CREDIT AGREEMENT Dated as of October 24, 2006 among THE BOMBAY COMPANY, INC. EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO, as Borrowers THE LENDERS AND L/C ISSUERS PARTY HERETO, GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent and...
$125,000,000
Dated
as
of October 24, 2006
among
THE
BOMBAY COMPANY, INC.
EACH
OF
ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO,
as
Borrowers
THE
LENDERS AND L/C ISSUERS PARTY HERETO,
GENERAL
ELECTRIC CAPITAL CORPORATION,
as
Administrative Agent and Collateral Agent
and
GE
CANADA
FINANCE HOLDING COMPANY,
as
Canadian Agent
♦
♦
♦
GE
CAPITAL MARKETS, INC.,
as
Sole
Lead Arranger and Bookrunner
SCHEDULES
Schedule I - Commitments
Schedule
4.7 -
Subsidiaries
Schedule 4.9 - Litigation
Schedule 4.14 - Environmental
Condition
Schedule 4.20 - Credit
Card Receipts
Schedule 5.2 - Collateral
Reporting
Schedule
7.1 - Existing
Indebtedness
Schedule
7.2 - Existing
Liens
Schedule 7.12 - Affiliates
Schedule 7.16 - Store
Openings and Closings
EXHIBITS
Exhibit A - Form
of
Assignment
Exhibit B - Form
of
Note
Exhibit C - Form
of
Notice of Borrowing
Exhibit D - Form
of
Swingline Request
Exhibit E - Form
of
L/C Request
Exhibit F - Form
of
Notice of Conversion or Continuation
Exhibit G - Form
of
Compliance Certificate
Exhibit H - Form
of
Guaranty and Security Agreement
Exhibit I - Borrowing
Base Certificate
This
CREDIT
AGREEMENT,
dated
as of October 24, 2006, is entered into among THE
BOMBAY COMPANY, INC.,
a
Delaware corporation (the “Parent”),
each
of Parent’s Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually, as a “Borrower”,
and
collectively, as the “Borrowers”),
the
Lenders (as defined below), the L/C Issuers (as defined below), GENERAL
ELECTRIC CAPITAL CORPORATION
(“GE
Capital”),
as
administrative agent and collateral agent for the Lenders and the L/C Issuers
(in such capacity, and together with its successors and permitted
assigns, the
“Administrative
Agent”)
and GE
CANADA FINANCE HOLDING COMPANY (“GE
Canada”),
as
Canadian agent (in such capacity, the “Canadian
Agent”).
The
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS,
INTERPRETATION AND ACCOUNTING TERMS
Section 1.1 Defined
Terms.
As used
in this Agreement, the following terms have the following meanings:
“Accounts”
means
an “account” (as defined under the UCC) and any and all supporting obligations
in respect thereof.
“Account
Debtor”
means
any Person who is or who may become obligated under, with respect to, or on
account of, an Account.
“Adjusted
Availability”
means
as of any date of determination, if such date is a Business Day, and determined
at the close of business on the immediately preceding Business Day, if such
date
of determination is not a Business Day, the amount as determined by the
Administrative Agent at any time, in its Permitted Discretion, equal to the
remainder of (a) the Aggregate Borrowing Base minus
(b) the
sum of the U.S. Revolving Credit Outstandings and the Canadian Revolving Credit
Outstandings (in each case, determined after giving effect to all sublimits
and
Reserves then applicable hereunder).
“Administrative
Agent”
means
GE Capital, solely in its capacity at the administrative agent and collateral
agent for the Lenders and the L/C Issuers.
“Affected
Lender”
has
the
meaning specified in Section 2.18(b).
