2.21(b) Credit Card Arrangements
2.21(c) Blocked Accounts
2.21(f) Disbursement Accounts
3.05 Title to Properties; Real Estate
3.06 Disclosed Matters
3.12 Subsidiaries
3.13 Insurance
5.01(m) Financial Reporting Requirements
6.01 Indebtedness
6.02 Liens
6.04 Investments
6.08 Restrictions
47
DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of August 16, 2000 among
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY, debtor and debtor-in-possession, a Virginia corporation,
having its principal place of business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and the other LOAN PARTIES hereto; and the LENDERS party hereto;
and FLEET NATIONAL BANK, as Issuing Bank, a national banking association having
a place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and FLEET
RETAIL FINANCE INC., as Administrative Agent and Collateral Agent for the
Lenders, a Delaware corporation, having its principal place of business at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and BACK BAY CAPITAL FUNDING, LLC, as
Tranche B Administrative Agent, a Delaware limited liability company, having its
principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and
CITICORP USA, INC., as Syndication Agent, a Delaware corporation, having its
principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ in
consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
As used in this Agreement, the following terms have the meanings specified
below:
"ACH" shall mean automated clearing house transfers.
"Account" shall mean any right to payment for goods sold or leased or for
services rendered, whether or not earned by performance, or any right to payment
for credit extended for goods sold or leased or services rendered.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means FRF, in its capacity as administrative agent
for the Lenders hereunder.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" shall mean collectively, the Administrative Agent, the Collateral
Agent and the Tranche B Administrative Agent.
"Alternate Base Rate" shall mean, for any day, the higher of (a) the annual
rate of interest then most recently announced by Fleet at its head office in
Boston, Massachusetts as its "Base Rate" and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% (0.50%) per annum. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations thereof in accordance with
the terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in Fleet's Base Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in Fleet's Base Rate or
the Federal Funds Effective Rate, respectively.
48
"Applicable Margin" means initially, the rates for Base Rate Loans and
Eurodollar Loans, set forth in Level II, below:
----------- ----------------------- ---------------------- ---------------------
Level Performance Criteria Base Rate Loans Eurodollar Loans
----------- ----------------------- ---------------------- ---------------------
----------- ----------------------- ---------------------- ---------------------
1 Excess Availability 0.75% 2.75%
greater than or equal
to 35% of the
Borrowing Base
----------- ----------------------- ---------------------- ---------------------
----------- ----------------------- ---------------------- ---------------------
2 Excess Availability 1.00% 3.00%
greater than or equal
to 20% of the
Borrowing Base but
less than 35% of the
Borrowing Base
----------- ----------------------- ---------------------- ---------------------
----------- ----------------------- ---------------------- ---------------------
3 Excess Availability 1.25% 3.25%
less than 20% of the
Borrowing Base
----------- ----------------------- ---------------------- ---------------------
The Applicable Margin shall be adjusted quarterly as of the first day of each
fiscal quarter, commencing with the fiscal quarter ending November 30, 2001,
based upon the average Excess Availability for the immediately preceding fiscal
quarter. The Applicable Margin shall be the rate set forth in that level in
which both (i) the average daily Excess Availability requirement for the
previous fiscal quarter is met, and (ii) the Excess Availability requirement on
the first day of the applicable fiscal quarter is met; if only one of the
foregoing requirements is met, the Applicable Margin shall be that set forth in
the higher level (with Level 3 being the highest level and Level 1 the lowest).
Upon the occurrence of an Event of Default, interest shall accrue at the rate
set forth in Section 2.10.
Notwithstanding anything to the contrary herein contained, if Excess
Availability is less than 20% of the Borrowing Base for five (5) consecutive
Business Days, the Applicable Margin shall immediately be adjusted to that rate
set forth in Level 3 and shall remain at such rate (regardless of actual Excess
Availability) until Excess Availability has exceeded 20% of the Borrowing Base
for thirty (30) consecutive days.
"Appraised Value" means the net appraised liquidation value of the Loan
Parties' Inventory as set forth in the Loan Parties'stock ledger (expressed as a
percentage of the Cost of such Inventory) as determined from time to time by the
Administrative Agent in accordance with its standard procedures and with the
assistance of an independent appraiser satisfactory to the Administrative Agent.
"Arranger" means FBRS.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Availability Reserves" means such reserves as the Administrative Agent
from time to time determines in the Administrative Agent's reasonable discretion
as being appropriate to reflect the impediments to the Agents' ability to
realize upon the Collateral.
"Base Rate Loan" shall mean any Tranche A Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Blocked Account Agreements" has the meaning set forth in Section 2.21(c).
"Blocked Account Banks" shall mean the banks with whom the Loan Parties
have entered into Blocked Account Agreements.
"Blocked Accounts" shall have the meaning set forth in Section 2.21(c).
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
49
"Borrowing" shall mean (a) the incurrence of Tranche A Loans of a single
Type or of Tranche B Loans, as the case may be, on a single date and having, in
the case of Eurodollar Loans, a single Interest Period, or (b) a Swingline Loan.
"Borrowing Base" means, at any time of calculation, subject to the
provisions of Section 2.02 hereof, an amount equal to
(a) subject to the second proviso to this definition, the Receivables
Advance Rate of (i) the face amount of Eligible Receivables minus (ii)
Receivables Reserves, plus
(b) the lesser of (i) 85% of the Appraised Value of Eligible Inventory,
or (ii) the Inventory Advance Rate of (A) the Cost of Eligible
Inventory minus (B) Inventory Reserves; plus
(c) the lesser of (i) the sum of (A) 60% of the FLV of Eligible Fee
Real Estate less Realty Reserves arising from sales or dispositions of
Eligible Fee Real Estate, plus (B) 25% of the FLV of Eligible Leasehold
Real Estate less Realty Reserves arising from sales or dispositions of
Eligible Leasehold Real Estate, or (ii) $25,000,000; minus
(d) the then amount of all Availability Reserves, minus
(e) the Carve Out, minus
(f) the Loan to Value Reserve.
provided that, in no event shall amounts available to be borrowed under clause
(a), above, ever constitute more than 35% of the amounts available under clauses
(a), (b), and (c) in the aggregate, and in no event shall amounts available to
be borrowed under clause (c), above, ever constitute more than 15% of the
amounts available under clauses (a), (b), and (c) in the aggregate, and further
provided that unless the Loan Parties have requested the Agents to undertake due
diligence with respect to Eligible Receivables within thirty (30) days after the
date of entry of the Interim Borrowing Order, the provisions of clause (a) of
the definition of "Borrowing Base" shall be void and of no effect and the
Lenders shall have no obligation to make any advances based upon Eligible
Receivables.
"Borrowing Base Certificate" has the meaning assigned to such term in
Section 5.01(i).
"Borrowing Order" means an order entered by the Bankruptcy Court in the
Proceedings in such form as is agreed to by the Agents in their reasonable
discretion.
"Borrowing Request" means a request by ▇▇▇▇▇▇-▇▇▇▇▇▇ on behalf of the Loan
Parties for a Borrowing in accordance with Section 2.03.
"Breakage Costs" shall have the meaning set forth in Section 2.19(b).
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in Boston, Massachusetts are authorized or required by
law to remain closed, provided that, when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Loan Parties
that are (or would be) set forth in a consolidated statement of cash flows of
the Loan Parties for such period prepared in accordance with GAAP and (b)
Capital Lease Obligations incurred by the Loan Parties during such period.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Carve Out" shall mean $5,000,000.
"Cash Collateral Account" shall mean an interest-bearing account
established by the Loan Parties with the Collateral Agent at Fleet under the
sole and exclusive dominion and control of the Collateral Agent designated as
the "▇▇▇▇▇▇-▇▇▇▇▇▇ Cash Collateral Account".
"Cash Receipts" has the meaning provided therefor in Section 2.21(c).
50
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means, at any time, (a) occupation of a majority of the
seats (other than vacant seats) on the board of directors of ▇▇▇▇▇▇-▇▇▇▇▇▇ by
Persons who were neither (i) nominated by the board of directors of
▇▇▇▇▇▇-▇▇▇▇▇▇ nor (ii) appointed by directors so nominated; or (b) the
acquisition of forty percent (40%) or more of the capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇
by any Person or group of Persons.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.23(b), by any lending office of such Lender or by
such Lender's or the Issuing Bank's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Charges" has the meaning provided therefor in Section 9.13.
"Closing Date" means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all "Collateral", as defined in any applicable
Security Document.
"Collateral Agent" means FRF, in its capacity as collateral agent under the
Security Documents.
"Commercial Letter of Credit" means any Letter of Credit issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Loan Parties in the ordinary
course of business of the Loan Parties.
"Commitment" shall mean, with respect to each Lender, the aggregate
commitment of such Lender hereunder (for both Tranche A Loans and Tranche B
Loans) in the amount set forth opposite its name on Schedule 1.1 hereto or as
may subsequently be set forth in the Register from time to time, as the same may
be reduced from time to time pursuant to Section 2.15.
"Commitment Fee" has the meaning provided therefor in Section 2.12.
"Commitment Percentage" shall mean, with respect to each Lender, that
percentage of the Commitments of all Lenders hereunder (for both Tranche A Loans
and Tranche B Loans) in the amount set forth opposite its name on Schedule 1.1
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to Section 2.15.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "Controlling" and "Controlled" have meanings correlative thereto.
"Cost" means the average landed cost of purchases, as reported on the Loan
Parties' stock ledger, based upon the Loan Parties' accounting practices which
are in effect on the date of this Agreement. "Cost" does not include inventory
capitalization costs or other non-purchase price charges used in the Loan
Parties' calculation of cost of goods sold.
"Credit Card Notifications" has the meaning provided therefor in Section
2.21(c).
"Credit Extensions" as of any day, shall be equal to the sum of (a) the
principal balance of all Loans then outstanding, and (b) the then amount of the
Letter of Credit Outstandings.
"Customer Deposit Liability" means deposits provided by customers for
special orders of product.
"Customer Deposit Liability Reserve" means at any time of calculation, an
amount equal to 100% of the Loan Parties' Customer Deposit Liability.
"DDAs" means any checking or other demand deposit account maintained by any
Loan Party.
51
"DDA Notification" has the meaning provided therefor in Section 2.21(c).
"Default" means any event or condition that constitutes an Event of Default
or that upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
"Disbursement Accounts" shall have the meaning set forth in Section
2.21(f).
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of America.
"Eligible Fee Real Estate" shall mean any Real Estate which otherwise
constitutes Eligible Real Estate as to which
(a) either (i) a Loan Party owns fee title, or (ii) a Loan
Party is ground lessee under a ground lease the terms and conditions of
which are satisfactory to the Collateral Agent in its reasonable
discretion; and
(b) within ninety (90) days after the entry of the Interim
Borrowing Order (or, if earlier, upon the request of the Collateral
Agent after the occurrence of an Event of Default), the applicable Loan
Party has executed and delivered to the Collateral Agent such mortgages
and other documents as the Collateral Agent may reasonably request (it
being understood that during such ninety (90) day period, any Real
Estate which otherwise has satisfied the other conditions in this
definition shall be deemed Eligible Fee Real Estate); and
(c) the applicable Loan Party shall have delivered to the
Collateral Agent title insurance, environmental studies, and other real
estate items, as reasonably required by, and satisfactory to, the
Collateral Agent, including, but not limited to, those items required
by FIRREA.
"Eligible Inventory" shall mean, as of the date of determination thereof,
items of Inventory of the Loan Parties that are finished goods, merchantable and
readily saleable to the public in the ordinary course deemed by the
Administrative Agent in its reasonable discretion to be eligible for inclusion
in the calculation of the Borrowing Base. Without limiting the foregoing, unless
otherwise approved in writing by the Administrative Agent, none of the following
shall be deemed to be Eligible Inventory:
(a) Inventory that is not owned solely by the Loan Parties, or
is leased or on consignment or the Loan Parties do not have good and
valid title thereto;
(b) Inventory (including any portion thereof in transit from
vendors through a third party shipping company) that is not located at
property that is owned or leased by the Loan Parties;
(c) Inventory that represents (i) goods damaged, defective or
otherwise unmerchantable, (ii) goods that do not conform in all
material respects to the representations and warranties contained in
this Agreement or any of the Security Documents, or (iii) goods to be
returned to the vendor;
(d) Inventory that is not located in the United States of
America (excluding territories and possessions thereof);
(e) Inventory that is not subject to a perfected
first-priority security interest in favor of the Collateral Agent for
the benefit of the Secured Parties;
(f) Inventory which is the subject of store closing,
liquidation, going-out-of-business, or similar sale, as to which in
each case, the Loan Parties have received an initial payment of the
guaranteed price from the Person conducting such sale(s).
(g) Inventory which consists of samples, labels, bags,
packaging, and other similar non-merchandise categories.
(h) Inventory as to which insurance in compliance with the
provisions of Section 5.07 hereof is not in effect.
(i) Inventory which has been sold but not yet delivered or as
to which any Loan Party has accepted a deposit.
52
"Eligible Leasehold Real Estate" shall mean any Real Estate which is leased
to any Loan Party (other than under ground leases), which lease has a FLV of at
least $500,000 and otherwise constitutes Eligible Real Estate and as to which
the applicable Loan Party has executed and delivered to the Collateral Agent
such mortgages and other documents as the Collateral Agent may reasonably
request, and shall have delivered to the Collateral Agent title insurance,
environmental studies, and other real estate items, as reasonably required by
the Collateral Agent, including, but not limited to, those items required by
FIRREA; provided that the Loan Parties shall not be obligated to deliver such
mortgages, title insurance, environmental studies and other real estate items
unless and until the Agents so request (which request may be made at any time,
whether or not a Default or Event of Default exists, provided that in no event
shall the Loan Parties be obligated to so deliver such items before the
expiration of ninety (90) days after the entry of the Interim Borrowing Order
unless an Event of Default has occurred, in which event the Loan Parties will
deliver mortgages upon the request of the Collateral Agent).
"Eligible Real Estate" means collectively, Eligible Fee Real Estate and
Eligible Leasehold Real Estate which satisfies each of the following conditions:
(a) the Collateral Agent has a perfected first-priority lien
in such properties for the benefit of the Secured Parties; and
(b) each of such properties have been appraised by a third
party appraiser acceptable to the Collateral Agent; and
(c) the Real Estate (i) is used by a Loan Party for offices or
as a distribution center, or (ii) is or was used by a Loan Party for
the conduct of a retail store business or offices, or as to owned Real
Estate or Real Estate which is the subject of a ground lease, is income
producing property, provided however, no Real Estate which was
previously used by a Loan Party for the operation of a retail store or
offices which is no longer in operation and is "dark" shall be eligible
for borrowing unless such Real Estate is actively being marketed for
sale in a commercially reasonable manner and has been so marketed for
no more than six months; and
(d) as to any particular property, as to which the mortgagor
is in compliance with the representations, warranties and covenants set
forth in the Mortgage relating to such property, unless the
Administrative Agent, in its discretion, otherwise determines to waive
this requirement in the determination of Eligible Real Estate.
"Eligible Receivables" shall mean, as of the date of determination thereof,
such Accounts of the Loan Parties as the Administrative Agent, in its sole
discretion exercised in a commercially reasonable manner in accordance with
customary business practices, shall from time to time elect to consider Eligible
Receivables for purposes of this Agreement. The value of such Accounts shall be
determined by the Administrative Agent in its sole discretion exercised in a
commercially reasonable manner in accordance with customary business practices
and taking into consideration, among other factors, their book value determined
in accordance with GAAP. Notwithstanding the foregoing, none of the following
shall be deemed to be Eligible Receivables:
(a) Accounts for which a payment has not been made for two
consecutive 30 day billing cycles;
(b) Accounts which are owed by any Person liable on any
account described in clause (a) above.
(c) Accounts with respect to which the Loan Parties do not
have good, valid and marketable title thereto, free and clear of any
Lien (other than Liens granted to the Collateral Agent, for its benefit
and the ratable benefit of the other Secured Parties, pursuant to the
Loan Documents) or as to which the Collateral Agent does not have a
valid and perfected first priority Lien;
(d) Accounts which are disputed, are with recourse, or with
respect to which a claim, counterclaim, offset or chargeback has been
asserted;
(e) Accounts which arise out of any sale made on a "▇▇▇▇ and
hold," guaranteed sale, sale-or-return, sale on approval, consignment,
dating, or delayed shipping basis.
53
(f) Accounts which are owed by any account debtor who is not a
resident of the United States or the District of Columbia.
(g) Accounts which are owed by any Affiliate of any Loan Party
or any of its Subsidiaries.
(h) Accounts which are owed by any person employed by, or a
salesperson of, the Loan Parties.
(i) Accounts arising out of sales not made in the ordinary
course of business of the Loan Parties.
(j) Accounts on terms other than those normal or customary in
the business of the Loan Parties;
(k) Accounts owing from a Person who is also a supplier to or
creditor of any Loan Party; or representing any manufacturer's or
supplier's credits, discounts, incentive plans, or similar arrangements
entitling any Loan Party to discounts or future purchases therefrom;
(l) Accounts which are generated from any store of a Loan
Party which is not then open for business in the ordinary course;
(m) Accounts which the Administrative Agent determines in its
reasonable discretion to be uncertain of collection; and
(n) Accounts which the Administrative Agent in its sole
discretion considers unacceptable for any reason.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
handling, treatment, storage, disposal, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Loan Party directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with ▇▇▇▇▇▇-▇▇▇▇▇▇, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by ▇▇▇▇▇▇-▇▇▇▇▇▇ or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by ▇▇▇▇▇▇-▇▇▇▇▇▇ or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
▇▇▇▇▇▇-▇▇▇▇▇▇ or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g)
the receipt by ▇▇▇▇▇▇-▇▇▇▇▇▇ or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from ▇▇▇▇▇▇-▇▇▇▇▇▇ or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
54
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Tranche A Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" has the meaning assigned to such term in Section 7.01.
"Excess Availability" means, as of any date of determination, after giving
effect to all accounts payable arising subsequent to the commencement of the
Proceedings which are more than fifteen (15) days beyond credit terms then
accorded the Loan Parties (other than those payables which are disputed by the
Loan Parties in good faith), and overdrafts created, or authorized to be paid,
subsequent to the commencement of the Proceedings, the excess, if any, of (a)
the lesser of the Borrowing Base or the aggregate Tranche A Commitments, over
(b) the outstanding Tranche A Credit Extensions.
"Excluded Taxes" means, with respect to the Agents, any Lender, the Issuing
Bank or any other recipient of any payment to be made by or on account of any
obligation of the Loan Parties hereunder, (a) income or franchise taxes imposed
on (or measured by) its gross or net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which any Loan Party is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by a Loan Party under
Section 2.28(b), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.26(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Loan
Parties with respect to such withholding tax pursuant to Section 2.26(a).
"FBRS" means FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., a Massachusetts
corporation.
"FLV" means, as to any Eligible Real Estate, the forced liquidation value
of such Eligible Real Estate determined in accordance with an independent
appraisal acceptable to the Administrative Agent.
"FRF" means Fleet Retail Finance Inc., a Delaware corporation.
"FRF Concentration Account" shall have the meaning set forth in Section
2.21(c).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by Fleet from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the letter entitled "Fee Letter" among the Loan Parties
and the Administrative Agent of even date herewith, as such letter may from time
to time be amended.
"Final Borrowing Order" means the Borrowing Order entered in the
Proceedings after notice and a final hearing pursuant to Rule 4001(c) of the
Federal Rules of Bankruptcy Procedure.
"Financial Officer" means, with respect to any Loan Party, the chief
financial officer, vice president-finance, or treasurer of such Loan Party.
"First Day Orders" means orders presented to the Bankruptcy Court in the
Proceedings for consideration on the first day of the Proceedings, whether or
not entered by the Bankruptcy Court on the first day of the Proceedings or
thereafter.
"Fleet" means Fleet National Bank, a national banking association.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Loan Parties are located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
55
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia.
"Fronting Fee" has the meaning assigned to such term in Section 2.13(b).
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.
"▇▇▇▇▇▇-▇▇▇▇▇▇" means ▇▇▇▇▇▇-▇▇▇▇▇▇ Company, a Virginia corporation.
"▇▇▇▇▇▇-▇▇▇▇▇▇ Master Trust" means that certain Amended and Restated Master
Pooling and Servicing Agreement dated as of February 23, 1998 by and among
MacSaver Funding Corporation, ▇▇▇▇▇▇-▇▇▇▇▇▇, and First Union National Bank, as
Trustee, as amended and in effect.
"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, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning provided therefor in Section 9.03(b).
"Information" has the meaning provided therefor in Section 9.12.
56
"Interest Payment Date" means (a) with respect to any Base Rate Loan
(including a Swingline Loan), the last day of each calendar month, and (b) with
respect to any Eurodollar Loan, the last day of each calendar month and the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, or three months
thereafter, as ▇▇▇▇▇▇-▇▇▇▇▇▇ may elect, provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period, and (c) any Interest Period which would otherwise
end after the Maturity Date shall end on the Maturity Date. For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing is
made and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Interim Borrowing Order" means the Borrowing Order entered in the
Proceedings prior to notice and a final hearing pursuant to Rule 4001(c) of the
Federal Rules of Bankruptcy Procedure.
"Inventory" has the meaning assigned to such term in the Security
Agreement.
"Inventory Advance Rate" means 64% (or such higher rate as the
Administrative Agent may establish, in its discretion, to reflect seasonal
increases, if any, in the Appraised Value of Eligible Inventory, provided that
such higher rate shall in no event exceed 85% of the Appraised Value of Eligible
Inventory).