“Affiliate”
means,
as applied to any Person, any other Person who, directly or indirectly,
controls, is controlled by, or is under common control with, such Person;
provided,
however,
no
Secured Party shall be deemed an Affiliate of the Group Members. For purposes
of
this definition, “control” means the possession, directly or indirectly, of the
power to direct the management and policies of a Person, whether through the
ownership of Stock, by contract, or otherwise; provided,
however,
that,
for purposes of Section
7.12
hereof:
(a) any Person which owns directly or indirectly 20% or more of the Voting
Stock
of a Person or 20% or more of the partnership or other ownership interests
of a
Person (other than as a limited partner of such Person) shall be deemed to
control such Person; and (b) each director (or comparable manager) of a Person
shall be deemed to be an Affiliate of such Person.
1
“Agent”
means
the Administrative Agent and the Canadian Agent or, as the context requires,
either of them.
“Aggregate
Borrowing Base”
means
as of any date of determination, an amount equal to the U.S. Borrowing Base
plus
the
Canadian Borrowing Base.
“Agreement”
means
this Credit Agreement.
“Applicable
Margin” means,
with respect to Revolving Loans, Swing Loans, Canadian Swing Loans and the
Unused Commitment Fee, a percentage equal to (a) during the period commencing
on
the Closing Date and ending 5 Business Days after the receipt by the
Administrative Agent of the Compliance Certificate for the Fiscal Year ending
January, 2007 required to be delivered pursuant to Section
5.3,
with
respect to (i) Loans, Swing Loans and Canadian Swing Loans maintained as Base
Rate Loans a rate equal to 0.0% per annum and (ii) Loans maintained as
Eurodollar Rate Loans, a rate equal to 1.25% per annum and (b) thereafter,
as of
each date of determination (and until the next such date of determination),
a
per annum percentage equal to the per annum percentage set forth below in the
applicable column opposite the level corresponding to the average Adjusted
Availability for the most recently ended Fiscal Quarter:
|
LEVEL
|
AVERAGE
ADJUSTED AVAILABILITY
|
BASE
RATE LOANS
|
EURODOLLAR
RATE LOANS
|
UNUSED
COMMITMENT FEE
|
|
REVOLVING
LOANS, SWING LOANS AND CANADIAN SWING LOANS
|
REVOLVING
LOANS
|
|||
|
I
|
Greater
than $50,000,000
|
0%
|
1.00%
|
0.20%
|
|
II
|
Less
than or equal to $50,000,000 and or greater than $35,000,000
|
0%
|
1.25%
|
0.20%
|
|
III
|
Less
than or equal to $35,000,000 and or greater than $25,000,000
|
0%
|
1.50%
|
0.20%
|
|
IV
|
Less
than or equal to $25,000,000
|
0%
|
1.75%
|
0.20%
|
Each
date
of determination for the “Applicable
Margin”
shall
be the date that is 5 Business Days after delivery by the Borrower to the
Administrative Agent of a new Compliance Certificate with respect to each Fiscal
Quarter pursuant to Section 5.3.
Notwithstanding anything to the contrary set forth in this Agreement, the
Applicable Margin shall equal the percentage set forth in the appropriate column
opposite Level IV in the table above, effective immediately upon failure to
deliver a Compliance Certificate pursuant to Section
5.3
until
the date immediately following the date on which the Compliance Certificate
is
delivered.
“Appraised
Value”
means
the fair market value as determined by an appraisal report conforming to the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
in form and substance and from independent appraisers satisfactory to the
Administrative Agent in its Permitted Discretion.
“Approved
Customs Broker”
means
a
customs broker selected by the Borrowers acceptable to the Administrative Agent
in its Permitted Discretion (and which may be affiliated with one of the
Lenders, the Administrative Agent or the Canadian Agent) to perform port of
entry services, to accept and process inventory imported by a U.S. Borrower
and
who has executed and delivered a customs broker agreement in form and substance
satisfactory to the Administrative Agent in its Permitted Discretion, duly
executed and delivered to the Administrative Agent by a Customs Broker and
the
applicable Borrower.