"Inventory Reserves" means such Reserves as may be established from time to
time by the Administrative Agent in the Administrative Agent's reasonable
discretion with respect to changes in the determination of the saleability, at
retail, of the Eligible Inventory or which reflect such other factors as
negatively affect the market value of the Eligible Inventory. Without limiting
the generality of the foregoing, Inventory Reserves may include (but are not
limited to) reserves based on (i) obsolescence; (ii) seasonality; (iii) Shrink;
(iv) imbalance; (v) change in Inventory character; (vi)change in Inventory
composition; (vii) change in Inventory mix; (viii)markdowns (both permanent and
point of sale); (ix) retail markons and markups inconsistent with prior period
practice and performance; industry standards; current business plans; or
advertising calendar and planned advertising events.
"Issuing Bank" means Fleet, in its capacity as the issuer of Letters of
Credit hereunder, and any successor to Fleet in such capacity as selected by the
Administrative Agent. The Issuing Bank may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term "Issuing Bank" shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.
"L/C Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"Lenders" shall mean the Persons identified on Schedule 1.1 hereto and each
assignee that becomes a party to this Agreement as set forth in Section 9.04(b).
"Letter of Credit" shall mean a letter of credit that is (i) issued
pursuant to this Agreement for the account of any Loan Party, (ii) a Standby
Letter of Credit or Commercial Letter of Credit, (iii) issued in connection with
the purchase of Inventory by any Loan Party and for other purposes for which a
Loan Party has historically obtained letters of credit, or for any other purpose
that is reasonably acceptable to the Administrative Agent, and (iv) in form and
substance reasonably satisfactory to the Issuing Bank.
"Letter of Credit Fees" shall mean the fees payable in respect of Letters
of Credit pursuant to Section 2.13.
"Letter of Credit Outstandings" shall mean, at any time, the sum of (a)
with respect to Letters of Credit outstanding at such time, the aggregate
maximum amount that then is or at any time thereafter may become available for
drawing or payment thereunder plus (b) all amounts theretofore drawn or paid
under Letters of Credit for which the Issuing Bank has not then been reimbursed.
57
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Telerate Page 3750, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be that rate of interest
(rounded upwards, if necessary to the next 1/16 of 1%) determined by the
Administrative Agent to be the highest prevailing rate per annum at which
deposits in dollars are offered to Fleet by first class banks in the London
interbank market in which Fleet participates at 10:00 a.m. (Boston time) not
less than two Business Days before the first day of the Interest Period for the
subject Eurodollar Borrowing, for a deposit approximately in the amount of the
subject Borrowing and for a period of time approximately equal to such Interest
Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Line Fee" means a fee equal to 0.50% per annum (on the basis of actual
days elapsed in a year of 360 days) of the average daily balance of the
difference between (x) each Tranche A Lender's Tranche A Commitment and (y) the
sum of (i) such Tranche A Lender's Tranche A Commitment Percentage of the
principal amount of Tranche A Loans then outstanding, and (ii) such Tranche A
Lender's Tranche A Commitment Percentage of the then Letter of Credit
Outstandings for each day commencing on the date hereof and ending on but
excluding the Termination Date.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit,
the Fee Letter, the Tranche B Fee Letter, the Structuring Fee Letter, all
Borrowing Base Certificates, the Blocked Account Agreements, the DDA
Notifications, the Credit Card Notifications, the Security Documents, and any
other instrument or agreement executed and delivered in connection therewith.
"Loan Parties" means ▇▇▇▇▇▇-▇▇▇▇▇▇ and the Subsidiary Loan Parties.
"Loan To Value Reserve" means (a) until receipt of a business plan in
conformity with the provisions of Section 5.01(g), a reserve in an amount equal
to the excess of the Credit Extensions (exclusive of any Loans based upon
Eligible Receivables and/or Eligible Real Estate) over 90% of the Appraised
Value of Eligible Inventory (net of Reserves (excluding this Loan to Value
Reserve) and the Carve Out) at any time of calculation, and (b) after receipt of
a business plan in conformity with the provisions of Section 5.01(g), a reserve
in an amount equal to the excess of the Credit Extensions (exclusive of any
Loans based upon Eligible Receivables and/or Eligible Real Estate) over 92% of
the Appraised Value of Eligible Inventory (net of Reserves (excluding this Loan
to Value Reserve) and the Carve Out) at any time of calculation.
"Loans" shall mean all loans (including, without limitation, Swingline
Loans) at any time made to the Loan Parties or for account of the Loan Parties
pursuant to this Agreement, whether constituting Tranche A Loans or Tranche B
Loans.
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, assets, or condition, financial or otherwise, of the Loan
Parties taken as a whole, other than any material adverse effect arising solely
by virtue of the commencement of the Proceedings, or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit) of any one or more of the Loan Parties in an aggregate
principal amount exceeding $5,000,000.
"Maturity Date" means September 30, 2000, unless the Final Borrowing Order
is entered by that date (which order shall not then have been stayed, modified,
appealed, reversed or otherwise affected), and if the Final Borrowing Order is
so entered, "Maturity Date" shall mean August 16, 2002.
"Maximum Rate" has the meaning provided therefor in Section 9.13.
58
"Merchandise Credit Liability" means, at any time, the aggregate face value
at such time of outstanding merchandise credits and gift certificates, if any,
of the Loan Parties.
"Merchandise Credit Liability Reserve" means at any time of calculation, an
amount equal to 50% of the Loan Parties' Merchandise Credit Liability.
"Minority Lenders" has the meaning provided therefor in Section 9.02(d).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgages" means the Mortgages, Security Agreements and Assignments
between the Loan Party owning the real property encumbered thereby and the
Collateral Agent for the benefit of the Secured Parties.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event, (a) the cash proceeds
received in respect of such event, including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, in each case net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses (including appraisals, and
brokerage, legal, title and recording tax expenses and commissions) paid by any
Loan Party or Subsidiary to third parties (other than Affiliates) in connection
with such event, and (ii) in the case of a sale or other disposition of an asset
(including pursuant to a casualty or condemnation), the amount of all payments
required to be made by the Loan Parties and the Subsidiaries as a result of such
event to repay (or to establish an escrow for the repayment of) Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, or a Permitted Encumbrance that is senior
to the Lien of the Collateral Agent, and (iii) as long as no Default then
exists, capital gains or other income taxes paid or payable as a result of any
such sale or disposition (after taking into account any available tax credits or
deductions).
"Noncompliance Notice" has the meaning provided therefor in Section
2.05(b).
"Non-Concentrated Proceeds" means proceeds of any Collateral in which a
valid, enforceable security interest has been granted under the Pre-Petition
Security Agreement (but only to the extent such security interest has not been
avoided), and proceeds of any retail installment sale contract transferred to
the ▇▇▇▇▇▇-▇▇▇▇▇▇ Master Trust.
"Notes" means, collectively, the Tranche A Notes and the Tranche B Notes.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Other Taxes" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Overadvance" means, at any time of calculation, a circumstance in which
the Tranche A Credit Extensions exceed the lesser of (a) the Tranche A
Commitments or (b) the Borrowing Base.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to the
Security Agreement or any other form approved by the Collateral Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05, or payment of which is
stayed by the commencement of the Proceedings;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with
Section 5.05, or payment of which is stayed by the commencement of the
Proceedings;
59
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Loan Parties or
any Subsidiary; and
(g) other Liens perfected (but not granted) after the
commencement of the Proceedings to the extent that such
post-commencement date perfection in respect of pre-commencement date
claims is expressly permitted under the Bankruptcy Code.
provided that, except as provided in any one or more of clauses (a) through (f)
above, the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
▇▇▇▇▇'▇;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and demand
deposit and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
(without regard to the limitation on maturity contained in such clause)
and entered into with a financial institution satisfying the criteria
described in clause (c) above or with any primary dealer.
"Permitted Overadvance" means an Overadvance determined by the
Administrative Agent, in its reasonable discretion, (a) which is made to
maintain, protect or preserve the Collateral and/or the Lenders' rights under
the Loan Documents, or (b) which is otherwise in the Lenders' interests;
provided that Permitted Overadvances shall not (i) exceed $5,000,000 in the
aggregate outstanding at any time or (ii) remain outstanding for more than
twenty (20) consecutive Business Days, unless in either case the Required
Supermajority Lenders otherwise agree; and provided further that the foregoing
shall not (1) modify or abrogate any of the provisions of Section 2.06(f) hereof
regarding the Tranche A Lender's obligations with respect to L/C Disbursements,
or (2) result in any claim or liability against the Administrative Agent
(regardless of the amount of any Overadvance) for "inadvertent Overadvances"
(i.e. where an Overadvance results from changed circumstances beyond the control
of the Administrative Agent (such as a reduction in the collateral value)).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PIK Interest" has the meaning set forth in Section 2.09(b)(i).
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"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which ▇▇▇▇▇▇-▇▇▇▇▇▇ or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement dated as of August 16, 2000
among the Loan Parties, the other Subsidiaries party thereto and the Collateral
Agent for the benefit of the Secured Parties, as amended and in effect from time
to time.
"Prepayment Event" means any of the following events:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset
of a Loan Party or any Subsidiary, other than any sale, transfer or
other disposition permitted by Sections 6.05 (a)(i) or (b);
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of a Loan Party, unless (i) the proceeds
therefrom are required to be paid to the holder of a Lien on such
property or asset having priority over the Lien of the Collateral
Agent, or (ii) the proceeds therefrom are utilized for purposes of
replacing or repairing the assets in respect of which such proceeds,
awards or payments were received within 12 months of the occurrence of
the damage to or loss of the assets being repaired or replaced.;
(c) the issuance by a Loan Party or any Subsidiary of any
equity securities, other than any such issuance of equity securities to
▇▇▇▇▇▇-▇▇▇▇▇▇ or a Subsidiary; or
(d) the incurrence by a Loan Party or any Subsidiary of any
Indebtedness of the type described in clause (a), (b) or (c) of the
definition of the term "Indebtedness", other than Indebtedness
permitted by Section 6.01(a)(i) through (viii).
"Pre-Petition Security Agreement" means the Security Agreement dated as of
May 25, 2000 among MacSaver Financial Services, Inc., ▇▇▇▇▇▇-▇▇▇▇▇▇,
▇▇▇▇▇▇-▇▇▇▇▇▇ Furniture Company and Wachovia Bank, N.A., as Collateral Agent,
and all instruments, documents and agreements executed in connection therewith,
each as amended and in effect as of the date of the commencement of the
Proceedings.
"Proceedings" means the cases, pursuant to Chapter 11 of the Bankruptcy
Code, initiated by the Loan Parties in the United States Bankruptcy Court for
the Eastern District of Virginia (Case Nos.00-34533 through 00-34536).
"Real Estate Availability" means the amounts available to be borrowed under
clause (c) of the definition of Borrowing Base (after giving effect to the
proviso in such definition).
"Real Estate"means the land, together with the buildings, structures,
parking areas, and other improvements thereon, now or hereafter owned or leased
by any Loan Party, including all easements, rights-of-way, and similar rights
relating thereto and all leases, tenancies, and occupancies thereof.
"Realty Reserves" means an amount equal to 10% of the lesser of the FLV or
gross sales price of any Eligible Fee Real Estate or Eligible Leasehold Real
Estate, as applicable, which is sold or otherwise disposed of by such Loan Party
after the Closing Date.
"Receivables Advance Rate" means zero until the Administrative Agent has
completed its due diligence with respect to the Loan Parties' Accounts, has
received the business plan in conformity with Section 5.01(g) hereof, and the
Final Borrowing Order has been entered in the Proceedings ( which order shall
not have been stayed, modified, appealed, reversed or otherwise affected), and
thereafter, such percentage as the Agents shall establish in their discretion.
"Receivables Reserves" means such Reserves as may be established from time
to time by the Administrative Agent in the Administrative Agent's reasonable
business judgment with respect to the determination of the collectability in the
ordinary course and of the creditworthiness of the Eligible Receivables.
"Register" has the meaning set forth in Section 9.04(c).
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
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"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" has the meaning set forth in Section 101(22) of CERCLA.
"Release Price" means as to any Eligible Real Estate, the Net Proceeds
which are required to be realized in order for the Lien of the Collateral Agent
to be released therefrom in connection with a sale of such Eligible Real Estate,
such Release Price being an amount equal to 85% of the FLV of such Eligible Fee
Real Estate and 70% of the FLV of such Eligible Leasehold Real Estate, provided
that if the Net Proceeds from any such Eligible Fee Real Estate are greater than
or equal to 60% of the FLV of such Eligible Fee Real Estate but less than 85% of
the FLV of such Eligible Fee Real Estate, the Release Price shall be subject to
the approval of the Agents, and provided further that if the Net Proceeds from
any such Eligible Fee Real Estate are less than 60% of the FLV of such Eligible
Fee Real Estate, the Release Price shall be subject to the approval of the
Required Lenders, provided further that if the Net Proceeds from any such
Eligible Leasehold Real Estate are greater than or equal to 25% of the FLV of
such Eligible Leasehold Real Estate but less than 70% of the FLV of such
Eligible Leasehold Real Estate, the Release Price shall be subject to the
approval of the Agents, and provided further that if the Net Proceeds from any
such Eligible Leasehold Real Estate are less than 25% of the FLV of such
Eligible Leasehold Real Estate, the Release Price shall be subject to the
approval of the Required Lenders.
"Required Lenders" shall mean, at any time, Lenders having Commitments at
least equal to 51% of the Commitments, or if the Commitments have been
terminated, Lenders whose percentage of the outstanding Obligations (after
settlement and repayment of all Swingline Loans by the Tranche A Lenders)
aggregate not less than 51% of all such Obligations.
"Required Supermajority Lenders" shall mean, at any time, Tranche A Lenders
having Tranche A Commitments outstanding representing at least 66 2/3% of the
total Tranche A Commitments outstanding and Tranche B Lenders having Tranche B
Loans outstanding representing at least 66 2/3% of the total Tranche B Loans
outstanding; provided, however, that if the Tranche A Commitments have been
terminated, Required Supermajority Lenders, as to Tranche A, shall be those
Tranche A Lenders having Tranche A Loans outstanding representing at least 66
2/3% of the total Tranche A Loans outstanding.
"Required Tranche A Lenders" shall mean, at any time, Tranche A Lenders
having Tranche A Commitments outstanding representing at least 51% of the total
Tranche A Commitments outstanding; provided, however, that if the Tranche A
Commitments have been terminated, Required Tranche A Lenders shall be those
Tranche A Lenders having Tranche A Loans outstanding representing at least 51%
of the total Tranche A Loans outstanding.
"Required Tranche B Lenders" shall mean, at any time, Tranche B Lenders
having Tranche B Loans outstanding representing at least 51% of the total
Tranche B Loans outstanding.
"Reserves" means the Loan to Value Reserve and all (if any) Realty
Reserves, Inventory Reserves, Receivables Reserves and Availability Reserves.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of any Loan Party or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any such shares of capital stock of a member of
any Loan Party or any Subsidiary or any option, warrant or other right to
acquire any such shares of capital stock of any Loan Party or any Subsidiary.
"S&P" means Standard & Poor's.
"Secured Parties" has the meaning assigned to such term in the Security
Agreement.
"Security Agreement" means the Security Agreement dated as of August 16,
2000 among the Loan Parties and the Collateral Agent for the benefit of the
Secured Parties, as amended and in effect from time to time.
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"Security Documents" means the Security Agreement, the Pledge Agreement,
the Mortgages, and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.14 to secure any of the
Obligations.
"Settlement Date" has the meaning provided in Section 2.07(b) hereof.
"Shrink" means Inventory identified by the Loan Parties as lost, misplaced
or stolen Inventory.
"Shrink Reserve" means an amount equal to $6,000,000.
"Standby Letter of Credit" means any Letter of Credit other than a
Commercial Letter of Credit.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Structuring Fee Letter" means the letter entitled "Structuring Fee Letter"
among the Loan Parties and FBRS of even date herewith, as such letter may from
time to time be amended.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary Loan Party" means any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇ other than
(a) a Foreign Subsidiary, (b) MacSaver Insurance Company, and (c) MacSaver
Funding Corporation.
"Swingline Lender" means FRF, in its capacity as lender of Swingline Loans
hereunder.
"Swingline Loan" shall mean a Tranche A Loan made by the Swingline Lender
to the Loan Parties pursuant to Section 2.05 hereof.
"Syndication Agent" means Citicorp USA, Inc., in its capacity as
syndication agent for the Lenders hereunder.
"Taxes" means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Termination Date" shall mean the earliest to occur of (i) the Maturity
Date, (ii) the date on which the maturity of the Loans are accelerated and the
Commitments are terminated, or (iii) the date of substantial consummation (as
defined in Section 1101 of the Bankruptcy Code) of a plan of reorganization in
the Proceedings that has been confirmed pursuant to an order of the Bankruptcy
Court in the Proceedings.
"Total Commitment" shall mean, at any time, the sum of the Commitments at
such time.
"Tranche A Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder set forth as its Tranche A Commitment
opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in
the Register from time to time, as the same may be reduced from time to time
pursuant to Section 2.15.
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"Tranche A Commitment Percentage" shall mean at any time, with respect to
each Lender, the percentage obtained by dividing its Tranche A Commitment at
such time by all Tranche A Commitments at such time.
"Tranche A Credit Extensions" as of any day, shall be equal to the sum of
(a) the principal balance of all Tranche A Loans then outstanding and (b) the
then amount of the Letter of Credit Outstandings.
"Tranche A Lender" shall mean each Lender having a Tranche A Commitment as
set forth on Schedule 1.1 hereto or in the Assignment and Acceptance by which it
becomes a Lender.
"Tranche A Loans" shall mean all loans at any time made by any Tranche A
Lender pursuant to Section 2.03 or Section 2.07 (a) and, to the extent
applicable, shall include Swingline Loans made by the Swingline Lender pursuant
to Section 2.06.
"Tranche A Notes" shall mean (i) the promissory notes of the Loan Parties
substantially in the form of Exhibit C-1, each payable to the order of a Tranche
A Lender, evidencing the Tranche A Loans, and (ii) the promissory note of the
Loan Parties substantially in the form of Exhibit C- 2, payable to the Swingline
Lender, evidencing the Swingline Loans.
"Tranche B Administrative Agent" means Back Bay Capital Funding, LLC.
"Tranche B Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder set forth as its Tranche B Commitment
opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in
the Register from time to time, as the same may be reduced from time to time
pursuant to Section 2.15.
"Tranche B Commitment Fee" has the meaning set forth in the Tranche B Fee
Letter.
"Tranche B Commitment Percentage" shall mean at any time, with respect to
each Lender, the percentage obtained by dividing its Tranche B Commitment at
such time by all Tranche B Commitments at such time.
"Tranche B Fee Letter" means the letter entitled "Tranche B Fee Letter"
among the Loan Parties and the Agents of even date herewith, as such letter may
from time to time be amended.
"Tranche B Interest Payment Date" has the meaning set forth in Section
2.09(b)(ii).
"Tranche B Interest Rate" means 16.5% per annum.
"Tranche B Lender" shall mean each Lender having a Tranche B Commitment as
set forth on Schedule 1.1 hereto or in the Assignment and Acceptance by which it
becomes a Lender.
"Tranche B Loans" shall mean all loans at any time made by any Tranche B
Lender pursuant to Section 2.01(b) and shall include any PIK Interest which is
capitalized pursuant to the provisions of Section 2.09(b).
"Tranche B Notes" shall mean the promissory notes of the Loan Parties,
substantially in the form of Exhibit C-3, each payable to the order of a Tranche
B Lender, evidencing the Tranche B Loans.
"Type", when used in reference to any Tranche A Loan or Borrowing, refers
to whether the rate of interest on such Tranche A Loan, or on the Tranche A
Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO
Rate or the Alternate Base Rate.
"Unused Tranche A Commitment" shall mean, on any day, (a) the then
aggregate amount of the Tranche A Commitments minus (b) the sum of (i) the
principal amount of Tranche A Loans then outstanding (including the principal
amount of Swingline Loans then outstanding) and (ii) the then Letter of Credit
Outstandings.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
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Section 1.2 Terms Generally
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.3 Accounting Terms; GAAP
Except as otherwise expressly provided herein, all terms of an accounting
or financial nature shall be construed in accordance with GAAP, as in effect on
the Closing Date, provided that, if the Loan Parties notify the Administrative
Agent that the Loan Parties request an amendment to any provision hereof to
reflect the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Loan Parties that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such provision shall have been amended in accordance herewith.
ARTICLE II
AMOUNT AND TERMS OF CREDIT
Section 2.1 Commitment of the Lenders
(a) Each Tranche A Lender severally and not jointly with any other Lender,
agrees, upon the terms and subject to the conditions herein set forth, to extend
credit to the Loan Parties on a revolving basis, in the form of Tranche A Credit
Extensions and in an amount not to exceed the lesser of such Lender's Tranche A
Commitment or such Tranche A Lender's Tranche A Commitment Percentage of the
Borrowing Base, subject to the following limitations:
(i) The aggregate outstanding amount of the Tranche A Credit Extensions
and Swingline Loans shall not at any time exceed the lower of (i) (A)
until the entry of the Final Borrowing Order, $160,000,000, or (B)
after the entry of the Final Borrowing Order, $200,000,000 or, in each
case, any lesser amount to which the Tranche A Commitments have then
been reduced by the Loan Parties pursuant to Section 2.15, and (ii)
the then amount of the Borrowing Base, plus the aggregate amount of
cash then held in the Cash Collateral Account.
(ii) No Tranche A Lender shall be obligated to issue any Letter of Credit,
and Letters of Credit shall be available from the Issuing Bank,
subject to the ratable participation of all Tranche A Lenders, as set
forth in Section 2.06. The Loan Parties will not at any time permit
the aggregate Letter of Credit Outstandings to exceed $50,000,000.
(iii)Subject to all of the other provisions of this Agreement, Tranche A
Loans that are repaid may be reborrowed prior to the Termination Date.
No new Tranche A Credit Extension, however, shall be made to the Loan
Parties after the Termination Date.
(b) Each Tranche B Lender, severally and not jointly with any other Lender,
agrees, upon the terms and subject to the conditions herein set forth, on the
Closing Date to make Tranche B Loans to the Loan Parties in an amount equal to
such Tranche B Lender's Tranche B Commitment. The aggregate outstanding amount
of the Tranche B Loans shall not at any time exceed $15,000,000, plus the amount
of any PIK Interest which is capitalized pursuant to the provisions of Section
2.09(b) hereof. Tranche B Loans that are repaid may not be reborrowed.
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(c) Each Borrowing of Tranche A Loans (other than Swingline Loans) shall be
made by the Tranche A Lenders pro rata in accordance with their respective
Tranche A Commitments, and the Borrowing of Tranche B Loans shall be made by the
Tranche B Lenders pro rata in accordance with their respective Tranche B
Commitments. The failure of any Lender to make any Loan shall neither relieve
any other Lender of its obligation to fund its Loan in accordance with the
provisions of this Agreement nor increase the obligation of any such other
Lender.
Section 2.2 Reserves; Changes to Reserves
(a) The initial Inventory and Availability Reserves as of the date of this
Agreement are the following:
(i) Merchandise Credit Liability Reserve (an Availability Reserve)
(ii) Customer Deposit Liability Reserve (an Availability Reserve)
(iii)Shrink Reserve (an Inventory Reserve).
(iv) Other Reserves TBD after due diligence completed.
(b) The Administrative Agent may hereafter establish additional Reserves or
change any of the foregoing Reserves, in the exercise of the reasonable judgment
of the Administrative Agent, provided that such Reserves, other than the Realty
Reserve which shall be established at the time of any applicable sale of
Eligible Fee Real Estate and/or Eligible Leasehold Real Estate, shall not be
established or changed except upon not less than three (3) Business Days notice
to the Loan Parties.
Section 2.3 Making of Loans
(a) Except as set forth in Sections 2.16 and 2.24, Tranche A Loans (other
than Swingline Loans) by the Tranche A Lenders shall be either Base Rate Loans
or Eurodollar Loans as ▇▇▇▇▇▇-▇▇▇▇▇▇ on behalf of the Loan Parties may request
subject to and in accordance with this Section 2.03, provided that all Swingline
Loans shall be only Base Rate Loans. All Loans made pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, be Loans of the
same Type. Each Lender may fulfill its Commitment with respect to any Loan by
causing any lending office of such Lender to make such Loan; but any such use of
a lending office shall not affect the obligation of the Loan Parties to repay
such Loan in accordance with the terms of the applicable Note. Each Lender
shall, subject to its overall policy considerations, use reasonable efforts (but
shall not be obligated) to select a lending office which will not result in the
payment of increased costs by the Loan Parties pursuant to Section 2.23. Subject
to the other provisions of this Section 2.03 and the provisions of Section 2.24,
Borrowings of Loans of more than one Type may be incurred at the same time, but
no more than ten (10) Borrowings of Eurodollar Loans may be outstanding at any
time.
(b) ▇▇▇▇▇▇-▇▇▇▇▇▇ shall give the Administrative Agent prior telephonic
notice (thereafter confirmed in writing) of each Borrowing. Any such notice, to
be effective, must be received by the Administrative Agent not later than 11:00
a.m., Boston time, on the third Business Day in the case of Eurodollar Loans
prior to, and on the same Business Day in the case of Base Rate Loans on, which
such Borrowing is to be made. Such notice shall be irrevocable and shall specify
the amount of the proposed Borrowing (which shall be in an integral multiple of
$1,000,000, but not less than $5,000,000 in the case of Eurodollar Loans) and
the date thereof (which shall be a Business Day) and shall contain disbursement
instructions. Such notice shall specify whether the Borrowing then being
requested is to be a Borrowing of Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period with respect thereto. If no election of
Interest Period is specified in any such notice for a Borrowing of Eurodollar
Loans, such notice shall be deemed a request for an Interest Period of one
month. If no election is made as to the Type of Loan, such notice shall be
deemed a request for Borrowing of Base Rate Loans. The Administrative Agent
shall promptly notify each Lender of its proportionate share of such Borrowing
(but in any event by 12:00 noon (Boston time) if the Borrowing is to be made on
the same Business Day), the date of such Borrowing, the Type of Borrowing being
requested and the Interest Period or Interest Periods applicable thereto, as
appropriate. On the borrowing date specified in such notice, each Lender shall
make its share of the Borrowing available at the office of the Administrative
Agent at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later than 2:00 p.m.,
Boston time, in immediately available funds. Unless the Administrative Agent
shall have received notice from a Tranche A Lender prior to the proposed date of
any Borrowing that such Tranche A Lender will not make available to the
Administrative Agent such Tranche A Lender's share of such Borrowing, the
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Administrative Agent may assume that such Tranche A Lender has made such share
available on such date in accordance with this Section and may, in reliance upon
such assumption, make available to the Loan Parties a corresponding amount. In
such event, if a Tranche A Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Tranche A Lender and the Loan Parties severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Loan Parties to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Tranche A Lender, the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation or (ii) in the
case of the Loan Parties, the interest rate applicable to Base Rate Loans. If
such Tranche A Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Tranche A Lender's Loan included in such Borrowing.
Upon receipt of the funds made available by the Tranche A Lenders to fund any
borrowing hereunder, the Administrative Agent shall disburse such funds in the
manner specified in the notice of borrowing delivered by ▇▇▇▇▇▇-▇▇▇▇▇▇ and shall
use reasonable efforts to make the funds so received from the Tranche A Lenders
available to the Loan Parties no later than 4:00 p.m., Boston time.
Section 2.4 Overadvances
The Agents and the Tranche A Lenders have no obligation to make any Tranche
A Loan or to provide any Letter of Credit if an Overadvance would result. The
Administrative Agent may, in its discretion, make Permitted Overadvances without
the consent of the Lenders and each Lender shall be bound thereby. Any Permitted
Overadvances may constitute Swingline Loans. The making of any Permitted
Overadvance is for the benefit of the Loan Parties; such Permitted Overadvances
constitute Tranche A Loans and Obligations. The making of any such Permitted
Overadvances on any one occasion shall not obligate the Administrative Agent or
any Lender to make or permit any Permitted Overadvances on any other occasion or
to permit such Permitted Overadvances to remain outstanding.
Section 2.5 Swingline Loans
(a) The Swingline Lender is authorized by the Lenders, but is not
obligated, to make Swingline Loans up to $25,000,000 plus the Permitted
Overadvance in the aggregate outstanding at any time, consisting only of Tranche
A Loans (consisting of Base Rate Loans) upon a notice of Borrowing received by
the Administrative Agent and the Swingline Lender (which notice, at the
Swingline Lender's discretion, may be submitted prior to 1:00 p.m., Boston time,
on the Business Day on which such Swingline Loan is requested). Swingline Loans
shall be subject to periodic settlement with the Tranche A Lenders under Section
2.07 below.
(b) Swingline Loans may be made only in the following circumstances: (A)
for administrative convenience, the Swingline Lender may, but is not obligated
to, make Swingline Loans in reliance upon the Loan Parties' actual or deemed
representations under Section 4.02, that the applicable conditions for borrowing
are satisfied or (B) for Permitted Overadvances, or (C) if the conditions for
borrowing under Section 4.02 cannot be fulfilled, the Loan Parties shall give
immediate notice thereof to the Administrative Agent and the Swingline Lender (a
"Noncompliance Notice"), and the Administrative Agent shall promptly provide
each Lender with a copy of the Noncompliance Notice. If the conditions for
borrowing under Section 4.02 cannot be fulfilled, the Required Lenders may
direct the Swingline Lender to, and the Swingline Lender thereupon shall, cease
making Swingline Loans (other than Permitted Overadvances) until such conditions
can be satisfied or are waived in accordance with Section 9.02 hereof. Unless
the Required Lenders so direct the Swingline Lender, the Swingline Lender may,
but is not obligated to, continue to make Swingline Loans beginning one Business
Day after the Non-Compliance Notice is furnished to the Lenders, provided that
the Swingline Loans in such event shall not exceed the aggregate of $10,000,000
plus any Permitted Overadvances. Notwithstanding the foregoing, no Swingline
Loans shall be made pursuant to this subsection (b) (other than Permitted
Overadvances) if the aggregate outstanding amount of the Tranche A Credit
Extensions and Swingline Loans would exceed the lower of (i) (A) until the entry
of the Final Borrowing Order, $160,000,000, or (B) after the entry of the Final
Borrowing Order, $200,000,000 or any lesser amount to which the Tranche A
Commitments have then been reduced by the Loan Parties pursuant to Section 2.15,
and (ii) the then amount of the Borrowing Base, plus the aggregate amount of
cash then held in the Cash Collateral Account.
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Section 2.6 Letters of Credit
(a) Upon the terms and subject to the conditions herein set forth,
▇▇▇▇▇▇-▇▇▇▇▇▇ on behalf of the Loan Parties may request the Issuing Bank, at any
time and from time to time after the date hereof and prior to the Termination
Date, to issue, and subject to the terms and conditions contained herein, the
Issuing Bank shall issue, for the account of the Loan Parties one or more
Letters of Credit; provided that no Letter of Credit shall be issued if after
giving effect to such issuance (i) the aggregate Letter of Credit Outstandings
shall exceed $50,000,000, or (ii) the aggregate Tranche A Credit Extensions
(including Swingline Loans) would exceed the limitation set forth in Section
2.01(a)(i); and provided, further, that no Letter of Credit shall be issued if
the Issuing Bank shall have received notice from the Administrative Agent or the
Required Tranche A Lenders that the conditions to such issuance have not been
met.
(b) Each Standby Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance
of such Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (ii) the date that is five
Business Days prior to the Maturity Date, provided that each Standby Letter of
Credit may, upon the request of ▇▇▇▇▇▇-▇▇▇▇▇▇, include a provision whereby such
Letter of Credit shall be renewed automatically for additional consecutive
periods of 12 months or less (but not beyond the date that is five Business Days
prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary
thereof at least 30 days prior to the then-applicable expiration date that such
Letter of Credit will not be renewed.
(c) Each Commercial Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date 120 days after the date of the
issuance of such Commercial Letter of Credit and (ii) the date that is five
Business Days prior to the Maturity Date.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by the
Loan Parties in dollars on the same Business Day of any such drawing by paying
to the Administrative Agent an amount equal to such drawing not later than 12:00
noon, Boston time, on (i) the date that the Loan Parties shall have received
notice of such payment, if such notice is received prior to 10:00 a.m., Boston
time, on such date, or (ii) the Business Day immediately following the day that
the Loan Parties receive such notice, if such notice is received after 10:00
a.m., Boston time on the day of receipt, provided that ▇▇▇▇▇▇-▇▇▇▇▇▇ may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 that such payment be financed with an Base Rate Loan or
Swingline Loan in an equivalent amount and, to the extent so financed, the Loan
Parties' obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Loan or Swingline Loan. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Loan Parties by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make payment thereunder, provided that any failure to give or delay in
giving such notice shall not relieve the Loan Parties of their obligation to
reimburse the Issuing Bank and the Lenders with respect to any such payment.
(e) If the Issuing Bank shall make any L/C Disbursement, then, unless the
Loan Parties shall reimburse the Issuing Bank in full on the date such payment
is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made to but excluding the date that the Loan
Parties reimburse the Issuing Bank therefor, at the rate per annum then
applicable to Base Rate Loans, provided that, if the Loan Parties fail to
reimburse such Issuing Bank when due pursuant to paragraph (c) of this Section,
then Section 2.10 shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Tranche A Lender pursuant to paragraph (f) of
this Section to reimburse the Issuing Bank shall be for the account of such
Tranche A Lender to the extent of such payment.
(f) Immediately upon the issuance of any Letter of Credit by the Issuing
Bank (or the amendment of a Letter of Credit increasing the amount thereof), and
without any further action on the part of the Issuing Bank, the Issuing Bank
shall be deemed to have sold to each Tranche A Lender, and each such Tranche A
Lender shall be deemed unconditionally and irrevocably to have purchased from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Tranche A Lender's Tranche A Commitment
Percentage, in such Letter of Credit, each drawing thereunder and the
obligations of the Loan Parties under this Agreement and the other Loan
Documents with respect thereto. Upon any change in the Tranche A Commitments
pursuant to Section 9.04, it is hereby agreed that with respect to all Letter of
Credit Outstandings, there shall be an automatic adjustment to the
participations hereby created to reflect the new Tranche A Commitment
Percentages of the assigning and assignee Tranche A Lenders. Any action taken or
omitted by the Issuing Bank under or in connection with a Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for the Issuing Bank any resulting liability to any Tranche A Lender.
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(g) In the event that the Issuing Bank makes any L/C Disbursement and the
Loan Parties shall not have reimbursed such amount in full to the Issuing Bank
pursuant to this Section 2.06, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Tranche A Lender of such
failure, and each Tranche A Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Tranche A Lender's Tranche A Commitment Percentage of such unreimbursed payment
in dollars and in same day funds. If the Issuing Bank so notifies the
Administrative Agent, and the Administrative Agent so notifies the Tranche A
Lenders prior to 11:00 a.m., Boston time, on any Business Day, each such Tranche
A Lender shall make available to the Issuing Bank such Tranche A Lender's
Tranche A Commitment Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Tranche A Lender shall not have
so made its Tranche A Commitment Percentage of the amount of such payment
available to the Issuing Bank, such Tranche A Lender agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the
Administrative Agent for the account of the Issuing Bank at the Federal Funds
Effective Rate. Each Tranche A Lender agrees to fund its Tranche A Commitment
Percentage of such unreimbursed payment notwithstanding a failure to satisfy any
applicable lending conditions or the provisions of Sections 2.01 or 2.06, or the
occurrence of the Termination Date. The failure of any Tranche A Lender to make
available to the Issuing Bank its Tranche A Commitment Percentage of any payment
under any Letter of Credit shall neither relieve any Tranche A Lender of its
obligation hereunder to make available to the Issuing Bank its Tranche A
Commitment Percentage of any payment under any Letter of Credit on the date
required, as specified above, nor increase the obligation of such other Tranche
A Lender. Whenever any Tranche A Lender has made payments to the Issuing Bank in
respect of any reimbursement obligation for any Letter of Credit, such Tranche A
Lender shall be entitled to share ratably, based on its Tranche A Commitment
Percentage, in all payments and collections thereafter received on account of
such reimbursement obligation.
(h) Whenever the Loan Parties desire that the Issuing Bank issue a Letter
of Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), ▇▇▇▇▇▇-▇▇▇▇▇▇ shall give to the Issuing Bank and the Administrative
Agent at least two Business Days' prior written (including telegraphic, telex,
facsimile or cable communication) notice (or such shorter period as may be
agreed upon in writing by the Issuing Bank and ▇▇▇▇▇▇ ▇▇▇▇▇) specifying the date
on which the proposed Letter of Credit is to be issued, amended, renewed or
extended (which shall be a Business Day), the stated amount of the Letter of
Credit so requested, the expiration date of such Letter of Credit, the name and
address of the beneficiary thereof, and the provisions thereof. If requested by
the Issuing Bank, the Loan Parties shall also submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for the issuance, amendment, renewal or extension of a Letter of Credit.
(i) The obligations of the Loan Parties to reimburse the Issuing Bank for
any L/C Disbursement shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Loan Parties shall be without prejudice to, and shall not constitute a waiver
of, any rights the Loan Parties might have or might acquire as a result of the
payment by the Issuing Bank of any draft or the reimbursement by the Loan
Parties thereof): (i) any lack of validity or enforceability of any Letter of
Credit; (ii) the existence of any claim, setoff, defense or other right which
the Loan Parties may have at any time against a beneficiary of any Letter of
Credit or against any of the Lenders, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated transaction; (iii) any
draft, demand, certificate or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; (iv) payment
by the Issuing Bank of any Letter of Credit against presentation of a demand,
draft or certificate or other document which does not comply with the terms of
such Letter of Credit; (v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Loan Parties' obligations hereunder; or
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(vi) the fact that any Event of Default shall have occurred and be continuing.
None of the Administrative Agent, the Lenders, the Issuing Bank or any of their
Affiliates shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank, provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Loan Parties to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Loan Parties to the extent permitted by applicable law)
suffered by the Loan Parties that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
that appear on their face to be in compliance with the terms of a Letter of
Credit, the Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(a) If any Event of Default shall occur and be continuing, on the Business
Day that the Loan Parties receive notice from the Administrative Agent
or the Required Tranche A Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Loan Parties shall deposit
in the Cash Collateral Account an amount in cash equal to 105% of the
Letter of Credit Outstandings as of such date plus any accrued and
unpaid interest thereon. Each such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
obligations of the Loan Parties under this Agreement. The Collateral
Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such Cash Collateral Account.
Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of
the Collateral Agent at the request of the Loan Parties and at the
Loan Parties' risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such Cash Collateral Account shall be applied
by the Collateral Agent to reimburse the Issuing Bank for payments on
account of drawings under Letters of Credit for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Loan Parties for
the Letter of Credit Outstandings at such time or, if the maturity of
the Loans has been accelerated, be applied to satisfy other
obligations of the Loan Parties under this Agreement. If the Loan
Parties are required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Loan
Parties within three Business Days after all Events of Default have
been cured or waived.
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Section 2.7 Settlements Amongst Tranche A Lenders
(a) The Swingline Lender may (but shall not be obligated to), at any time,
on behalf of the Loan Parties (which hereby authorizes the Swingline Lender to
act in its behalf in that regard) request the Administrative Agent to cause the
Tranche A Lenders to make a Tranche A Loan (which shall be an Base Rate Loan) in
an amount equal to such Tranche A Lender's Tranche A Commitment Percentage of
the outstanding amount of Swingline Loans made in accordance with Section 2.05,
which request may be made regardless of whether the conditions set forth in
Article IV have been satisfied. Upon such request, each Tranche A Lender shall
make available to the Administrative Agent the proceeds of such Tranche A Loan
for the account of the Swingline Lender. If the Swingline Lender requires a
Tranche A Loan to be made by the Tranche A Lenders and the request therefor is
received prior to 12:00 Noon, Boston time, on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 p.m., Boston
time, that day; and, if the request therefor is received after 12:00 Noon,
Boston time, then no later than 3:00 p.m., Boston time, on the next Business
Day. The obligation of each Tranche A Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent or the Swingline Lender. If and to the extent any Tranche A
Lender shall not have so made its transfer to the Administrative Agent, such
Tranche A Lender agrees to pay to the Administrative Agent, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent at the Federal Funds
Effective Rate.
(b) The amount of each Tranche A Lender's Tranche A Commitment Percentage
of outstanding Tranche A Loans (excluding Swingline Loans) shall be computed
weekly (or more frequently in the Administrative Agent's discretion) and shall
be adjusted upward or downward based on all Tranche A Loans (excluding Swingline
Loans) and repayments of Tranche A Loans (excluding Swingline Loans) received by
the Administrative Agent as of 3:00 p.m., Boston time, on the first Business Day
following the end of the period specified by the Administrative Agent (such
date, the "Settlement Date").
(c) The Administrative Agent shall deliver to each of the Tranche A Lenders
promptly after the Settlement Date a summary statement of the amount of
outstanding Tranche A Loans (excluding Swingline Loans) for the period and the
amount of repayments received for the period. As reflected on the summary
statement: (x) the Administrative Agent shall transfer to each Tranche A Lender
its applicable Tranche A Commitment Percentage of repayments, and (y) each
Tranche A Lender shall transfer to the Administrative Agent (as provided below),
or the Administrative Agent shall transfer to each Tranche A Lender, such
amounts as are necessary to insure that, after giving effect to all such
transfers, the amount of Tranche A Loans made by each Tranche A Lender with
respect to Tranche A Loans (excluding Swingline Loans) shall be equal to such
Tranche A Lender's applicable Tranche A Commitment Percentage of Tranche A Loans
outstanding as of such Settlement Date. If the summary statement requires
transfers to be made to the Administrative Agent by the Tranche A Lenders and is
received prior to 12:00 Noon, Boston time, on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 p.m., Boston
time, that day; and, if received after 12:00 Noon, Boston time, then no later
than 3:00 p.m., Boston time, on the next Business Day. The obligation of each
Tranche A Lender to transfer such funds is irrevocable, unconditional and
without recourse to or warranty by the Administrative Agent. If and to the
extent any Tranche A Lender shall not have so made its transfer to the
Administrative Agent, such Tranche A Lender agrees to pay to the Administrative
Agent, forthwith on demand such amount, together with interest thereon, for each
day from such date until the date such amount is paid to the Administrative
Agent at the Federal Funds Effective Rate.