2
“Approved
Fund”
means,
with respect to any Lender, any Person (other than a natural Person) that (a)
is
or will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its
business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate
of
such Lender or (iii) any Person (other than an individual) or any Affiliate
of
any Person (other than an individual) that administers or manages such
Lender.
“Approved
Inventory Servicer”
means
RGIS Inventory Specialists, Western Inventory Service, Washington Inventory
Service and any other third parties acceptable to the Administrative Agent
in
its Permitted Discretion (and which may be affiliated with one of the Lenders).
“Assignment”
means
an assignment agreement entered into by a Lender, as assignor, and any
prospective assignee thereof and accepted by the Administrative Agent, in
substantially the form of Exhibit A.
“Availability”
means,
as of any date of determination, if such date is a Business Day, and determined
at the close of business on the immediately preceding Business Day, if such
date
of determination is not a Business Day, the amount as determined by the
Administrative Agent at any time, in its Permitted Discretion equal to (a)
the
lesser of (i) the sum of the Maximum Revolver Amount and the Maximum Canadian
Revolver Amount and (ii) the Aggregate Borrowing Base, minus
(b)
the
sum of the U.S. Revolving Credit Outstandings and the Canadian Revolving Credit
Outstandings (in each case, determined after giving effect to all sublimits
and
Reserves then applicable hereunder).
“Bailee
Acknowledgment”
means
a
record in form and substance satisfactory to the Administrative Agent
authenticated by any bailee, warehouseman or other third party in possession
of
any inventory acknowledging that it holds possession of the applicable inventory
for the benefit of the Administrative Agent, on behalf of the Secured
Parties.
“Bankruptcy
Code”
means
title 11 of the United States Bankruptcy Code, as in effect from time to
time.
“Base
Rate”
means,
at any time, a rate per annum equal to the higher of (a) the rate last quoted
by
The Wall Street Journal as the “base rate on corporate loans posted by at least
75% of the nation’s largest banks” in the United States or, if The Wall Street
Journal ceases to quote such rate, the highest per annum interest rate published
by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519)
(Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no
longer quoted therein, any similar rate quoted therein (as determined by the
Administrative Agent) or any similar release by the Federal Reserve Board (as
determined by the Administrative Agent) and (b) the sum of 0.5% per annum and
the Federal Funds Rate.
“Base
Rate Loan”
means
any Loan that bears interest based on the Base Rate.
“Benefit
Plan”
means
a
“defined benefit plan” (as defined in Section 3(35) of ERISA) subject to
Title IV of ERISA for which any Borrower or any Subsidiary or ERISA Affiliate
of
any Borrower has been an “employer” (as defined in Section 3(5) of ERISA)
within the past six years.
3
“Bombay
Canada”
means
The Bombay Furniture Company of Canada Inc., a corporation continued under
the
laws of the Province of Ontario.
“Bombay
Office Complex”
Real
Property located in Tarrant County, Texas with the legal description known
as
▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ Addition to the City of Fort Worth, Tarrant County,
Texas, according to plat recorded in Cabinet A, Page 10625, Plat Records of
Tarrant County Texas, the office buildings and improvements thereon, the
fixtures thereon and the related equipment.
“Books”
means
all of each Group Member’s now owned or hereafter acquired books and records
(including all of its Records indicating, summarizing, or evidencing its assets
(including the Collateral) or liabilities, all of each Group Member’s Records
relating to its or their business operations or financial condition, and all
of
each Group Member’s goods or general intangibles related to such
information).
“Borrower”
has
the
meaning specified in the preamble.
“Borrowing”
means
a
borrowing consisting of Loans (other than Swing Loans and Loans deemed made
pursuant to Section 2.3
or
2.4)
made in
one Facility on the same day by the Lenders according to their respective
Commitments under such Facility.
“Borrowing
Base”
means
as the context may require, the U.S. Borrowing Base, and/or the Canadian
Borrowing Base.