Section 2.8 Notes; Repayment of Loans
(a) Upon the request of any Tranche A Lender, the Tranche A Loans
outstanding to such Tranche A Lender (and to the Swingline Lender, with respect
to Swingline Loans) shall be evidenced by a Tranche A Note duly executed on
behalf of the Loan Parties, dated the Closing Date, in substantially the form
attached hereto as Exhibit C-1 or C-2, as applicable, payable to the order of
such Tranche A Lender (or the Swingline Lender, as applicable) in an aggregate
principal amount equal to such Tranche A Lender's Tranche A Commitment (or, in
the case of the Tranche A Note evidencing the Swingline Loans, $25,000,000).
Upon the request of any Tranche B Lender, the Tranche B Loans outstanding to
each Tranche B Lender shall be evidenced by a Tranche B Note duly executed on
behalf of the Loan Parties, dated the Closing Date, in substantially the form
attached hereto as Exhibit C-3, payable to the order of such Tranche B Lender in
an aggregate principal amount equal to such Tranche B Lender's Tranche B
Commitment.
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(b) The outstanding principal balance of all Swingline Loans shall be
repaid on the earlier of the Termination Date or, on the date otherwise
requested by the Swingline Lender in accordance with the provisions of Section
2.07(a). The outstanding principal balance of all other Obligations shall be
payable on the Termination Date (subject to earlier repayment as provided
below). Each Note shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in this Article II. Each Lender is hereby
authorized by the Loan Parties to endorse on a schedule attached to each Note
delivered to such Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each Loan
from such Lender, each payment and prepayment of principal of any such Loan,
each payment or capitalization of interest on any such Loan and the other
information provided for on such schedule; provided, however, that the failure
of any Lender to make such a notation or any error therein shall not affect the
obligation of the Loan Parties to repay the Loans made by such Lender in
accordance with the terms of this Agreement and the applicable Notes.
Section 2.9 Interest on Loans
(a) Tranche A Loans
(i) Subject to Section 2.10, each Base Rate Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as applicable) at a rate per annum that shall
be equal to the then Alternate Base Rate, plus the Applicable Margin
for Base Rate Loans.
(ii) Subject to Section 2.10, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal, during each Interest
Period applicable thereto, to the Adjusted LIBO Rate for such Interest
Period, plus the Applicable Margin for Eurodollar Loans.
(iii)Accrued interest on all Tranche A Loans shall be payable in arrears on
each Interest Payment Date applicable thereto, at maturity (whether by
acceleration or otherwise), after such maturity on demand and (with
respect to Eurodollar Loans) upon any repayment or prepayment thereof
(on the amount prepaid).
(b) Tranche B Loans
(i) Subject to Section 2.10, each Tranche B Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Tranche B Interest
Rate. Subject to Section 2.10, the Loan Parties shall have the option
to pay all or a portion of the interest payable on the Tranche B Loans
in excess of 13% per annum by adding such excess amount ("PIK
Interest") to the principal amount outstanding under the Tranche B
Note on the first Business Day of each calendar month. The Loan
Parties shall give the Tranche B Administrative Agent an irrevocable
notice that it will exercise such right at least three Business Days
prior to any Tranche B Interest Payment Date as to which such right is
to be exercised.
(ii) Accrued interest on all Tranche B Loans, other than PIK Interest,
shall be payable monthly in arrears, on the first Business Day of each
calendar month (the "Tranche B Interest Payment Date"), commencing
September 1, 2000, at maturity (whether by acceleration or otherwise),
and after such maturity on demand. All accrued and unpaid PIK Interest
shall be payable in full on the Termination Date.
Section 2.10 Default Interest
Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, interest shall accrue on
all outstanding Tranche A Loans (including Swingline Loans) (after as well as
before judgment, as and to the extent permitted by law) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the rate (including the Applicable Margin for Tranche A Loans) in
effect from time to time plus 2.00% per annum, and such interest shall be
payable on demand.
Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, interest shall accrue on
all outstanding Tranche B Loans (after as well as before judgment) at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of
360 days) equal to 19.5% and such interest shall be payable in full in cash, on
demand.
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Section 2.11 Certain Fees
The Loan Parties shall pay to the Administrative Agent, for the account of
the Administrative Agent, the fees set forth in the Fee Letter as and when
payment of such fees is due as therein set forth. The Loan Parties shall pay to
the Tranche B Administrative Agent, for the account of the Tranche B Lenders,
the fees set forth in the Tranche B Fee Letter, as and when payment of such fees
is due as therein set forth. The Loan Parties shall pay to FBRS, for its own
account, the fees set forth in the Structuring Fee Letter, as and when payment
of such fees is due as therein set forth.
Section 2.12 Unused Commitment Fee
Each Tranche A Lender shall be paid the Line Fee at the times and in the
manner set forth below. The Loan Parties shall pay to the Administrative Agent
for the account of the Tranche A Lenders, a commitment fee (the "Commitment
Fee") equal to 0.50% per annum (on the basis of actual days elapsed in a year of
365 or 366 days, as applicable) of the average daily balance of the Unused
Tranche A Commitment for each day commencing on and including the Closing Date
and ending on but excluding the Termination Date. The Commitment Fee so accrued
in any calendar month shall be payable on the first Business Day of the
immediately succeeding calendar month, except that all Commitment Fees so
accrued as of the Termination Date shall be payable on the Termination Date. If
the Commitment Fee actually paid by the Loan Parties is insufficient to pay the
Line Fee due the Tranche A Lenders, the deficiency shall be paid to the Tranche
A Lenders by the Swingline Lender from its own funds (and the Loan Parties shall
have no liability with respect thereto). The Administrative Agent shall pay the
Commitment Fee (and any amounts payable by the Swingline Lender hereunder) to
the Tranche A Lenders based upon their pro rata share of the aggregate Line Fee
due to all Tranche A Lenders; provided that for purposes of calculating the pro
rata share of any Person which is both the Swingline Lender and a Tranche A
Lender, such Person's share shall be equal to the difference between (i) the sum
of such Person's Tranche A Commitment, and (ii) the sum of (A) such Person's
Tranche A Commitment Percentage of the principal amount of Tranche A Loans then
outstanding (including the principal amount of Swingline Loans then
outstanding), and (B) such Person's Tranche A Commitment Percentage of the then
Letter of Credit Outstandings.
Section 2.13 Letter of Credit Fees
(a) The Loan Parties shall pay the Administrative Agent, for the account of
the Tranche A Lenders, quarterly in arrears, a fee (each, a "Letter of Credit
Fee") equal to the following per annum percentages of the average face amount of
the following categories of Letters of Credit outstanding during the subject
quarter:
(i) Standby Letters of Credit: The Applicable Margin for Eurodollar Loans.
(ii) Commercial Letters of Credit: The Applicable Margin for Eurodollar
Loans minus 0.50%.
(iii)After the occurrence and during the continuance of an Event of
Default, the Letter of Credit Fee shall be increased, at the option of
the Administrative Agent, by an amount equal to two percent (2%) per
annum.
(b) The Loan Parties shall pay to the Administrative Agent, for the account
of the Issuing Bank, and in addition to all Letter of Credit Fees otherwise
provided for hereunder, a fronting fee (the "Fronting Fee") equal to 0.125% per
annum of the average daily balance of the maximum amount that at any time is
available for drawing or payment under each Letter of Credit, payable monthly in
arrears, as well as such fees and charges in connection with the issuance,
negotiation, settlement, amendment and processing of each Letter of Credit
issued by the Issuing Bank as are customarily imposed by the Issuing Bank from
time to time in connection with letter of credit transactions.
Section 2.14 Nature of Fees
All fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for the respective accounts of the Administrative
Agent, the Issuing Bank, the Collateral Agent and the Lenders, as provided
herein. Once paid, all fees shall be fully-earned and shall not be refundable
under any circumstances.
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Section 2.15 Termination or Reduction of Commitments
(a) Upon at least two Business Days' prior written notice to the
Administrative Agent, the Loan Parties may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Tranche A
Commitments. Each such reduction shall be in the principal amount of $5,000,000
or any integral multiple thereof. Each such reduction or termination shall (i)
be applied ratably to the Tranche A Commitments of each Tranche A Lender and
(ii) be irrevocable when given. At the effective time of each such reduction or
termination, the Loan Parties shall pay to the Administrative Agent for
application as provided herein (i) all Commitment Fees accrued on the amount of
the Tranche A Commitments so terminated or reduced through the date thereof,
(ii) any amount by which the Tranche A Credit Extensions outstanding on such
date exceed the amount to which the Tranche A Commitments are to be reduced
effective on such date and (iii) all earned and unpaid Fees with respect to such
Credit Extensions, in each case pro rata based on the amount prepaid.
(b) The Loan Parties may not terminate or reduce the Tranche B Commitments
at any time except for any termination or reduction made solely by virtue of the
application of Net Proceeds in accordance with the provisions of Section 2.18.
Each such reduction or termination shall (i) be applied ratably to the Tranche B
Commitments of each Tranche B Lender and (ii) be irrevocable when given. At the
effective time of each such reduction or termination, the Loan Parties shall pay
to the Administrative Agent for application as provided herein (i) any amount by
which the Tranche B Loans outstanding on such date exceed the amount to which
the Tranche B Commitments are to be reduced effective on such date and (ii) all
earned and unpaid Fees under the Tranche B Fee Letter, pro rata based on the
amount prepaid.
Section 2.16 Alternate Rate of Interest
If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Tranche A Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Tranche A Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Loan Parties and
the Tranche A Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Loan Parties and the
Tranche A Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Borrowing Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
Section 2.17 Conversion and Continuation of Tranche A Loans
▇▇▇▇▇▇-▇▇▇▇▇▇ on behalf of the Loan Parties shall have the right at any
time, on two Business Days' prior irrevocable notice to the Administrative Agent
(which notice, to be effective, must be received by the Administrative Agent not
later than 11:00 a.m., Boston time, on the third Business Day preceding the date
of any conversion), (x) to convert any outstanding Borrowings of Tranche A Loans
(but in no event Swingline Loans) of one Type (or a portion thereof) to a
Borrowing of Tranche A Loans of the other Type or (y) to continue an outstanding
Borrowing of Eurodollar Loans for an additional Interest Period, subject to the
following:
(a) no Borrowing of Tranche A Loans may be converted into, or continued as,
Eurodollar Loans at any time when an Event of Default has occurred and is
continuing (nothing contained herein being deemed to obligate the Loan Parties
to incur Breakage Costs upon the occurrence of an Event of Default unless the
Obligations are accelerated);
(b) if less than a full Borrowing of Tranche A Loans is converted, such
conversion shall be made pro rata among the Tranche A Lenders, as applicable, in
accordance with the respective principal amounts of the Tranche A Loans
comprising such Borrowing held by such Tranche A Lenders immediately prior to
such refinancing;
(c) the aggregate principal amount of Tranche A Loans being converted into
or continued as Eurodollar Loans shall be in an integral of $1,000,000 and at
least $5,000,000;
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(d) each Tranche A Lender shall effect each conversion by applying the
proceeds of its new Eurodollar Loan or Base Rate Loan, as the case may be, to
its Tranche A Loan being so converted;
(e) the Interest Period with respect to a Borrowing of Eurodollar Loans
effected by a conversion or in respect to the Borrowing of Eurodollar Loans
being continued as Eurodollar Loans shall commence on the date of conversion or
the expiration of the current Interest Period applicable to such continuing
Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be converted only on the last day
of an Interest Period applicable thereto;
(g) each request for a conversion or continuation of a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month; and
(h) no more than ten (10) Borrowings of Eurodollar Loans may be outstanding
at any time.
If ▇▇▇▇▇▇-▇▇▇▇▇▇ does not give notice to convert any Borrowing of Eurodollar
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as Eurodollar Loans, in each case as provided above,
such Borrowing shall automatically be converted to a Borrowing of Base Rate
Loans at the expiration of the then-current Interest Period. The Administrative
Agent shall, after it receives notice from ▇▇▇▇▇▇-▇▇▇▇▇▇, promptly give each
Tranche A Lender notice of any conversion, in whole or part, of any Tranche A
Loan made by such Tranche A Lender.
Section 2.18 Mandatory Prepayment; Commitment Termination; Cash Collateral
The outstanding Obligations shall be subject to mandatory prepayment as
follows:
(a) If at any time the amount of the Tranche A Credit Extensions exceeds
the lower of (i) the then amount of the Tranche A Commitments and (ii) the then
amount of the Borrowing Base plus the cash held in the Cash Collateral Account,
the Loan Parties will immediately upon notice from the Administrative Agent (A)
prepay the Tranche A Loans in an amount necessary to eliminate such excess, and
(B) if, after giving effect to the prepayment in full of all outstanding Tranche
A Loans such excess has not been eliminated, deposit cash into the Cash
Collateral Account in an amount equal to 105% of the remaining amount of such
excess.
(b) The Tranche A Loans shall be repaid daily in accordance with the
provisions of Section 2.21(i) hereof.
(c) In the event and on each occasion that any Net Proceeds are received by
or on behalf of a Loan Party or any Subsidiary in respect of any Prepayment
Event, the Loan Parties shall, immediately after such Net Proceeds are received,
prepay the Loans in an aggregate principal amount equal to such Net Proceeds in
the following priority:
(i) Except as provided in clauses (A) - (B) and clause (ii) below, the Net
Proceeds realized from any Prepayment Event shall be paid FIRST, in
reduction of the Swingline Loans, SECOND, in reduction of the other
Tranche A Loans, THIRD, to the Cash Collateral Account as collateral
for the Letter of Credit Outstandings up to 105% thereof, FOURTH, if
an Event of Default then exists, to the Tranche B Loans, and FIFTH, to
all other Obligations. If all Obligations (other than the Tranche B
Loans) are paid, any excess Net Proceeds shall be deposited in a
separate cash collateral account, and as long as no Event of Default
then exists, shall be released to the Loan Parties upon their request
and utilized by the Loan Parties prior to any further Tranche A Loans
being made. Notwithstanding the foregoing, prior to the occurrence of
an Event of Default and the termination of the Tranche A Commitments,
(A) The Net Proceeds from any bulk sale of Inventory not in the
ordinary course that reduces stock ledger inventory to an amount
less than $150,000,000 shall be applied first, to the Tranche A
Loans (including Swingline Loans) up to the then applicable
Inventory Advance Rate of the Cost of such Inventory and second,
at the option of the Required Tranche B Lenders, to the Tranche B
Loans in an amount up to 4% of the Cost of such Inventory.
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(B) Any Net Proceeds in excess of the amounts described in clause
(A), above, shall be applied in reduction of the Tranche A Loans
(including Swingline Loans), or if no such Tranche A Loans are
then outstanding, to the Cash Collateral Account as collateral
for the Letter of Credit Outstandings up to 105% thereof.
(ii) The Net Proceeds realized from all Equipment and Seller Notes
Receivable (each as defined in the Security Agreement) shall be paid
FIRST, to the Tranche B Loans, SECOND, in reduction of the Swingline
Loans, THIRD, in reduction of the other Tranche A Loans, FOURTH, to
the Cash Collateral Account as collateral for the Letter of Credit
Outstandings up to 105% thereof, and FIFTH, to all other Obligations.
(d) Subject to the foregoing, outstanding Base Rate Loans shall be prepaid
before outstanding Eurodollar Loans are prepaid. Each partial prepayment of
Eurodollar Loans shall be in an integral multiple of $1,000,000. No prepayment
of Eurodollar Loans shall be permitted pursuant to this Section 2.18 other than
on the last day of an Interest Period applicable thereto, unless the Loan
Parties simultaneously reimburse the Tranche A Lenders for all "Breakage Costs"
(as defined below) associated therewith. In order to avoid such Breakage Costs,
as long as no Event of Default has occurred and is continuing, at the request of
▇▇▇▇▇▇-▇▇▇▇▇▇, the Administrative Agent shall hold all amounts required to be
applied to Eurodollar Loans in the Cash Collateral Account and will apply such
funds to the applicable Eurodollar Loans at the end of the then pending Interest
Period therefor (provided that the foregoing shall in no way limit or restrict
the Agents' rights upon the subsequent occurrence of an Event of Default). No
partial prepayment of a Borrowing of Eurodollar Loans shall result in the
aggregate principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000. Any prepayment of the
Tranche B loans shall permanently reduce the Tranche B Commitments; and any
prepayment of the Tranche A Loans shall not permanently reduce the Tranche A
Commitments.
(e) All amounts required to be applied to all Tranche A Loans hereunder
(other than Swingline Loans) shall be applied ratably in accordance with each
Tranche A Lender's Tranche A Commitment Percentage.
(f) Upon the Termination Date, the credit facility provided hereunder shall
be terminated in full and the Loan Parties shall pay, in full and in cash, all
outstanding Loans and all other outstanding Obligations.
Section 2.19 Optional Prepayment of Loans; Reimbursement of Lenders
(a) The Loan Parties shall have the right at any time and from time to time
to prepay outstanding Tranche A Loans in whole or in part, (x) with respect to
Eurodollar Loans, upon at least two Business Days' prior written, telex or
facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time,
and (y) with respect to Base Rate Loans, on the same Business Day if written,
telex or facsimile notice is received by the Administrative Agent prior to 1:00
p.m., Boston time, subject to the following limitations:
(i) Subject to Section 2.18, all prepayments shall be paid to the
Administrative Agent for application, first, to the prepayment of
outstanding Swingline Loans, second, to the prepayment of other
outstanding Tranche A Loans ratably in accordance with each Tranche A
Lender's Tranche A Commitment Percentage, and third, to the funding of
a cash collateral deposit in the Cash Collateral Account in an amount
equal to 105% of all Letter of Credit Outstandings.
(ii) Subject to the foregoing, outstanding Base Rate Loans shall be prepaid
before outstanding Eurodollar Loans are prepaid. Each partial
prepayment of Eurodollar Loans shall be in an integral multiple of
$1,000,000. No prepayment of Eurodollar Loans shall be permitted
pursuant to this Section 2.19 other than on the last day of an
Interest Period applicable thereto, unless the Loan Parties
simultaneously reimburse the Tranche A Lenders for all "Breakage
Costs" (as defined below) associated therewith. No partial prepayment
of a Borrowing of Eurodollar Loans shall result in the aggregate
principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000.
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(iii)Each notice of prepayment shall specify the prepayment date, the
principal amount and Type of the Tranche A Loans to be prepaid and, in
the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to
which such Tranche A Loans were made. Each notice of prepayment shall
be irrevocable and shall commit the Loan Parties to prepay such
Tranche A Loan by the amount and on the date stated therein. The
Administrative Agent shall, promptly after receiving notice from the
Loan Parties hereunder, notify each Tranche A Lender of the principal
amount and Type of the Tranche A Loans held by such Tranche A Lender
which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b) The Loan Parties shall reimburse each Tranche A Lender on demand for
any loss incurred or to be incurred by it in the reemployment of the funds
released (i) resulting from any prepayment (for any reason whatsoever,
including, without limitation, conversion to Base Rate Loans or acceleration by
virtue of, and after, the occurrence of an Event of Default) of any Eurodollar
Loan required or permitted under this Agreement, if such Tranche A Loan is
prepaid other than on the last day of the Interest Period for such Tranche A
Loan or (ii) in the event that after ▇▇▇▇▇▇-▇▇▇▇▇▇ delivers a notice of
borrowing under Section 2.03 in respect of Eurodollar Loans, such Tranche A
Loans are not made on the first day of the Interest Period specified in such
notice of borrowing for any reason other than a breach by such Tranche A Lender
of its obligations hereunder or the delivery of any notice pursuant to Section
2.16. Such loss shall be the amount as reasonably determined by such Tranche A
Lender as the excess, if any, of (A) the amount of interest which would have
accrued to such Tranche A Lender on the amount so paid or not borrowed at a rate
of interest equal to the Adjusted LIBO Rate for such Tranche A Loan, for the
period from the date of such payment or failure to borrow to the last day (x) in
the case of a payment or refinancing with Base Rate Loans other than on the last
day of the Interest Period for such Tranche A Loan, of the then current Interest
Period for such Tranche A Loan or (y) in the case of such failure to borrow, of
the Interest Period for such Tranche A Loan which would have commenced on the
date of such failure to borrow, over (B) the amount of interest which would have
accrued to such Tranche A Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the London interbank
market (collectively, "Breakage Costs"). Any Tranche A Lender demanding
reimbursement for such loss shall deliver to the Loan Parties from time to time
one or more certificates setting forth the amount of such loss as determined by
such Tranche A Lender and setting forth in reasonable detail the manner in which
such amount was determined.
(c) In the event the Loan Parties fail to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.19(a), the
Loan Parties on demand by any Lender shall pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Any Lender demanding
such payment shall deliver to the Loan Parties from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender
and setting forth in reasonable detail the manner in which such amount was
determined.
(d) Whenever any partial prepayment of Loans are to be applied to
Eurodollar Loans, such Eurodollar Loans shall be prepaid in the chronological
order of their Interest Payment Dates.
(e) The Loan Parties may not prepay the Tranche B Loans at any time except
from the application of Net Proceeds in accordance with the provisions of
Section 2.18 hereof. The Administrative Agent shall, promptly notify each
Tranche B Lender of the principal amount and Type of the Tranche B Loans held by
such Tranche B Lender which are to be prepaid, the prepayment date and the
manner of application of the prepayment.
Section 2.20 Maintenance of Loan Account; Statements of Account
(a) The Administrative Agent shall maintain an account on its books in the
name of the Loan Parties (the "Loan Account") which will reflect (i) all
Swingline Loans and all loans and advances made by the Lenders to the Loan
Parties or for the Loan Parties' account, including the Loans, (ii) all L/C
Disbursements, fees and interest that have become payable as herein set forth,
and (iii) any and all other Obligations that have become payable.
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(b) The Loan Account will be credited with all amounts received by the
Administrative Agent from the Loan Parties or from others for the Loan Parties'
account, including all amounts received in the FRF Concentration Account from
the Blocked Account Banks, and the amounts so credited shall be applied as set
forth in Sections 2.22(a) and (b). After the end of each month, the
Administrative Agent shall send to the Loan Parties a statement accounting for
the charges, loans, advances and other transactions occurring among and between
the Administrative Agent, the Lenders and the Loan Parties during that month.
The monthly statements shall, absent manifest error, be an account stated, which
is final, conclusive and binding on the Loan Parties.
Section 2.21 Cash Receipts
(a) Annexed hereto as Schedule 2.21(a) is a list of all present DDAs, which
Schedule includes, with respect to each depository (i) the name and address of
that depository; (ii) the account number(s) maintained with such depository; and
(iii) to the extent known, a contact person at such depository.
(b) Annexed hereto as Schedule 2.21(b) is a list describing all
arrangements to which any Loan Party is a party with respect to the payment to
any Loan Party of the proceeds of all credit card charges for sales by any Loan
Party.
(c) The Loan Parties shall (i) deliver to the Administrative Agent, within
ten (10) days after entry of the Interim Borrowing Order, notifications executed
on behalf of the Loan Parties to each depository institution with which any DDA
is maintained (other than DDAs which receive solely Non-Concentrated Proceeds)
in form satisfactory to the Administrative Agent, of the Administrative Agent's
interest in such DDA (each, a "DDA Notification"), and (ii) deliver to the
Administrative Agent, within five (5) days after entry of the Interim Borrowing
Order, notifications executed on behalf of the Loan Parties to each of the Loan
Party's credit card clearinghouses and processors of notice in form satisfactory
to the Administrative Agent, (each, a "Credit Card Notification"), and (iii)
prior to the Closing Date, enter into agency agreements with the banks
maintaining the deposit accounts identified on Schedule 2.21(c) (collectively,
the "Blocked Accounts"), which agreements (the "Blocked Account Agreements")
shall be in form and substance satisfactory to the Administrative Agent. The DDA
Notifications, Credit Card Notifications and Blocked Account Agreements shall
require the sweep on each Business Day of all available cash receipts from the
sale of Inventory and other assets, all collections of Accounts, and all other
cash payments received by the Loan Parties from any Person or from any source or
on account of any sale or other transaction or event, excluding only the
proceeds of the Loans and the Non-Concentrated Proceeds (all such non-excluded
cash receipts and collections, "Cash Receipts"), to a concentration account
maintained by the Collateral Agent at Fleet (the "FRF Concentration Account").
In that regard, the Loan Parties shall cause the ACH or wire transfer to a
Blocked Account or to the FRF Concentration Account, no less frequently than
daily (and whether or not there is then an outstanding balance in the Loan
Account) of (A) the then contents of each DDA (other than DDAs which receive
solely Non-Concentrated Proceeds), each such transfer to be net of any minimum
balance, not to exceed $5,000, as may be required to be maintained in the
subject DDA by the bank at which such DDA is maintained; and (B) the proceeds of
all credit card charges not otherwise provided for pursuant hereto, provided
that the Administrative Agent agrees that for a period not to exceed fifteen
(15) days from the date of entry of the Interim Borrowing Order, funds from the
DDAs and proceeds of credit card charges may be transferred to the existing
SunTrust Master Account as long as the Loan Parties account for and disburse
such funds and proceeds in accordance with the provisions of Section 2.21(g),
and further provided that the Loan Parties shall not, at any time, be liable for
any failure to transfer the contents of any DDA daily as provided herein, if
such failure is occasioned by a technological or systems defect not within the
control of the Loan Parties. Further, whether or not any Obligations are then
outstanding, the Loan Parties shall cause the ACH or wire transfer to the FRF
Concentration Account, no less frequently than daily, of the then entire ledger
balance of each Blocked Account, net of such minimum balance, not to exceed the
amounts set forth in Schedule 2.21(c). In the event that, notwithstanding the
provisions of this Section 2.21, the Loan Parties receive or otherwise have
dominion and control of any such proceeds or collections, such proceeds and
collections shall be held in trust by the Loan Parties for the Administrative
Agent and shall not be commingled with any of the Loan Parties' other funds or
deposited in any account of any Loan Party other than as instructed by the
Administrative Agent.
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(d) The Loan Parties shall accurately report to the Administrative Agent
all amounts deposited in the Blocked Accounts to ensure the proper transfer of
funds as set forth above. If at any time other than the times set forth above
any cash or cash equivalents owned by the Loan Parties are deposited to any
account, or held or invested in any manner, otherwise than in a Blocked Account
that is subject to a Blocked Account Agreement (other than DDAs into which
solely Non-Concentrated Proceeds are deposited), the Administrative Agent shall
require the Loan Parties to close such account and have all funds therein
transferred to an account maintained by the Administrative Agent at Fleet and
all future deposits made to a Blocked Account which is subject to a Blocked
Account Agreement.
(e) The Loan Parties may request that the Administrative Agent close DDAs
or Blocked Accounts and/or open new DDAs or Blocked Accounts (or, in either
case, permit the Loan Parties to do so), subject to the execution and delivery
to the Administrative Agent of appropriate DDA Notifications or Blocked Account
Agreements (unless expressly waived by the Administrative Agent) consistent with
the provisions of this Section 2.21 and otherwise satisfactory to the
Administrative Agent. Unless consented to in writing by the Administrative
Agent, the Loan Parties may not maintain any bank accounts or enter into any
agreements with credit card processors other than the ones expressly
contemplated herein.
(f) The Loan Parties may also maintain one or more disbursement accounts
(the "Disbursement Accounts") to be used by the Loan Parties for disbursements
and payments (including payroll) in the ordinary course of business or as
otherwise permitted hereunder; provided that the Loan Parties deliver a DDA
Notification for each such Disbursement Account, and further provided that the
amount on deposit in any such Disbursement Account shall at no time exceed the
amounts required to be maintained in the Disbursement Account by the depository
bank and amounts reasonably anticipated to be required to fund operating
expenses for the subsequent five (5) day period. The only Disbursement Accounts
as of the Closing Date are those described in Schedule 2.21(f).
(g) The Loan Parties shall also maintain one or more DDAs into which only
the Non-Concentrated Proceeds shall be deposited. Any Non-Concentrated Proceeds
deposited into any DDA into which any Cash Receipts or any proceeds of any other
Collateral are deposited shall be forwarded daily to a Blocked Account or to the
FRF Concentration Account and, within one (1) Business Day thereafter, the Loan
Parties shall redirect, or cause to be redirected, such Non-Concentrated
Proceeds from the Blocked Account to a DDA into which only the Non-Concentrated
Proceeds shall be deposited, to the end that the Blocked Account shall thereupon
contain only Cash Receipts and any proceeds of any other Collateral (which Cash
Receipts and other proceeds shall be forwarded to the FRF Concentration Account
as provided in Section 2.21(c)). The Loan Parties shall furnish the
Administrative Agent with an accounting daily of all deposits made into each DDA
(including DDAs into which the Non-Concentrated Proceeds are deposited) and to
the Blocked Account, setting forth in reasonable detail the portion of each such
deposit which constituted Non-Concentrated Proceeds and the portion which
constituted Cash Receipts and any proceeds of any other Collateral.
(h) The FRF Concentration Account is, and shall remain, under the sole
dominion and control of the Collateral Agent. Each Loan Party acknowledges and
agrees that (i) such Loan Party has no right of withdrawal from the FRF
Concentration Account, (ii) the funds on deposit in the FRF Concentration
Account shall continue to be collateral security for all of the Obligations and
(iii) the funds on deposit in the FRF Concentration Account shall be applied as
provided in Section 2.22(a).
(i) Daily, the Collateral Agent shall promptly apply funds in the FRF
Concentration Account in reduction of the Obligations (in the manner set forth
in Section 2.22 hereof).
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Section 2.22 Application of Payments
(a) Subject to the provisions of Sections 2.18 and 2.21 and, to the extent
applicable, the Borrowing Order, all amounts received in the FRF Concentration
Account from any source, including the Blocked Account Banks, shall be applied,
on the day immediately following receipt, in the following order: first, to pay
interest due and payable on Credit Extensions and to pay fees and expense
reimbursements and indemnification then due and payable to the Administrative
Agent, FBRS, the Issuing Bank, the Collateral Agent, the Tranche B
Administrative Agent, and the Lenders; second to repay outstanding Swingline
Loans; third, to repay other outstanding Tranche A Loans that are Base Rate
Loans and all outstanding reimbursement obligations under Letters of Credit;
fourth, to repay outstanding Tranche A Loans that are Eurodollar Loans and all
Breakage Costs due in respect of such repayment pursuant to Section 2.19(b) or,
at the Loan Parties' option (if no Event of Default has occurred and is then
continuing), to fund a cash collateral deposit to the Cash Collateral Account
sufficient to pay, and with direction to pay, all such outstanding Eurodollar
Loans on the last day of the then-pending Interest Period therefor; fifth if any
Event of Default has occurred and is continuing, to fund a cash collateral
deposit in the Cash Collateral Account in an amount equal to 105% of all Letter
of Credit Outstandings; provided, however, that if such Event of Default shall
be waived pursuant to the terms hereof, such cash collateral shall be released
and applied pursuant to clauses sixth, and seventh below; sixth, if all
outstanding Tranche A Loans and Letter of Credit Outstandings have been repaid
or secured by cash collateral deposits as set forth above, if an Event of
Default then exists, to repay outstanding Tranche B Loans; and seventh, to pay
all other Obligations that are then outstanding and payable. If all Obligations
(other than the Tranche B Loans) are paid, any excess Net Proceeds shall be
deposited in a separate cash collateral account, and as long as no Event of
Default then exists, shall be released to the Loan Parties upon their request
and utilized by the Loan Parties prior to any further Tranche A Loans being
made. Any other amounts received by the Administrative Agent, the Issuing Bank,
the Collateral Agent, the Tranche B Administrative Agent, or any Lender as
contemplated by Section 2.21 shall also be applied in the order set forth above
in this Section 2.22.
(b) Any amounts received in the FRF Concentration Account at any time when
all of the Obligations have been and remain fully repaid shall be remitted to
the Loan Parties, if and as the Loan Parties may request.
(c) All credits against the Obligations shall be conditioned upon final
payment to the Administrative Agent of the items giving rise to such credits and
shall be subject to one (1) Business Day's clearance and collection. If any item
deposited to the FRF Concentration Account and credited to the Loan Account is
dishonored or returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent shall have the right to reverse
such credit and charge the amount of such item to the Loan Account and the Loan
Parties shall indemnify the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders against all claims and losses resulting from such
dishonor or return.
Section 2.23 Increased Costs
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any holding company
of any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar
Loans made by such Tranche A Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Tranche A Lender of making or maintaining any Eurodollar Loan (or of maintaining
its obligation to make any such Loan) or to increase the cost to such Tranche A
Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Tranche A Lender or the Issuing Bank hereunder (whether of principal,
interest or otherwise), then the Loan Parties will pay to such Tranche A Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Tranche A Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.
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(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Loan Parties will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and setting forth in reasonable detail the manner in which such
amount or amounts were determined shall be delivered to the Loan Parties and
shall be conclusive absent manifest error. The Loan Parties shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation, provided
that the Loan Parties shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 90 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Loan Parties of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor, and provided further that, if
the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 90-day period referred to above shall be extended to
include the period of retroactive effect thereof.
Section 2.24 Change in Legality
(a) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, if (x) any Change in Law shall make it unlawful for a Lender to make
or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Lender determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Lender in the London interbank market, then, by written notice to the Loan
Parties, such Lender may (i) declare that Eurodollar Loans will not thereafter
be made by such Lender hereunder, whereupon any request by the Loan Parties for
a Eurodollar Borrowing shall, as to such Lender only, be deemed a request for an
Base Rate Loan unless such declaration shall be subsequently withdrawn; and (ii)
require that all outstanding Eurodollar Loans made by it be converted to Base
Rate Loans, in which event all such Eurodollar Loans shall be automatically
converted to Base Rate Loans as of the effective date of such notice as provided
in paragraph (b) below. In the event any Lender shall exercise its rights under
clause (i) or (ii) of this paragraph (a), all payments and prepayments of
principal which would otherwise have been applied to repay the Eurodollar Loans
that would have been made by such Lender or the converted Eurodollar Loans of
such Lender shall instead be applied to repay the Base Rate Loans made by such
Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.24, a notice to the Loan Parties by any
Lender pursuant to paragraph (a) above shall be effective, if lawful, and if any
Eurodollar Loans shall then be outstanding, on the last day of the then-current
Interest Period; and otherwise such notice shall be effective on the date of
receipt by the Loan Parties.
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Section 2.25 Payments; Sharing of Setoff
(a) The Loan Parties shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of drawings under Letters of Credit, or of amounts payable
under Sections 2.19(b), 2.23 or 2.26, or otherwise) prior to 12:00 noon, Boston
time, on the date when due, in immediately available funds, without setoff or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.19(b), 2.23, 2.26 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment under any Loan Document shall be due on a day that is not a Business
Day, except with respect to Eurodollar Borrowings, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed
drawings under Letters of Credit, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed drawings under Letters of Credit then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed drawings under Letters of Credit then due
to such parties.
(c) If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans or participations in drawings under Letters of Credit or Swingline
Loans resulting in such Lender's receiving payment of a greater proportion of
the aggregate amount of its Loans and participations in drawings under Letters
of Credit and Swingline Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and
participations in drawings under Letters of Credit and Swingline Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in drawings under Letters of Credit and Swingline Loans, provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Loan Parties pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in drawings under Letters of Credit to any assignee or
participant, other than to the Loan Parties or any Affiliate thereof (as to
which the provisions of this paragraph shall apply). The Loan Parties consent to
the foregoing and agree, to the extent they may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may, subject to the terms of the Borrowing Order,
exercise against the Loan Parties rights of setoff and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Loan Parties in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Loan Parties prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the Loan
Parties will not make such payment, the Administrative Agent may assume that the
Loan Parties have made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Loan Parties have not
in fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
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(e) If any Lender shall fail to make any payment required to be made by it
pursuant to this Agreement, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
Section 2.26 Taxes
(a) Any and all payments by or on account of any obligation of the Loan
Parties hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes, provided that
if the Loan Parties shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Loan
Parties shall make such deductions and (iii) the Loan Parties shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Loan Parties shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Loan
Parties hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section but without duplication of any amounts payable by the Loan Parties
under Section 2.26(a) or Section 2.26(b)) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Loan Parties by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank setting forth in reasonable detail the manner in
which such amount was determined, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Loan Parties to a Governmental Authority, the Loan Parties shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
in withholding tax shall deliver to the Loan Parties and the Administrative
Agent two copies of either United States Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Foreign Lender's claiming exemption from or
reduction in U.S. Federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Foreign Lender
delivers a Form W-8, a certificate representing that such Foreign Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Loan
Parties and is not a controlled foreign corporation related to the Loan Parties
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Foreign Lender claiming complete exemption from or reduced
rate of, U.S. Federal withholding tax on payments by the Loan Parties under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Foreign Lender on or before the date it becomes a party to this Agreement (or,
in the case of a transferee that is a participation holder, on or before the
date such participation holder becomes a transferee hereunder) and on or before
the date, if any, such Foreign Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Foreign Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Foreign Lender.
Notwithstanding any other provision of this Section 2.26(e), a Foreign Lender
shall not be required to deliver any form pursuant to this 2.26(e) that such
Foreign Lender is not legally able to deliver.
(f) The Loan Parties shall not be required to indemnify any Foreign Lender
or to pay any additional amounts to any Foreign Lender in respect of U.S.
Federal withholding tax pursuant to paragraph (a) or (c) above to the extent
that the obligation to pay such additional amounts would not have arisen but for
a failure by such Foreign Lender to comply with the provisions of paragraph (e)
above.
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Section 2.27 Security Interest in Collateral
To secure their Obligations under this Agreement and the other Loan
Documents, the Loan Parties shall grant to the Collateral Agent, for its benefit
and the ratable benefit of the other Secured Parties, a first-priority security
interest in all of the Collateral pursuant hereto and to the Security Documents,
subject only to Permitted Encumbrances and the terms of the Borrowing Order.
Section 2.28 Mitigation Obligations; Replacement of Lenders
(a) If any Lender requests compensation under Section 2.23, or if the Loan
Parties are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.26,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.23 or 2.26, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Loan
Parties hereby agree to pay all reasonable and documented costs and expenses
incurred by any Lender in connection with any such designation or assignment;
provided, however, that the Loan Parties shall not be liable for such costs and
expenses of a Lender requesting compensation if (i) such Lender becomes a party
to this Agreement on a date after the Closing Date and (ii) the relevant Change
in Law occurs on a date prior to the date such Lender becomes a party hereto.
(b) If any Lender requests compensation under Section 2.23, or if the Loan
Parties are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.26,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Loan Parties may, at their sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Loan Parties
shall have received the prior written consent of the Administrative Agent, the
Issuing Bank and Swingline Lender, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Loan
Parties (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.23 or
payments required to be made pursuant to Section 2.26, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Loan Parties to require such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders that:
Section 3.1 Organization; Powers
Each Loan Party is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and, to the extent applicable, is in good standing in, every jurisdiction where
such qualification is required.
Section 3.2 Authorization; Enforceability
The transactions contemplated hereby and by the other Loan Documents to be
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by each
Loan Party that is a party hereto and, when the Interim Borrowing Order is
entered by the Bankruptcy Court in the Proceedings, constitutes, and each other
Loan Document to which any Loan Party is a party, when executed and delivered by
such Loan Party and when the Interim Borrowing Order is entered by the
Bankruptcy Court in the Proceedings, will constitute, a legal, valid and binding
obligation of such Loan Party (as the case may be), enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
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Section 3.3 Governmental Approvals; No Conflicts
The transactions to be entered into contemplated by the Loan Documents (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for the approval of the
Bankruptcy Court in the Proceedings and such others as have been obtained or
made and are in full force and effect and except filings and recordings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument entered into after the commencement of the
Proceedings binding upon any Loan Party or its assets, or give rise to a right
thereunder to require any payment to be made by any Loan Party, and (d) will not
result in the creation or imposition of any Lien on any asset of any Loan Party,
except Liens created under the Loan Documents.
Section 3.4 Financial Condition
▇▇▇▇▇▇-▇▇▇▇▇▇ has heretofore furnished to the Lenders (i) its Form 10-K
filed with the Securities and Exchange Commission (including a consolidated
balance sheet and statements of income, stockholders' equity and cash flows) for
the fiscal year ending February 29, 2000, and (ii) its Form 10-Q filed with the
Securities and Exchange Commission (including a consolidated balance sheet and
statements of income, stockholders' equity and cash flows) for the fiscal
quarter ending May 31, 2000. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of ▇▇▇▇▇▇-▇▇▇▇▇▇ and its consolidated subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes.
Section 3.5 Properties
(a) Except as disclosed in Schedule 3.05, each Loan Party has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for defects which could not reasonably be expected to
have a Material Adverse Effect.
(b) Each Loan Party owns, or is licensed to use, all trademarks, trade
names, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Loan Parties does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Schedule 3.05 sets forth the address (including county) of all Real
Estate that is owned or leased by the Loan Parties as of the Closing Date,
together with a list of the holders of any mortgage or other Lien thereon.
Section 3.6 Litigation and Environmental Matters
(a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of any Loan
Party, threatened against or affecting any Loan Party (i) which is not stayed by
the commencement of the Proceedings and as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Loan Documents.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, no Loan Party (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or could reasonably be expected to result in, a Material Adverse
Effect, except by virtue of the commencement of the Proceedings.
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Section 3.7 Compliance with Laws and Agreements
Each Loan Party is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
material agreements and other instruments binding upon it or its property,
except to the extent the Loan Parties are not required to comply therewith
during the pendency of the Proceedings or enforcement of remedies on account of
the failure to comply therewith is stayed in the Proceedings, and except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
Section 3.8 Investment and Holding Company Status
No Loan Party is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
Section 3.9 Taxes
Each Loan Party has timely filed or caused to be filed all tax returns and
reports required to have been filed and has paid or caused to be paid all taxes
required to have been paid by it, except (a) taxes that are being contested in
good faith by appropriate proceedings, for which such member, as applicable, has
set aside on its books adequate reserves, and as to which no Lien has arisen, or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect, or (c) taxes which were unpaid as of the
commencement of the Proceedings.
Section 3.10 ERISA
No ERISA Event has occurred or is reasonably expected to occur which is not
stayed by virtue of the commencement of the Proceedings and that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. The present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $500,000 the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
by more than $1,000,000 the fair market value of the assets of all such
underfunded Plans.
Section 3.11 Disclosure
The Loan Parties have disclosed to the Lenders all agreements, instruments
and corporate or other restrictions to which any Loan Party is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. None of any
of the reports, financial statements, certificates or other information
furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other Loan
Document or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Section 3.12 Subsidiaries
Schedule 3.12 sets forth the name of, and the ownership interest of
▇▇▇▇▇▇-▇▇▇▇▇▇ in, each Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇ and identifies each
Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.
The Loan Parties are not party to any joint venture, general or limited
partnership, or limited liability company, agreements or any other business
ventures or entities.