“Borrowing
Base Certificate”
means
a
certificate in the form of Exhibit
I,
with
respect to the Aggregate Borrowing Base and as such form may be revised from
time to time by the Administrative Agent.
“Business
Day”
means
any day of the year that is not a Saturday, Sunday or a day on which banks
are
required or authorized to close in New York City, New York, the State of Texas
or, in respect of any Canadian Revolving Loan or Canadian Swing Loan, Toronto,
Canada, and, when determined in connection with notices and determinations
in
respect of any Eurodollar Rate or Eurodollar Rate Loan or any funding,
conversion, continuation, Interest Period or payment of any Eurodollar Rate
Loan, that is also a day on which dealings in Dollar deposits are carried on
in
the London interbank market.
“Canadian
Agent”
means
GE Canada, solely in its capacity as agent for the Canadian Lenders hereunder
and any other holders of Obligations related to the Canadian Revolving Loans
and
the Canadian Swing Loans and any successor thereto.
“Canadian
Benefit Plans”
means
any plan, fund, program, or policy, whether oral or written, formal or informal,
funded or unfunded, insured or uninsured, providing employee benefits, including
medical, hospital care, dental, sickness, accident, disability, life insurance,
pension, retirement or savings benefits, under which Bombay Canada has any
liability with respect to any employee or former employee, but excluding any
Canadian Pension Plans.
4
“Canadian
Borrowing Base”
means,
with respect to Bombay Canada, as of any date of determination, an amount equal
to:
(a) 92.5%
of
the Net Retail Liquidation Value of Eligible Inventory owned by Bombay Canada;
provided,
however,
that
during the Seasonal Period, the advance rate shall be of 97.5% of the Net
Retail Liquidation Value of Eligible Inventory owned by Bombay Canada,
plus,
(b) 90.0%
of
the face amount of Eligible Accounts of Bombay Canada, plus,
(c) 90.0%
of
the face amount of Eligible Credit Card Receivables of Bombay Canada,
minus,
(d) the
aggregate of such Reserves as may have been established by the Administrative
Agent.
“Canadian
Eligible In-Transit Inventory”
means
inventory of Bombay Canada that does not qualify as Eligible Inventory under
clause
(b)
of the
definition of Eligible Inventory solely because it is not at a location in
Canada set forth on Schedule
4(b)
of the
Perfection Certificate or in transit among such locations in Canada and that
meets the following criteria, which criteria may be revised by the
Administrative Agent in its Permitted Discretion from time to time after the
Closing Date:
(a) the
inventory was the subject of a Qualified Import Letter of Credit, or was paid
for in full by Bombay Canada;
(b) such
inventory currently is in transit (whether by vessel, air, or land) to a
location set forth on Schedule
4(b)
of the
Perfection Certificate in Canada that is the subject of a Bailee Acknowledgment
or a Collateral Access Agreement;
(c) title
to
such inventory has passed to Bombay Canada;
(d) such
inventory is insured against types of loss, damage, hazards, and risks, and
in
amounts, satisfactory to the Administrative Agent in its Permitted
Discretion;
(e) Bombay
Canada has provided a certificate to the Canadian Agent that certifies that,
to
the best knowledge of Bombay Canada, such inventory meets all of Bombay Canada’s
representations and warranties contained in the Loan Documents concerning
Eligible Inventory, that Bombay Canada know of no reason why such inventory
would not be accepted by Bombay Canada when it arrives in Canada, and that
the
shipment as evidenced by the documents conforms to the related order documents;
and
(f) if
subject to a Qualified Import Letter of Credit, the Underlying Letter of Credit
has been drawn upon and the Underlying Issuer has honored such drawing and
the
Administrative Agent has honored its obligations to the Underlying Issuer under
the applicable Qualified Import Letter of Credit.