Section 3.13 Insurance
Schedule 3.13 sets forth a description of all insurance maintained by or on
behalf of the Loan Parties and their Subsidiaries as of the Closing Date. As of
the Closing Date, all premiums in respect of such insurance that are due and
payable have been paid.
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Section 3.14 Labor Matters
As of the Closing Date, there are no strikes, lockouts or slowdowns against
any Loan Party pending or, to the knowledge of the Loan Parties, threatened. The
hours worked by and payments made to employees of the Loan Parties have not been
in violation of the Fair Labor Standards Act or any other applicable federal,
state, local or foreign law dealing with such matters to the extent that any
such violation could reasonably be expected to have a Material Adverse Effect.
All post-Proceeding payments due from any Loan Party, or for which any claim may
be made against any Loan Party, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of such member. The consummation of the transactions contemplated
by the Loan Documents will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Loan Party is bound.
Section 3.15 Security Documents
(a) The Borrowing Order creates in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement), and the
Borrowing Order constitutes the creation of a fully perfected first priority
Lien on, and security interest in, all right, title and interest of the pledgor
thereunder in such Collateral, in each case prior and superior in right to any
other person, except as otherwise provided in the Borrowing Order.
(b) The Borrowing Order creates in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Security Agreement), and the
Borrowing Order constitutes the creation of a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in such Collateral (other than the Intellectual Property (as defined in the
Security Agreement), in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by Section 6.02 and
as otherwise provided in the Borrowing Order.
(c) The Borrowing Order creates a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the Security Agreement), in each case prior
and superior in right to any other person, except as otherwise provided in the
Borrowing Order.
(d) The Borrowing Order creates in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, legal, valid and enforceable mortgage
and security interests in the Real Estate which constitute fully perfected Liens
on, and security interests in, all right, title and interest of the grantors
thereunder in such Real Estate, in each case prior and superior in right to any
other person, other than with respect to Liens as expressly provided in the
Borrowing Order.
Section 3.16 Federal Reserve Regulations
(a) No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to buy or carry Margin Stock or to extend credit to others for
the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation U or X.
(c) Less than 25% of the assets of the Loan Parties on a consolidated basis
consist of Margin Stock.
ARTICLE IV
CONDITIONS
Section 4.1 Closing Date
The obligation of the Tranche A Lenders to make each Tranche A Loan, the
Tranche B Lenders to make the Tranche B Loans and of the Issuing Bank to issue
each Letter of Credit, including the initial Loan and the initial Letter of
Credit, is subject to the following conditions precedent:
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(a) The Agents (or their counsel) shall have received from each party
hereto other than the Tranche A Lenders and Tranche B Lenders either (i) a
counterpart of this Agreement and all other Loan Documents signed on behalf of
such party or (ii) written evidence satisfactory to the Agents (which may
include telecopy transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement and all other Loan
Documents.
(b) The Agents shall have received a favorable written opinion (addressed
to each Agent and the Lenders and dated the Closing Date) of each of (i)
McGuireWoods, LLP, counsel for the Loan Parties substantially in the form of
Exhibit D-1, and (ii) Willkie, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, bankruptcy counsel for the Loan
Parties, substantially in the form of Exhibit D-2, and, in the case of each such
opinion required by this paragraph, covering such other matters relating to the
Loan Parties, the Loan Documents or the transactions contemplated thereby as the
Required Lenders shall reasonably request. The Loan Parties hereby request such
counsel to deliver such opinions.
(c) The Agents shall have received such documents and certificates as the
Agents or their counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
transactions contemplated by the Loan Documents and any other legal matters
relating to the Loan Parties, the Loan Documents or the transactions
contemplated thereby, all in form and substance satisfactory to the Agents and
their counsel.
(d) After giving effect to the first funding under the Loans; any charges
to the Loan Account made in connection with the establishment of the credit
facility contemplated hereby; and Letters of Credit to be issued at, or
immediately subsequent to, such establishment, Excess Availability shall be not
less than [$145,000,000]. The Agents shall have received a Borrowing Base
Certificate dated the Closing Date, relating to the calendar week ended on
August 11, 2000, and executed by a Financial Officer of the Loan Parties.
(e) The consummation of the transactions contemplated hereby shall not (a)
violate any applicable law, statute, rule or regulation or (b) conflict with, or
result in a default or event of default under, any material agreement of any
Loan Party (except to the extent the Loan Parties are not required to comply
therewith in the Proceedings or enforcement of remedies on account of the
failure to comply therewith is stayed in the Proceedings).
(f) All necessary consents and approvals to the transactions contemplated
hereby shall have been obtained and shall be satisfactory to the Agents. Without
limiting the foregoing, there shall have been entered in the Proceedings an
Interim Borrowing Order in the form of Exhibit B hereto (or such other form as
the Agents may approve), which order shall not have been stayed, modified,
appealed, reversed or otherwise affected.
(g) There shall have been completed the due diligence investigation by the
Administrative Agent and the Administrative Agents' counsel with results
satisfactory to the Administrative Agent and its counsel, including inventory
collateral examinations, examinations of the Loan Parties' books and records,
and appraisals of inventory.
(h) The Agents shall be satisfied that any financial statements delivered
to them fairly present the business and financial condition of the Loan Parties,
and that, other than the commencement of the Proceedings, there has been no
material adverse change in the assets, business, financial condition, income or
prospects of the Loan Parties since the date of the most recent financial
information delivered to the Agents.
(i) There shall not be pending any litigation or other proceeding which is
not stayed by the commencement of the Proceedings, the result of which could
reasonably be expected to have a Material Adverse Effect.
(j) The Collateral Agent shall have received results of searches or other
evidence satisfactory to the Collateral Agent (in each case dated as of a date
reasonably satisfactory to the Collateral Agent) indicating the absence of liens
on the assets of the Loan Parties, except for (i) liens for which termination
statements and releases reasonably satisfactory to the Collateral Agent are
being tendered concurrently with such extension of credit and (ii) liens in
favor of Wachovia Bank, N.A., as collateral agent, and (iii) liens on inventory
returned or repossessed as a result of a default on any retail installment sale
contract transferred to the ▇▇▇▇▇▇-▇▇▇▇▇▇ Master Trust (except that any such
liens described in clauses (ii) and (iii) may not extend to the Loan Parties'
inventory or other assets which are the subject of the Borrowing Base).
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(k) The Agents shall be reasonably satisfied with the Loan Parties' cash
management system, including, without limitation, the ability of the Loan
Parties to segregate the proceeds of the Collateral Agent's first priority lien
collateral from proceeds of other of the Loan Parties' assets (including,
without limitation, the Non-Concentrated Proceeds).
(l) The Agents shall be satisfied with the terms and nature of any adequate
protection granted by the Loan Parties or ordered by the Bankruptcy Court in the
Proceedings in favor of any of the Loan Parties' pre-petition creditors,
including, without limitation, with respect to any adequate protection involving
the grant of junior liens on the Collateral and/or of junior superpriority
claims.
(m) No material changes in governmental regulations or policies affecting
the Loan Parties, the Agents, the Syndication Agent or any Lender involved in
this transaction shall have occurred prior to the Closing Date.
(n) There shall not have occurred any disruption or material adverse change
in the financial or capital markets in general that would, in the opinion of the
Agents, have a material adverse effect on the market for loan syndications or
adversely affecting the syndication of the Loans.
(o) There shall have been delivered to the Administrative Agent such
additional instruments and documents as the Agents or counsel to the Agents
reasonably may require or request.
The Administrative Agent shall notify the Loan Parties and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 12:00 noon, Boston time, on August 22, 2000, (and, in the event such
conditions are not so satisfied or waived, this Agreement shall terminate at
such time).
Section 4.2 Conditions Precedent to Each Loan and Each Letter of Credit
In addition to those conditions described in Section 4.01, the obligation
of the Tranche A Lenders to make each Tranche A Loan and of the Issuing Bank to
issue each Letter of Credit, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a notice with
respect to such borrowing or issuance, as the case may be, as required by
Article II.
(b) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in
writing in connection herewith or therewith shall be true and correct in all
material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date, other than representations and warranties that relate solely to an
earlier date.
(c) No Default. On the date of each Borrowing hereunder and the issuance of
each Letter of Credit, the Loan Parties shall be in compliance with all of the
terms and provisions set forth herein and in the other Loan Documents to be
observed or performed and no Default or Event of Default shall have occurred and
be continuing.
(d) Borrowing Base Certificate. The Administrative Agent shall have
received the timely delivery of the most recently required Borrowing Base
Certificate (ending on the Saturday of the immediately preceding week), with
each such Borrowing Base Certificate including schedules as required by the
Administrative Agent.
(e) Advances Against Real Estate. Prior to making any advances against
Eligible Real Estate, (i) the Collateral Agent shall have received (A)
appraisals by a third party appraiser acceptable to the Collateral Agent; and
(B) title insurance, environmental site assessments, and other real estate items
with respect to such parcel of Real Estate, as may be reasonably requested by
the Collateral Agent, including, but not limited to, those items required by
FIRREA, and (ii) the Agents shall have received a business plan for the Loan
Parties in conformity with the provisions of Section 5.01(g) hereof, and (iii)
the Final Borrowing Order shall have been entered in the Proceedings, which
order shall not have been stayed, modified, appealed, reversed or otherwise
affected.
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The request by the Loan Parties for, and the acceptance by the Loan Parties of,
each extension of credit hereunder shall be deemed to be a representation and
warranty by the Loan Parties that the conditions specified in this Section 4.02
have been satisfied at that time and that after giving effect to such extension
of credit the Loan Parties shall continue to be in compliance with the Borrowing
Base.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all L/C
Disbursements shall have been reimbursed, each Loan Party covenants and agrees
with the Lenders that:
Section 5.1 Financial Statements and Other Information
The Loan Parties will furnish to the Agents:
(a) within 90 days after the end of each fiscal year of ▇▇▇▇▇▇-▇▇▇▇▇▇, its
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all audited
and reported on by independent public accountants of recognized national
standing (without any qualification or exception as to the scope of such audit,
except for qualifications and exceptions resulting from the commencement and
pendency of the Proceedings) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of ▇▇▇▇▇▇-▇▇▇▇▇▇ and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of ▇▇▇▇▇▇-▇▇▇▇▇▇, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of ▇▇▇▇▇▇-▇▇▇▇▇▇ and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each fiscal month of ▇▇▇▇▇▇-▇▇▇▇▇▇, its
consolidated monthly operating results as of the end of and for such fiscal
month, with a comparison to the business plan, a summary of all Capital
Expenditures made during the subject month, and, without duplication, a monthly
operating report consistent with, and containing the information set forth in,
the report filed by the Loan Parties with the Bankruptcy Court in the
Proceedings;
(d) concurrently with any delivery of financial statements under clause
(a), (b), or (c) above, a certificate of a Financial Officer of the Loan Parties
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, and (ii) setting forth reasonably detailed
calculations with respect to the performance covenants included in the
definition of "Applicable Margin", and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of ▇▇▇▇▇▇-▇▇▇▇▇▇'
audited financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) concurrently with any delivery of financial statements under clause (c)
above, a consolidated statement of projected cash flow prepared on a weekly
basis for the following 8 week period;
(g) no later than five (5) Business Days prior to the initial date
established in the Proceedings for a hearing to approve the Final Borrowing
Order, a business plan for the succeeding twelve month period, which business
plan shall be reasonably satisfactory in form and substance to the Agents.
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(h) within 30 days following the commencement of each fiscal year of
▇▇▇▇▇▇-▇▇▇▇▇▇, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year) and,
promptly when available, any significant revisions of such budget;
(i) on Thursday of each week (or such more frequent periods as the
Administrative Agent may require, in its discretion, at any time that Excess
Availability is less than $25,000,000), a certificate in the form of Exhibit E
(a "Borrowing Base Certificate") showing the Borrowing Base as of the close of
business on the last day of the immediately preceding week, each such
Certificate to be certified as complete and correct on behalf of the Loan
Parties by a Financial Officer of the Loan Parties;
(j) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Loan Party with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, as the case may be;
(k) promptly upon receipt thereof, copies of all reports submitted to the
Loan Parties by independent certified public accountants in connection with each
annual, interim or special audit of the books of the Loan Parties or any of its
Subsidiaries made by such accountants, including any management letter
commenting on the Loan Parties' internal controls submitted by such accountants
to management in connection with their annual audit;
(l) copies, when so filed or submitted, of any pleading filed in the
Proceedings by or on behalf of any of the Loan Parties or the submission by or
on behalf of any of the Loan Parties of any report or financial statement to the
Bankruptcy Court in which the Proceedings are pending or the office of the
United States Trustee, or the submission by or on behalf of any of the Loan
Parties of any financial statement to any committee appointed in the
Proceedings;
(m) the financial and collateral reports described on Schedule 5.01(m)
hereto, at the times set forth in such Schedule;
(n) daily, a detailed summary of the Net Proceeds received from any
Prepayment Event;
(o) notice of any intended bulk sale, liquidation, or other disposition of
assets of the Loan Parties two (2) Business Days prior to the date of
consummation such sale or disposition, or commencement of such liquidation, and
a detailed summary of the Net Proceeds expected to be received therefrom. Such
notice shall be in addition to any notices which may be required to be furnished
the Agents and the Lenders hereunder or under the Bankruptcy Code in connection
with any hearings in the Proceedings to approve any such sale, liquidation or
disposition; and
(p) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Loan
Party, or compliance with the terms of any Loan Document, as the Agents or any
Lender may reasonably request.
Section 5.2 Notices of Material Events
The Loan Parties will furnish to the Administrative Agent, the Issuing
Bank, the Collateral Agent, and each Lender prompt written notice of the
following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
(e) any change in any Loan Party's executive officers.
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(f) any failure by any Loan Party to pay rent becoming due subsequent to
the commencement of the Proceedings and payable as an administrative expense at
any of such Loan Party's locations, which failure continues for more than ten
(10) days following the day on which such rent first came due.
(g) the discharge by any Loan Party of their present independent
accountants or any withdrawal or resignation by such independent accountants.
(h) the discharge by any Loan Party of any restructuring consultant engaged
in accordance with Section 5.13 hereof or any withdrawal or resignation by any
such restructuring consultant.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Loan Parties setting forth
the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto.
Section 5.3 Information Regarding Collateral
(a) The Loan Parties will furnish to the Agents prompt written notice of
any change (i) in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the establishment of any such new office or
facility), (iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number. The Loan Parties also
agree promptly to notify the Agents if any material portion of the Collateral is
damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01, the
Loan Parties shall deliver to the Agents a certificate of a Financial Officer of
the Loan Parties setting forth the information required pursuant to Section 2 of
the Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section.
Section 5.4 Existence; Conduct of Business
Each Loan Party will, and will cause each of the Subsidiaries to, do or
cause to be done all things necessary to comply with its respective charter,
certificate of incorporation, articles of organization, and/or other
organizational documents, as applicable; and by-laws and/or other instruments
which deal with corporate governance, and to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business, provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
Section 5.5 Payment of Obligations
Each Loan Party will, and will cause each of the Subsidiaries to, pay its
Indebtedness and other obligations, including tax liabilities, arising
subsequent to, or not stayed by, the commencement of the Proceedings before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Loan Party or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (c) such contest effectively
suspends collection of the contested obligation and enforcement of any Lien
securing such obligation and (d) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
Nothing contained herein shall be deemed to limit the rights of the
Administrative Agent under Section 2.02(b) hereof.
Section 5.6 Maintenance of Properties
Each Loan Party will, and will cause each of the Subsidiaries to, keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted and with the exception of
storing closings and asset dispositions permitted hereunder.
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Section 5.7 Insurance
(a) Each Loan Party shall (i) maintain insurance with financially sound and
reputable insurers reasonably acceptable to the Administrative Agent (or, to the
extent consistent with prudent business practice, a program of self-insurance
approved by the Administrative Agent) on such of its property and in at least
such amounts and against at least such risks as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
occurring upon, in or about or in connection with the use of any properties
owned, occupied or controlled by it (including the insurance required pursuant
to the Security Documents); (ii) maintain such other insurance as may be
required by law; and (iii) furnish to the Administrative Agent, upon written
request, full information as to the insurance carried.
(b) Fire and extended coverage policies maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in form and
substance satisfactory to the Collateral Agent, which endorsements or amendments
shall provide that the insurer shall pay all proceeds otherwise payable to the
Loan Parties or the other Loan Parties under the policies directly to the
Collateral Agent, (ii) a provision to the effect that none of the Loan Parties,
the Administrative Agent, the Collateral Agent, or any other party shall be a
coinsurer and (iii) such other provisions as the Collateral Agent may reasonably
require from time to time to protect the interests of the Lenders. Commercial
general liability policies shall be endorsed to name the Collateral Agent as an
additional insured. Business interruption policies shall name the Collateral
Agent as a loss payee and shall be endorsed or amended to include (i) a
provision that, from and after the Closing Date, the insurer shall pay all
proceeds otherwise payable to the Loan Parties under the policies directly to
the Administrative Agent or the Collateral Agent, (ii) a provision to the effect
that none of the Loan Parties, the Administrative Agent, the Collateral Agent or
any other party shall be a co-insurer and (iii) such other provisions as the
Collateral Agent may reasonably require from time to time to protect the
interests of the Lenders. Each such policy referred to in this paragraph also
shall provide that it shall not be canceled, modified or not renewed (i) by
reason of nonpayment of premium except upon not less than 30 days' prior written
notice thereof by the insurer to the Collateral Agent (giving the Collateral
Agent the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon not less than 60 days' prior written notice thereof by
the insurer to the Collateral Agent. The Loan Parties shall deliver to the
Collateral Agent, prior to the cancelation, modification or nonrenewal of any
such policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Collateral Agent)
together with evidence satisfactory to the Collateral Agent of payment of the
premium therefor.
Section 5.8 Casualty and Condemnation
Each Loan Party will furnish to the Agents and the Lenders prompt written
notice of any casualty or other insured damage to any material portion of any
Collateral or the commencement of any action or proceeding for the taking of any
material portion of the Collateral or any part thereof or interest therein under
power of eminent domain or by condemnation or similar proceeding.
Section 5.9 Books and Records; Inspection and Audit Rights
(a) Each Loan Party will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each Loan Party will, and will cause each of the Subsidiaries to,
permit any representatives designated by any Agent, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
(b) Each Loan Party will, and will cause each of the Subsidiaries to, from
time to time upon the request of the Collateral Agent or the Required Lenders
through the Administrative Agent, permit any Agent or professionals (including
investment bankers, consultants, accountants, lawyers and appraisers) retained
by the Agents to conduct evaluations and appraisals of (i) the Loan Parties'
practices in the computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base and related financial information such as, but not limited
to, sales, gross margins, payables, accruals and reserves, and pay the
reasonable and documented fees and expenses of the Agents or such professionals
with respect to such evaluations and appraisals
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Section 5.10 Compliance with Laws
Each Loan Party will, and will cause each of the Subsidiaries to, comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Each Loan Party will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders entered in
or relating to the Proceedings.
Section 5.11 Use of Proceeds and Letters of Credit
The proceeds of Loans made hereunder and Letters of Credit issued hereunder
will be used only (a) to finance the acquisition of working capital assets of
the Loan Parties, including the purchase of inventory and equipment, in each
case in the ordinary course of business and (b) to finance Capital Expenditures
of the Loan Parties, and (c) for general corporate purposes. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
Section 5.12 Additional Subsidiaries
If any additional Subsidiary is formed or acquired after the Closing Date,
the Loan Parties will notify the Agents and the Lenders thereof and (a) if such
Subsidiary is not a Foreign Subsidiary, the Loan Parties will cause such
Subsidiary to become a Subsidiary Loan Party hereunder and each applicable
Security Document in the manner provided therein within three Business Days
after such Subsidiary is formed or acquired and promptly take such actions to
create and perfect Liens on such Subsidiary's assets to secure the Obligations
as any Agent or the Required Lenders shall reasonably request and (b) if any
shares of capital stock or Indebtedness of such Subsidiary are owned by or on
behalf of any Loan Party, the Loan Parties will cause such shares and promissory
notes evidencing such Indebtedness to be pledged pursuant to the Pledge
Agreement within three Business Days after such Subsidiary is formed or acquired
(except that, if such Subsidiary is a Foreign Subsidiary, shares of stock of
such Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to
65% of the outstanding shares of voting stock of such Subsidiary).
Section 5.13 Restructuring Consultant
The Loan Parties shall engage a restructuring consultant acceptable to the
Agents, and the Loan Parties shall have obtained any necessary approvals of the
Bankruptcy Court in the Proceedings therefor on or before August 31, 2000. In
the event that such consultant resigns or is terminated, the Loan Parties shall
engage a replacement consultant acceptable to the Agents within thirty (30) days
after the date of such termination or resignation. The identity of each such
consultant and the terms of employment and responsibilities of each such
consultant shall be reasonably acceptable to the Administrative Agent.
Section 5.14 Further Assurances
(a) Each Loan Party will, and will cause each Subsidiary Loan Party to,
execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements and other documents), that may be required
under any applicable law, or which any Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Loan Parties also
agree to provide to the Agents, from time to time upon request, evidence
reasonably satisfactory to the Agents as to the perfection and priority of the
Liens created or intended to be created by the Security Documents.
(b) If any material assets are acquired by any Loan Party after the Closing
Date (other than assets constituting Collateral under the Security Agreement
that become subject to the Lien of the Security Agreement upon acquisition
thereof), the Loan Parties will notify the Agents and the Lenders thereof, and
the Loan Parties will cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the Subsidiary Loan Parties to take, such
actions as shall be necessary or reasonably requested by any Agent or the
Required Lenders to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties.
(c) Upon the request of the Administrative Agent, the Loan Parties shall
cause each of its customs brokers to deliver an agreement to the Administrative
Agent covering such matters and in such form as the Administrative Agent may
reasonably require.
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ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all L/C Disbursements shall
have been reimbursed, each Loan Party covenants and agrees with the Lenders
that:
Section 6.1 Indebtedness and Other Obligations
(a) The Loan Parties will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness arising prior to the commencement of the Proceedings and
set forth in Schedule 6.01;
(iii)Indebtedness of any Loan Party to any other Loan Party;
(iv) Guarantees by any Loan Party of Indebtedness of any other Loan Party
provided that Guarantees by any Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.04;
(v) Indebtedness of any Loan Party incurred subsequent to the commencement
of the Proceedings to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity
date or decreased weighted average life thereof, provided that (A)
such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and
(B) the aggregate principal amount of Indebtedness permitted by this
clause (v) shall not exceed $10,000,000 at any time outstanding;
(vi) Indebtedness of any Person that becomes a Subsidiary after the date
hereof, provided that (A) such Indebtedness exists at the time such
Person becomes a Subsidiary and is not created in contemplation of or
in connection with such Person becoming a Subsidiary and (B) the
aggregate principal amount of Indebtedness permitted by this clause
(vi) shall not exceed $5,000,000 at any time outstanding;
(vii)other unsecured Indebtedness arising subsequent to the commencement of
the Proceedings in an aggregate principal amount not exceeding
$10,000,000 at any time outstanding; and
(viii) Indebtedness in connection with insurance premium financing
contracts entered into in the ordinary course of business.
(b) None of the Loan Parties will, nor will they permit any Subsidiary to,
issue any preferred stock (except for preferred stock (i) all dividends in
respect of which are to be paid (and all other payments in respect of which are
to be made) in additional shares of such preferred stock, in lieu of cash, until
the date that is at least 360 days following the Maturity Date, (ii) that is not
subject to redemption other than redemption at the option of the Loan Party
issuing such preferred stock and (iii) all payments in respect of which are
expressly subordinated to the Obligations) or be or become liable in respect of
any obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other payment in respect of (i) any shares of capital stock of any Loan
Party or (ii) any option, warrant or other right to acquire any such shares of
capital stock.
Section 6.2 Liens
The Loan Parties will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
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(c) any Lien on any property or asset of any Loan Party set forth in
Schedule 6.02, provided that (i) such Lien shall not apply to any other property
or asset of any Loan Party and (ii) such Lien shall secure only those
obligations that it secures as of the Closing Date, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(d) any Lien existing on any property or asset (exclusive of any Accounts
or Inventory) prior to the acquisition thereof by the Loan Parties or existing
on any property or asset (exclusive of any Accounts or Inventory) of any Person
that becomes a Subsidiary after the date hereof prior to the time such Person
becomes a Subsidiary, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Parties or any Subsidiary and (iii) such Lien
shall secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or improved by
any Loan Party, provided that (i) such Liens secure Indebtedness permitted by
clause (v) of Section 6.01(a), (ii) such Liens and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring, constructing or improving
such fixed or capital assets and (iv) such Liens shall not apply to any other
property or assets of the Loan Parties; and
(f) Liens created on insurance refunds and rebates in connection with
insurance premium financing contracts permitted by Section 6.01(a)(viii).
Section 6.3 Fundamental Changes
(a) The Loan Parties will not merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing, (i) any
Subsidiary may merge into ▇▇▇▇▇▇-▇▇▇▇▇▇ in a transaction in which ▇▇▇▇▇▇-▇▇▇▇▇▇
is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary
Loan Party in a transaction in which the surviving entity is a Subsidiary Loan
Party, (iii) any Subsidiary that is not a Loan Party may merge into any
Subsidiary that is not a Loan Party, provided that any such merger involving a
Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04.
(b) The Loan Parties will not engage to any material extent in any business
other than businesses of the type conducted by the Loan Parties on the date of
execution of this Agreement and businesses reasonably related thereto.
Section 6.4 Investments, Loans, Advances, Guarantees and Acquisitions
The Loan Parties will not purchase, hold or acquire (including pursuant to
any merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a) Permitted Investments;
(b) investments existing on the Closing Date, and set forth on Schedule
6.04, to the extent such investments would not be permitted under any other
clause of this Section;
(c) loans or advances made by any Loan Party to any other Loan Party,
provided that any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement;
(d) Guarantees constituting Indebtedness permitted by Section 6.01,
provided that the amount of Indebtedness that is (i) outstanding with respect to
Subsidiaries that are not Loan Parties and (ii) Guaranteed by any Loan Party
shall not exceed (together with amounts described in subparagraphs (c) and (d)
hereof) $2,000,000 in the aggregate at any time outstanding;
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(e) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business; and
(f) loans or advances to employees for the purpose of travel, entertainment
or relocation in the ordinary course of business in an aggregate amount not to
exceed $1,500,000 at any time outstanding.
Section 6.5 Asset Sales
The Loan Parties will not, and will not permit any of the Subsidiaries to,
sell, transfer, lease or otherwise dispose of any asset, including any capital
stock, nor will the Loan Parties permit any of the Subsidiaries to issue any
additional shares of its capital stock or other ownership interest in such
Subsidiary, except:
(a) (i) sales of Inventory in the ordinary course of business, or (ii) used
or surplus equipment and Permitted Investments in the ordinary course of
business;
(b) sales, transfers and dispositions among the Loan Parties, provided that
any such sales, transfers or dispositions involving a Subsidiary that is not a
Loan Party shall be made in compliance with Section 6.08;
(c) sales of Real Estate and fixtures relating to such Real Estate on such
terms and conditions as may be reasonably acceptable to the Agents, but in no
event shall the Net Proceeds from the sale of any Eligible Real Estate be less
than the aggregate Release Prices for all Eligible Real Estate which is the
subject of any such sale, except as otherwise permitted hereby;
(d) other asset sales on such terms and conditions as may be reasonably
acceptable to the Agents, provided that the amount of such sales (i) shall not
exceed 50% of total consolidated assets (as reflected in ▇▇▇▇▇▇-▇▇▇▇▇'▇
consolidated balance sheet delivered to the Agents as of the Closing Date) in
the aggregate from and after the date of this Agreement, or (ii) for sale of
Inventory not in the ordinary course of business, shall not exceed $150,000,000
of Inventory at Cost in the aggregate from and after the date of this Agreement.
Without limiting the generality of the foregoing, such asset sales may include
sales of Inventory in bulk at any store to a liquidator (x) for a price at least
equal to the then Inventory Advance Rate of the Cost of such Inventory and (y)
on such other terms, such methodology and such bidding procedures as may be
acceptable to the Agents;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than sales, transfers and other disposition permitted under clause
(b)) shall be made at arm's length and for fair value and solely for cash
consideration (other than (x) sales, transfers and other dispositions permitted
under clause (b) and (y) sales of Real Estate on terms as to which the Agent in
its reasonable discretion has furnished its prior written consent); and further
provided that the authority granted under clauses (a) through (d) hereof may be
terminated in whole or in part by the Agents upon the occurrence and during the
continuance of any Event of Default.
Section 6.6 Restricted Payments; Certain Payments of Indebtedness
(a) ▇▇▇▇▇▇-▇▇▇▇▇▇ will not declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment.
(b) The Loan Parties will not, and will not permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of regularly scheduled interest and principal payments as and
when due in respect of any permitted Indebtedness incurred subsequent
to the commencement of the Proceedings or for payments required or
permitted to be made pursuant to an order of the Bankruptcy Court in
the Proceedings for adequate protection payments pursuant to the
Bankruptcy Code;
(ii) refinancings of Indebtedness described in clause (i), above, to the
extent permitted by Section 6.01;
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(iii)payments in an amount not to exceed $2,000,000 to fund a reclamation
program, the terms of which are subject to the Agent's reasonable
consent.
(iv) payments of all pre-petition claims (A) authorized by First Day Orders
at any time after such First Day Orders are entered by the Bankruptcy
Court in the Proceedings, and (B) subject to the entry of appropriate
orders of the Bankruptcy Court in the Proceedings and as long as no
Default or Event of Default then exists or would arise therefrom, up
to an additional $500,000 during the pendency of the Proceedings.
Section 6.7 Transactions with Affiliates
The Loan Parties will not, and will not permit any Subsidiary to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business that are at prices and on terms and conditions not
less favorable to the Loan Parties or such Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties, and (b) transactions between
or among the Loan Parties not involving any other Affiliate.
Section 6.8 Restrictive Agreements
The Loan Parties will not, and will not permit any Subsidiary to, directly
or indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Loan Parties or any Subsidiary to create, incur or permit to
exist any Lien upon any of its property or assets or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Loan Parties or
any other Subsidiary or to Guarantee Indebtedness of the Loan Parties or any
other Subsidiary, provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions identified on Schedule
6.08 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment or subleasing thereof.
Section 6.9 Amendment of Material Documents
The Loan Parties will not, and will not permit any Subsidiary to, amend,
modify or waive any of its rights under (a) its certificate of incorporation,
by-laws or other organizational documents, (b) any leases or subleases relating
to Real Estate, or (c) any other instruments, documents or agreements entered
into prior to the commencement of the Proceedings, in each case to the extent
that such amendment, modification or waiver would be adverse to the interests of
the Lenders.
Section 6.10 Additional Subsidiaries
The Loan Parties will not, and will not permit any Subsidiary to, create
any additional Subsidiary, unless such Subsidiary is a Loan Party.
Section 6.11 Return of Property
Without the prior written consent of the Administrative Agent, the Loan
Parties shall not consent to or suffer the entry of an order in the Proceedings
which authorizes the return of any of the Loan Parties' property pursuant to
ss.546(g)* of the Bankruptcy Code.
Section 6.12 Capital Expenditures
The Loan Parties shall not make or incur Capital Expenditures in any fiscal
year in excess of $25,000,000 in the aggregate.
Section 6.13 Excess Availability
The Loan Parties shall at all times maintain Excess Availability in an
amount equal to (a) $15,000,000 until the Agents have received a business plan
in conformity with the provisions of Section 5.01(g) hereof, and (b) thereafter,
the greater of $10,000,000 or 10% of the amounts available to be borrowed
pursuant to clauses (a), (b), and (c) of the definition of Borrowing Base.
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Section 6.14 Bankruptcy Proceedings
The Loan Parties will not, and will not permit any Subsidiaries to, seek,
consent, suffer to exist (a) any modification, stay, vacation or amendment to
the Borrowing Orders; or (b) a priority claim for any administrative expense or
unsecured claim against any Loan Party (now existing or hereafter arising of any
kind or nature whatsoever, including, without limitation, any administrative
expense of the kind specified in ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇(▇), 503(b),
506(c), 507(a), 507(b), 546(c), 546(d), or 1114 of the Bankruptcy Code) equal or
superior to the priority claim of the Agents and the Lenders in respect of the
Obligations, except with respect to the Carve Out; and (c) any Lien on any
Collateral, having a priority equal or superior to the Liens of the Collateral
Agent and the Lenders except for Permitted Encumbrances having priority under
applicable law over the Lien of the Collateral Agent.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 If any of the following events ("Events of Default") shall occur:
(a) the Loan Parties shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Loan Parties shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made;
(d) the Loan Parties shall fail to observe or perform any covenant,
condition or agreement contained in Section 2.21, 5.01, 5.02, 5.04 (with respect
to the existence of the Loan Parties), 5.05, 5.07, 5.11 or 5.13 or in Article
VI;
(e) any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in any Loan Document (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Loan Parties (which notice will be given at the request of any
Lender);
(f) any Loan Party shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness
incurred subsequent to the commencement, or otherwise required to be paid during
the pendency, of the Proceedings, when and as the same shall become due and
payable (after giving effect to the expiration of any grace or cure period set
forth therein);
(g) any event or condition occurs that results in any Material Indebtedness
incurred subsequent to the commencement, or otherwise required to be paid during
the pendency, of the Proceedings, becoming due prior to its scheduled maturity
or that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any such Material Indebtedness or any
trustee or agent on its or their behalf to cause any such Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity, provided that this clause
(g) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
permitted in accordance with the terms of this Agreement;
(h) The entry of an order in the Proceedings, which order constitutes the
stay, modification, appeal, or reversal of any Borrowing Order or which
otherwise affects the effectiveness of any Borrowing Order;
(i) The appointment in the Proceedings of a trustee or of any examiner
having expanded powers to operate all or any part of any Loan Party's business;
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(j) The conversion of the Proceedings to a case under Chapter 7 of the
Bankruptcy Code;
(k) The entry of any order which provides relief from the automatic stay
otherwise imposed pursuant to Section 362 of the Bankruptcy Code, which order
permits any creditor, other than the Agents, to realize upon, or to exercise any
right or remedy with respect to, any material asset of any Loan Party or to
terminate any license, franchise, or similar agreement, where the exercise of
such right or remedy or such realization or termination could have a material
adverse effect on the Loan Parties' financial condition or ability to conduct
their business in the ordinary course.
(l) one or more judgments for the payment of money in an aggregate amount
in excess of $1,000,000 shall be rendered against any Loan Party or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
material assets of any Loan Party to enforce any such judgment, but only if and
to the extent that the enforcement of any of the foregoing is not stayed in the
Proceedings;
(m) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Loan Parties in an
aggregate amount exceeding $1,000,000;
(n)
(i) any challenge by or on behalf of any Loan Party to the validity of any
Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document's terms
or which seeks to void, avoid, limit, or otherwise adversely affect
any security interest created by or in any Loan Document or any
payment made pursuant thereto.
(ii) any challenge by or on behalf of any other Person to the validity of
any Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document's terms
or which seeks to void, avoid, limit, or otherwise adversely affect
any security interest created by or in any Loan Document or any
payment made pursuant thereto, in each case, as to which an order or
judgment has been entered adverse to the Agents and the Lenders.
(iii)any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid
and perfected Lien on any Collateral, with the priority required by
the applicable Security Document, except as a result of the sale or
other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents;
(o) a Change in Control shall occur;
(p) the occurrence of any uninsured loss to any material portion of the
Collateral, which could reasonably be expected to have a Material Adverse
Effect;
(q) the indictment of, or institution of any legal process or proceeding
against, any Loan Party, under any federal, state, municipal, and other civil or
criminal statute, rule, regulation, order, or other requirement having the force
of law where the relief, penalties, or remedies sought or available include the
forfeiture of any property of any Loan Party and/or the imposition of any stay
or other order, the effect of which could reasonably be to restrain in any
material way the conduct by the Loan Parties, taken as a whole, of their
business in the ordinary course, and such indictment remains unquashed or such
legal process remains undismissed for a period of 45 days or more;
(r) the determination of the Loan Parties, whether by vote of the Loan
Parties' board of directors or otherwise to: suspend the operation of the Loan
Parties' business in the ordinary course, liquidate all or a material portion of
the Loan Parties' assets or store locations, or employ an agent or other third
party to conduct any so-called store closing, store liquidation or
"Going-Out-Of-Business" sales; or the filing of a motion or other application in
the Proceedings seeking authority to do any of the foregoing;
(s) an application shall be filed by any Loan Party for the approval of any
other super-priority claim in the Proceedings which is pari passu with or senior
to the claims of the Agents and the Lenders against the Loan Parties or there
shall arise any such super-priority claim;
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(t) the Loan Parties shall pay or discharge any pre-petition Indebtedness
except as expressly permitted hereunder;
(u) Any adequate protection is granted by the Loan Parties or is ordered by
the Bankruptcy Court in the Proceedings in favor of any of the Loan Parties'
pre-petition creditors without the consent of the Agents, or any such adequate
protection is modified or expanded without the consent of the Agents; or
(v) any Loan Party (or any other Person in the case of clause (ii)) shall
file a motion in the Proceedings (i) to use cash collateral of the Lenders under
Section 363(c) of the Bankruptcy Code without the Lenders' consent, (ii) to
recover from any portions of the Collateral any costs or expenses of preserving
or disposing of such Collateral under Section 506(c) of the Bankruptcy Code, or
(iii) to take any other action or actions adverse to the Lenders or their rights
and remedies hereunder or under the other Loan Documents or the Lenders'
interest in any Collateral;
then, and in every such event, and at any time thereafter during the continuance
of such event, subject to the terms of the Borrowing Order, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to the
Loan Parties, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Loan Parties accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Loan Parties.
Section 7.2 Tranche B Actionable Events
If any of the following events occurs:
(a) any Event of Default set forth in Sections 7.01(a) or (b) (with respect
to the Tranche B Loans); or
(b) acceleration of the Tranche A Loans; or
(c) any Overadvance other than a Permitted Overadvance shall occur and
shall continue unremedied for more than three consecutive Business Days; or
(d) the breach of the provisions of Section 6.13 hereof, which breach
continues unremedied for more than three consecutive Business Days;
then, and in every such event and at any time thereafter during the continuance
of any such event, subject to the terms of the Borrowing Order, the
Administrative Agent may, and at the request of the Required Tranche B Lenders
shall, by notice to the Loan Parties, take one or more of the following actions,
at the same or different times: (i) provided that either (A) the Tranche A Loans
have been declared due and payable pursuant to Section 7.01 or (B) 10 Business
Days have elapsed since the occurrence of such event, declare the Tranche B
Loans then outstanding to be forthwith due and payable, whereupon the principal
of all outstanding Tranche B Loans together with accrued interest thereon and
any unpaid accrued fees and all other liabilities of the Loan Parties accrued
hereunder and under any other Loan Document shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Loan Parties, anything contained
herein or in any other Loan Document to the contrary notwithstanding; (ii)
provided that either (A) the Tranche A Loans have been declared due and payable
pursuant to Section 7.01 or (B) 10 Business Days have elapsed since the
occurrence of the such event, instruct the Collateral Agent to exercise its
remedies under the Security Documents (including, without limitation,
foreclosure upon and taking possession of the Collateral) and (iii) exercise any
and all other remedies under the Loan Documents and applicable law available to
the Administrative Agent, the Issuing Bank, the Collateral Agent and the
Lenders. In the event that the Tranche A Lenders declare the Tranche A Loans to
be due and payable pursuant to Section 7.01, then the Agents shall thereupon
follow the instructions of the Required Lenders (subject to the provisions of
Sections 8.04(ii) and 9.02 hereof).
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Section 7.3 When Continuing
For all purposes under this Agreement, each Default and Event of Default
that has occurred shall be deemed to be continuing at all times thereafter
unless it either (a) is cured or corrected to the reasonable written
satisfaction of the Lenders in accordance with Section 9.02, or (b) is waived in
writing by the Lenders in accordance with Section 9.02. For all purposes under
this Agreement, each event described in Section 7.02 that has occurred shall be
deemed to be continuing at all times thereafter unless it either (a) is cured or
corrected to the reasonable written satisfaction of the Tranche B Lenders in
accordance with Section 9.02 or (b) is waived in writing by the Tranche B
Lenders in accordance with Section 9.02.
Section 7.4 Remedies on Default
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the maturity of the Loans shall have been
accelerated pursuant hereto, the Administrative Agent may proceed to protect and
enforce its rights and remedies under this Agreement, the Notes or any of the
other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are evidenced, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agents or the Lenders. No remedy
herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
Section 7.5 Application of Proceeds
After the occurrence of an Event of Default and acceleration of the
Obligations, all proceeds realized from any Loan Party or on account of any
Collateral or, without limiting the foregoing, on account of any Prepayment
Event shall be applied in the manner set forth in Section 6.02 of the Security
Agreement. All amounts required to be applied to Tranche A Loans hereunder
(other than Swingline Loans) shall be applied ratably in accordance with each
Tranche A Lender's Tranche A Commitment Percentage, and all amounts required to
be applied to the Tranche B Loans hereunder shall be applied ratably in
accordance with each Tranche B Lender's Tranche B Commitment Percentage. Without
limiting the foregoing, the Tranche B Lenders acknowledge that, except for
proceeds realized from the sale or disposition of Equipment and Seller Notes
Receivable (each as defined in the Security Agreement) and for the reimbursement
of any expenses to which the Tranche B Lenders may be entitled, the Tranche A
Lenders shall be entitled to be repaid in full (including principal, interest,
fees, and the cash collateralization of all Letters of Credit Outstandings)
prior to the delivery of any proceeds to the Tranche B Lenders.
ARTICLE VIII
THE AGENTS
Section 8.1 Administration by Administrative Agent
The general administration of the Loan Documents shall be by the
Administrative Agent. The Lenders, the Collateral Agent and the Issuing Bank
each hereby irrevocably authorizes the Administrative Agent (i) to enter into
the Loan Documents to which it is a party and (ii) at its discretion, to take or
refrain from taking such actions as agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Documents and the Notes as
are delegated by the terms hereof or thereof, as appropriate, together with all
powers reasonably incidental thereto. The Administrative Agent shall have no
duties or responsibilities except as set forth in this Agreement and the
remaining Loan Documents.