“Canadian
Lender”
means
each Lender which (a) is incorporated and operating under the laws of Canada
or
a province thereof or which is an authorized foreign bank within the meaning
of
Part I, section 2 of the Bank Act (Canada) and amounts paid or credited to
or by
it under this Agreement and the other Loan Documents are in respect of its
Canadian banking business, and (b) has a Canadian Revolving Credit Commitment
holds Canadian Revolving Loans or participates in any Canadian Swing
Loan.
5
“Canadian
Non-Funding Lender”
has
the
meaning specified in Section
2.2B(c).
“Canadian
Pension Plans”
means
each pension plan required to be registered under Canadian federal or provincial
law that is maintained or contributed to by Bombay Canada for its employees
or
former employees, but does not include the Canada Pension Plan or the Quebec
Pension Plan as maintained by the Government of Canada or the Province of
Quebec, respectively.
“Canadian
Priority Payables”
means,
at any time with respect to Bombay Canada:
(a) the
amount past due and owing by Bombay Canada, or the accrued amount for which
Bombay Canada has an obligation to remit to a Governmental Authority or other
Person pursuant to any applicable law, rule or regulation, in respect of (i)
pension fund obligations; (ii) unemployment insurance; (iii) goods and services
taxes, sales taxes, employee income taxes and other taxes payable or to be
remitted or withheld; (iv) workers’ compensation; (v) vacation pay; and (vi)
other like charges and demands; in each case, in respect of which any
Governmental Authority or other Person may claim a security interest, lien,
trust or other claim ranking or capable of ranking prior to or pari passu with
one or more of the Liens granted in the Loan Documents; and
(b) the
amount equal to the percentage applicable to inventory in the calculation of
the
Canadian Borrowing Base multiplied by the aggregate value of the Eligible
Inventory which the Administrative Agent, in good faith, considers is or may
be
subject to a right of a supplier to repossess goods pursuant to Section 81.1
of
the Bankruptcy and Insolvency Act (Canada) or any applicable laws granting
revendication or similar rights to unpaid suppliers or any similar laws of
Canada or any other applicable jurisdiction, in each case, where such supplier’s
right ranks or is capable of ranking prior to or pari passu with one or more
of
the Liens granted in the Loan Documents.
“Canadian
Revolving Credit Commitment”
means,
with respect to each Canadian Lender, the commitment of such Canadian Lender
to
make Canadian Revolving Loans and acquire interests in other Canadian Revolving
Credit Outstandings, which commitment is in the amount set forth opposite such
Canadian Lender’s name on Schedule I
under
the caption “Canadian
Revolving Credit Commitment”,
as
amended to reflect Assignments and as such amount may be reduced pursuant to
this Agreement. The aggregate amount of the Canadian Revolving Credit
Commitments on the date hereof equals $18,000,000.
“Canadian
Revolving Credit Facility”
means
the Canadian Revolving Credit Commitments and the provisions herein related
to
the Canadian Revolving Loans and Canadian Swing Loans.
“Canadian
Revolving Credit Outstandings”
means,
at any time, the sum of, in each case to the extent outstanding at such time,
the aggregate principal amount of the Canadian Revolving Loans and Canadian
Swing Loans.
“Canadian
Revolving Loan”
has
the
meaning specified in Section 2.1B.
6
“Canadian
Security Documents”
means
each of the various Canadian security agreements by and among Bombay Canada
and
the Canadian Agent, and any and all acknowledgments of security, or similar
agreements made in favor of the Canadian Agent by Bombay Canada, and any
agreement delivered on or after the Closing Date (including by way of supplement
to the foregoing) by any Person granting a Lien on the assets of such Person
to
secure all or any part of the Obligations of, or any bond issued by, Bombay
Canada to the Canadian Agent, including, without limitation, any security
granted by Bombay Canada pursuant to the laws of the Province of Quebec, in
each
case as amended, supplemented or modified from time to time in accordance with
its terms.
“Canadian
Swing Loan”
has
the
meaning specified in Section
2.3B(a).