Section 8.2 The Collateral Agent
Each Lender, the Administrative Agent and the Issuing Bank hereby
irrevocably (i) designate FRF as Collateral Agent under this Agreement and the
other Loan Documents, (ii) authorize the Collateral Agent to enter into the
Collateral Documents and the other Loan Documents to which it is a party and to
perform its duties and obligations thereunder and (iii) agree and consent to all
of the provisions of the Security Documents. All Collateral shall be held or
administered by the Collateral Agent (or its duly-appointed agent) for its
benefit and for the ratable benefit of the other Secured Parties. Any proceeds
received by the Collateral Agent from the foreclosure, sale, lease or other
disposition of any of the Collateral and any other proceeds received pursuant to
the terms of the Security Documents or the other Loan Documents shall be paid
over to the Administrative Agent for application as provided in Sections 2.18,
2.22, or 7.04, as applicable.
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Section 8.3 Sharing of Excess Payments
Each of the Lenders, the Agents and the Issuing Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Loan Parties or any other Loan Party, including, but not limited 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 and received by such
Lender, any Agent or the Issuing Bank under any applicable bankruptcy,
insolvency or other similar law, or otherwise, obtain payment in respect of the
Obligations owed it (an "excess payment") as a result of which such Lender, such
Agent or the Issuing Bank has received payment of any Loans or other Obligations
outstanding to it in excess of the amount that it would have received if all
payments at any time applied to the Loans and other Obligations had been applied
in the order of priority set forth in Section 2.22, then such Lender, Agent or
the Issuing Bank shall promptly purchase at par (and shall be deemed to have
thereupon purchased) from the other Lenders, such Agent and the Issuing Bank, as
applicable, a participation in the Loans and Obligations outstanding to such
other Persons, in an amount determined by the Administrative Agent in good faith
as the amount necessary to ensure that the economic benefit of such excess
payment is reallocated in such manner as to cause such excess payment and all
other payments at any time applied to the Loans and other Obligations to be
effectively applied in the order of priority set forth in Section 2.22 and,
within Tranche A and Tranche B, to each Lender pro rata in proportion to its
Tranche A Commitment and Tranche B Commitment, respectively; provided, that if
any such excess payment is thereafter recovered or otherwise set aside such
purchase of participations shall be correspondingly rescinded (without
interest). The Loan Parties expressly consent to the foregoing arrangements and
agrees that any Lender, any Agent or the Issuing Bank holding (or deemed to be
holding) a participation in any Loan or other Obligation may exercise any and
all rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by such Loan Party to such Lender, such Agent or the Issuing Bank
as fully as if such Lender, Agent or the Issuing Bank held a Note and was the
original obligee thereon, in the amount of such participation.
Section 8.4 Agreement of Required Lenders
(a) Upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of only the Required Tranche A Lenders,
action shall be taken by the Agents for and on behalf or for the benefit of all
Lenders upon the direction of the Required Tranche A Lenders, and any such
action shall be binding on all Lenders, (ii) upon any occasion requiring or
permitting an approval, consent, waiver, election or other action on the part of
only the Required Tranche B Lenders, action shall be taken by the Agents for and
on behalf or for the benefit of all Lenders upon the direction of the Required
Tranche B Lenders, and any such action shall be binding on all Lenders, (iii)
upon any occasion requiring or permitting an approval, consent, waiver, election
or other action on the part of only the Required Lenders, action shall be taken
by the Agents for and on behalf or for the benefit of all Lenders upon the
direction of the Required Lenders, and any such action shall be binding on all
Lenders, and (iv) upon any occasion requiring or permitting an approval,
consent, waiver, election or other action on the part of the Required Tranche B
Lenders or the Required Supermajority Lenders, action shall be taken by the
Agents for and on behalf or for the benefit of all Lenders upon the direction of
the Required Tranche B Lenders or the Required Supermajority Lenders, as
applicable, and any such action shall be binding on all Lenders. No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 9.02.
(b) Upon the occurrence of an Event of Default, the Agents shall (subject
to the provisions of Section 9.02) take such action with respect thereto as may
be reasonably directed by the Required Lenders or the Required Tranche B Lenders
pursuant to Section 7.02, as applicable; provided that unless and until the
Agents shall have received such directions, the Agents may (but shall not be
obligated to) take such action as it shall deem advisable in the best interests
of the Lenders. In no event shall the Agents be required to comply with any such
directions to the extent that the Agents believe that the Agents' compliance
with such directions would be unlawful or commercially unreasonable.
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Section 8.5 Liability of Agents.
(a) Each of the Agents, when acting on behalf of the Lenders and the
Issuing Bank, may execute any of its respective duties under this Agreement by
or through any of its respective officers, agents and employees, and none of the
Agents nor their respective directors, officers, agents or employees shall be
liable to the Lenders or the Issuing Bank or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or the
Issuing Bank or to any of them for the consequences of any oversight or error of
judgment, or for any loss, except to the extent of any liability imposed by law
by reason of such Agent's own gross negligence or willful misconduct. The Agents
and their respective directors, officers, agents and employees shall in no event
be liable to the Lenders or the Issuing Bank or to any of them for any action
taken or omitted to be taken by them pursuant to instructions received by them
from the Required Lenders, Required Tranche A Lenders, Required Tranche B
Lenders, Required Tranche B Lenders, or Required Supermajority Lenders, as
applicable, or in reliance upon the advice of counsel selected by it. Without
limiting the foregoing, none of the Agents, nor any of their respective
directors, officers, employees, or agents shall be responsible to any Lender or
the Issuing Bank for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty or
representation in, this Agreement, any Loan Document or any related agreement,
document or order, or shall be required to ascertain or to make any inquiry
concerning the performance or observance by any Loan Party of any of the terms,
conditions, covenants, or agreements of this Agreement or any of the Loan
Documents.
(b) None of the Agents nor any of their respective directors, officers,
employees, or agents shall have any responsibility to the Loan Parties on
account of the failure or delay in performance or breach by any Lender (other
than by the Agent in its capacity as a Lender) or the Issuing Bank of any of
their respective obligations under this Agreement or the Notes or any of the
Loan Documents or in connection herewith or therewith.
(c) The Administrative Agent and the Collateral Agent, in such capacities
hereunder, shall be entitled to rely on any communication, instrument, or
document reasonably believed by such person to be genuine or correct and to have
been signed or sent by a person or persons believed by such person to be the
proper Person or Persons, and, such Person shall be entitled to rely on advice
of legal counsel, independent public accountants, and other professional
advisers and experts selected by such Person.
Section 8.6 Reimbursement and Indemnification
Each Lender agrees (i) to reimburse (x) each Agent for such Lender's
Commitment Percentage of any expenses and fees incurred by such Agent for the
benefit of the Lenders or the Issuing Bank under this Agreement, the Notes and
any of the Loan Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders or the Issuing Bank, and any other expense incurred in connection with
the operations or enforcement thereof not reimbursed by the Loan Parties and (y)
each Agent for such Lender's Commitment Percentage of any expenses of such Agent
incurred for the benefit of the Lenders or the Issuing Bank that the Loan
Parties have agreed to reimburse pursuant to Section 9.03 and has failed to so
reimburse and (ii) to indemnify and hold harmless the Agents and any of their
directors, officers, employees, or agents, on demand, in the amount of such
Lender's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in any way relating to or
arising out of this Agreement, the Notes or any of the Loan Documents or any
action taken or omitted by it or any of them under this Agreement, the Notes or
any of the Loan Documents to the extent not reimbursed by the Loan Parties
(except such as shall result from their respective gross negligence or willful
misconduct).
Section 8.7 Rights of Agents
It is understood and agreed that FRF shall have the same rights and powers
hereunder (including the right to give such instructions) as the other Lenders
and may exercise such rights and powers, as well as its rights and powers under
other agreements and instruments to which it is or may be party, and engage in
other transactions with the Loan Parties, as though it were not the
Administrative Agent or the Collateral Agent, respectively, of the Lenders under
this Agreement.
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Section 8.8 Independent Lenders and Issuing Bank
The Lenders and the Issuing Bank each acknowledge that they have decided to
enter into this Agreement and to make the Loans or issue the Letters of Credit
hereunder based on their own analysis of the transactions contemplated hereby
and of the creditworthiness of the Loan Parties and agrees that the Agents shall
bear no responsibility therefor.
Section 8.9 Notice of Transfer
The Agents may deem and treat a Lender party to this Agreement as the owner
of such Lender's portion of the Loans for all purposes, unless and until, and
except to the extent, an Assignment and Acceptance shall have become effective
as set forth in Section 9.04(b).
Section 8.10 Successor Agent
Any Agent may resign at any time by giving five (5) Business Days' written
notice thereof to the Lenders, the Issuing Bank, the other Agents and the Loan
Parties. Upon any such resignation of any Agent, the Required Lenders shall have
the right to appoint a successor Agent, which so long as there is no Default, or
Event of Default, shall be reasonably satisfactory to the Loan Parties. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders, the
other Agents and the Issuing Bank, appoint a successor Agent which shall be (i)
a commercial bank (or affiliate thereof) organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, (ii) or a Lender capable of complying with all
of the duties of such Agent (and the Issuing Bank), hereunder (in the opinion of
the retiring Agent and as certified to the Lenders in writing by such successor
Agent) which, in the case of (i) and (ii) above, so long as there is no Default,
or Event of Default, shall be reasonably satisfactory to the Loan Parties. Upon
the acceptance of any appointment as Agent by a successor Agent, 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 under this Agreement. After any
retiring Agent's resignation hereunder as such Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was such Agent under this Agreement.
Section 8.11 Reports and Financial Statements
Promptly after receipt thereof from the Loan Parties, the Administrative
Agent shall remit to each Lender and the Collateral Agent copies of all
financial statements required to be delivered by the Loan Parties hereunder and
all commercial finance examinations and appraisals of the Collateral received by
the Administrative Agent.
Section 8.12 Syndication Agent and Arranger
Notwithstanding the provision of this Agreement or any of the other Loan
Documents, the Syndication Agent and the Arranger (except as provided in the
commitment letter for this transaction) shall have no powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices
Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to it at ▇▇▇▇▇▇-▇▇▇▇▇▇ Company, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇) with a copy to Willkie, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) Attention of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esquire and to McGuireWoods, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire;
(b) if to the Administrative Agent or the Collateral Agent, or the
Swingline Lender to Fleet Retail Finance Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
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(c) if to any other Lender, to it at its address (or telecopy number) set
forth on the signature pages hereto or on any Assignment and Acceptance for such
Lender.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
Section 9.2 Waivers; Amendments
(a) No failure or delay by the Administrative Agent, the Issuing Bank or
any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agents, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Agents, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Loan Parties and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Agents and the Loan Party or Loan Parties that are parties thereto, in each case
with the consent of the Required Lenders, provided that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or L/C Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or L/C
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of the Commitment or the Maturity Date, without the written
consent of each Lender affected thereby, (iv) change Sections 2.15, 2.18, 2.21,
or 2.22 or Section 6.02 of the Security Agreement, without the written consent
of each Lender, (v) change any of the provisions of this Section or the
definition of the term "Required Lenders", "Required Tranche A Lenders",
"Required Tranche B Lenders", or "Required Supermajority Lenders" or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender, (vi) release any Loan Party from its obligations under any Loan
Document, or limit its liability in respect of such Loan Document, without the
written consent of each Lender, (vii) except for sales described in Section 6.05
(as amended from time to time in accordance with Section 9.02(c)), release any
portion of the Collateral from the Liens of the Security Documents, without the
written consent of each Lender, (viii) change the definition of the term
"Borrowing Base" or any component thereof, without the written consent of each
Lender, (ix) increase the Permitted Overadvance, without the written consent of
each Lender, (x) subordinate the Obligations hereunder, or the Liens granted
hereunder or under the other Loan Documents, to any other Indebtedness or Lien,
as the case may be without the prior written consent of each Lender, and
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agents or the Issuing Bank without the prior written
consent of the Agents or the Issuing Bank, as the case may be.
(c) No such modification, amendment or waiver shall without the written
consent of the Required Tranche B Lenders (i) accelerate the principal or
interest payment, or maturity, dates of the Tranche A Loans (other than in
connection with an acceleration of the Loans in connection with an Event of
Default), or (ii) waive any event described in Section 7.02 hereof or amend any
provision of Article VII or (iii) create any additional Event of Default which
is not also an event subject to the provisions of Section 7.02 hereof, or (iv)
modify the provisions of Section 6.05(c), (d), or (e) hereof, and (v) modify the
provisions of Section 6.13 hereof. Further, notwithstanding anything to the
contrary contained in this Agreement, the Collateral Agent may not release any
portion of the Equipment or Seller Notes Receivable from the Liens of the
Security Documents or permit any sale thereof without the consent of the
Required Tranche B Lenders.
106
(d) Notwithstanding anything to the contrary contained in this Section
9.02, in the event that the Loan Parties request that this Agreement or any
other Loan Document be modified, amended or waived in a manner which would
require the consent of the Lenders pursuant to Sections 9.02(b) or 9.02(c) and
such amendment is approved by the Required Tranche A Lenders and the Required
Tranche B Lenders, but not by the requisite percentage of the Lenders, the Loan
Parties, the Required Tranche A Lenders and the Required Tranche B Lenders shall
be permitted to amend this Agreement without the consent of the Lender or
Lenders which did not agree to the modification or amendment requested by the
Loan Parties (such Lender or Lenders, collectively the "Minority Lenders") to
provide for (w) the termination of the Commitment of each of the Minority
Lenders, (x) the addition to this Agreement of one or more other financial
institutions, or an increase in the Commitment of one or more of the Required
Tranche A Lenders or Required Tranche B Lenders, so that the aggregate Tranche A
Commitments and the aggregate Tranche B Commitments after giving effect to such
amendment shall be in the same amount as the aggregate Tranche A Commitments and
the aggregate Tranche B Commitments, respectively, immediately before giving
effect to such amendment, (y) if any Loans are outstanding at the time of such
amendment, the making of such additional Loans by such new or increasing Lender
or Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans (including principal, interest, and fees) of the Minority
Lenders immediately before giving effect to such amendment and (z) such other
modifications to this Agreement or the Loan Documents as may be appropriate and
incidental to the foregoing.
(e) No notice to or demand on any Loan Party shall entitle any Loan Party
to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked. No
amendment to this Agreement shall be effective against the Loan Parties unless
signed by the Loan Parties.
Section 9.3 Expenses; Indemnity; Damage Waiver
(a) The Loan Parties shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Agents and their Affiliates, including
the reasonable and documented fees, charges and disbursements of counsel for the
Agents, outside consultants for the Agents and internally allocated charges with
respect to the Administrative Agent's collateral examination group, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all reasonable and
documented out-of-pocket expenses incurred by the Agents, the Issuing Bank or
any Lender, including the reasonable and documented fees, charges and
disbursements of any counsel and any outside consultants for the Agents, the
Issuing Bank or any Lender and the internally allocated charges with respect to
the Administrative Agent's collateral examination group, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit; provided that the Lenders who are not the Agents or
the Issuing Bank shall be entitled to reimbursement for no more than one counsel
representing all such Lenders (absent a conflict of interest in which case the
Lenders may engage and be reimbursed for additional counsel).
107
(b) The Loan Parties shall, jointly and severally, indemnify the Agents,
the Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable and documented fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the transactions
contemplated by the Loan Documents or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by any Loan Party or any of the
Subsidiaries, or any Environmental Liability related in any way to any Loan
Party or any of the Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnitee or any Affiliate of such Indemnitee (or of any
officer, director, employee, advisor or agent of such Indemnitee or any such
Indemnitee's Affiliates).
(c) To the extent that any Loan Party fails to pay any amount required to
be paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Agents or the Issuing
Bank, as the case may be, such Lender's pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agents or the Issuing Bank. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the Total
Commitments at the time.
(d) To the extent permitted by applicable law, no Loan Party shall assert,
and each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated by the Loan Documents, any Loan or Letter of Credit or
the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
Section 9.4 Successors and Assigns
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that no Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any such attempted assignment or transfer without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Agents, the Issuing Bank
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
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(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it), provided that (i) except in
the case of an assignment to a Lender or an Affiliate of a Lender, each of
▇▇▇▇▇▇-▇▇▇▇▇▇ (but only if no Default then exists), the Agents and the Issuing
Bank must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed), (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $10,000,000 unless the Administrative Agent otherwise consents, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under Tranche A or Tranche B, as
applicable, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, and, after completion of the
syndication of the Loans, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof pursuant to paragraph (d) of
this Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 9.03).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Loan Parties, shall maintain at one of its offices in Boston, Massachusetts a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, absent manifest error, and the Loan Parties,
the Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Loan Parties,
the Issuing Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without the consent of the Loan Parties, the Agents,
and the Issuing Bank, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it), provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the Loan
Parties, the Agents, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation in the Tranche A
Commitments, the Tranche A Loans and the Letters of Credit Outstandings shall
provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents, provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. The limitations in the preceding sentence
shall not apply to any participation of the Tranche B Commitments or Tranche B
Loans and the Tranche B Lenders may sell participations in the Tranche B Loans
without complying with the provisions of the preceding sentence. Subject to
paragraph (f) of this Section, the Loan Parties agree that each Participant
shall be entitled to the benefits of Sections 2.23, 2.25 and 2.26 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.25(c)
as though it were a Lender.
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(f) A Participant shall not be entitled to receive any greater payment
under Section 2.23 or 2.26 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Loan Parties'
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.26 unless (i) the Loan
Parties are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Loan Parties, to comply with Section
2.26(f) as though it were a Lender and (ii) such Participant is eligible for
exemption from the withholding tax referred to therein, following compliance
with Section 2.26(f).
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest, provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
Section 9.5 Survival
All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agents, the Issuing Bank or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.23, 2.26 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
Section 9.6 Counterparts; Integration; Effectiveness
This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Agents or the Tranche B Lenders constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when the Interim Borrowing Order has been
entered by the Bankruptcy Court in the Proceedings, and when it shall have been
executed by the Agents and the Lenders and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.7 Severability
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
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Section 9.8 Right of Setoff
If an Event of Default shall have occurred and be continuing, subject to
the terms of the Borrowing Order, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Loan Parties against any of and all the obligations of the Loan Parties
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender may have.
Section 9.9 Governing Law; Jurisdiction; Consent to Service of Process
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS AND THE PROVISIONS OF THE
BANKRUPTCY CODE.
(b) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Section 9.10 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.11 Headings
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
Section 9.12 Confidentiality
Each of the Agents, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement and any actual or
prospective counterparty or advisors to any swap or derivative transactions
relating to the Loan Parties and the Obligations, (g) with the consent of the
Loan Parties or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Agents, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Loan Parties. For the purposes of this
Section, the term "Information" means all information received from the Loan
Parties relating to their business, other than any such information that is
available to the Agents, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Loan Parties, provided that, in the case of
information received from the Loan Parties after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
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Section 9.13 Interest Rate Limitation
Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to any Loan, together with all fees, charges and other
amounts that are treated as interest on such Loan under applicable law
(collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum
Rate") that may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
Section 9.14 Additional Waivers
(a) The Obligations are the joint and several obligations of each Loan
Party. To the fullest extent permitted by applicable law, the obligations of
each Loan Party hereunder shall not be affected by (i) the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce or
exercise any right or remedy against any other Loan Party under the provisions
of this Agreement, any other Loan Document or otherwise, (ii) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, this Agreement, any other Loan Document, or any other agreement,
including with respect to any other Loan Party of the Obligations under this
Agreement, or (iii) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Collateral Agent or
any other Secured Party.
(b) The obligations of each Loan Party hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Agreement, any other Loan Document or any other agreement, by
any waiver or modification of any provision of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Obligations, or
by any other act or omission that may or might in any manner or to any extent
vary the risk of any Loan Party or that would otherwise operate as a discharge
of any Loan Party as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Obligations).
(c) To the fullest extent permitted by applicable law, each Loan Party
waives any defense based on or arising out of any defense of any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Loan Party,
other than the indefeasible payment in full in cash of all the Obligations. The
Collateral Agent and the other Secured Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Loan Party hereunder except to the extent that
all the Obligations have been indefeasibly paid in full in cash. Pursuant to
applicable law, each Loan Party waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Loan Party against any other Loan Party, as the case may be,
or any security.
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(d) Upon payment by any Loan Party of any Obligations, all rights of such
Loan Party against any other Loan Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations, as more
particularly set forth in an Indemnity, Subrogation and Contribution Agreement
to be entered into amongst the Loan Parties. In addition, any indebtedness of
any Loan Party now or hereafter held by any other Loan Party is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. None of the Loan Parties will demand, ▇▇▇ for, or otherwise attempt
to collect any such indebtedness. If any amount shall erroneously be paid to any
Loan Party on account of (a) such subrogation, contribution, reimbursement,
indemnity or similar right or (b) any such indebtedness of any Loan Party, such
amount shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Collateral Agent to be credited against the payment of
the Obligations, whether matured or unmatured, in accordance with the terms of
the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
SUBSIDIARY LOAN PARTIES
▇▇▇▇▇▇-▇▇▇▇▇▇ FURNITURE COMPANY
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇-▇▇▇▇▇▇ FURNITURE WEST, INC.
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
HMY ROOMSTORE, INC.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
HMY STAR, INC.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
MACSAVER FINANCIAL SERVICES, INC.
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
113
FLEET RETAIL FINANCE INC.,
as Administrative Agent, as
Collateral Agent, as Swingline
Lender, and as Lender
By /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BACK BAY CAPITAL FUNDING, LLC,
as Tranche B Administrative
Agent and Lender
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET NATIONAL BANK,
as Issuing Bank
By /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP USA, INC., as Lender and
Syndication Agent
By /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
114