“Canadian
Swingline Commitment”
means
$2,000,000.
“Canadian
Swingline Lender”
means,
each in its capacity as Canadian Swingline Lender hereunder, GE
Canada or,
upon
the resignation of GE Canada as Canadian Agent hereunder, any Canadian Lender
(or Affiliate or Approved Fund of any Canadian Lender) that agrees, with the
approval of the Canadian Agent (or, if there is no such successor Canadian
Agent, the Required Lenders) and the Parent, to act as the Canadian Swingline
Lender hereunder.
“Capital
Lease”
means,
with respect to any Person, any lease of, or other arrangement conveying the
right to use, any property (whether real, personal or mixed) by such Person
as
lessee that has been or should be accounted for as a capital lease on a balance
sheet of such Person prepared in accordance with GAAP.
“Cash
Collateral Account”
means
a
deposit account or securities account in the name of the Borrowers and under
the
sole control (as defined in the applicable UCC) of the Administrative Agent
and
(a) in the case of a deposit account, from which the Borrower may not make
withdrawals except as permitted by the Administrative Agent and (b) in the
case
of a securities account, with respect to which the Administrative Agent shall
be
the entitlement holder and the only Person authorized to give entitlement orders
with respect thereto.
“Cash
Dominion Event”
means
(a) the occurrence and continuance of any Event of Default, or (b) the period
commencing with each failure by the Borrowers to maintain Adjusted Availability
in an amount of less than (i) ten percent (10%) of the Aggregate Borrowing
Base
for a period of 5 consecutive Business Days or (ii) five percent (5%) of the
Aggregate Borrowing Base at any time and, in each case, ending with the
occurrence of a Cash Dominion Reversion; provided,
however
that (y)
no more than 2 Cash Dominion Reversions may occur in any 12 month period and
(z)
if an additional Cash Dominion Event occurs during such 12 month period, no
further Cash Dominion Reversions may occur through and including the Scheduled
Maturity Date.
“Cash
Dominion Reversion”
means
that the Borrowers shall have maintained Adjusted Availability in an amount
of
not less than fifteen percent (15%) of the Aggregate Borrowing Base for a period
of 30 consecutive Business Days as evidenced by a Compliance Certificate
delivered to the Administrative Agent; provided,
however
that (a)
no more than 2 Cash Dominion Reversions may occur in any 12 month period and
(b)
if an additional Cash Dominion Event occurs during such 12 month period, no
further Cash Dominion Reversions may occur through and including the Scheduled
Maturity Date.
7
“Cash
Equivalents”
means
(a) marketable direct obligations issued or unconditionally guaranteed by the
United States or issued by any agency thereof and backed by the full faith
and
credit of the United States, in each case maturing within 1 year from the date
of acquisition thereof, (b) marketable direct obligations issued by any state
of
the United States or any political subdivision of any such state or any public
instrumentality thereof maturing within 1 year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P or ▇▇▇▇▇’▇, (c) commercial paper maturing no more than 270
days from the date of acquisition thereof and, at the time of acquisition,
having a rating of A-2 or P-2, or better, from S&P or ▇▇▇▇▇’▇, (d)
commercial notes and bonds, or variable rate demand notes issued by any
commercial institution with a rating of not less than A, as determined by
S&P or ▇▇▇▇▇’▇, (e) certificates of deposit or bankers’ acceptances maturing
within 1 year from the date of acquisition thereof either (i) issued by any
bank
organized under the laws of the United States or any state thereof which bank
has a rating of A or A2, or better, from S&P or ▇▇▇▇▇’▇, or (ii)
certificates of deposit less than or equal to $100,000 in the aggregate issued
by any other bank insured by the Federal Deposit Insurance Corporation,
(f) Eurodollar deposits, and (g) money market or other mutual funds
substantially all of whose assets comprise securities of the types described
in
preceding clauses
(a)-(f)
above.
“Cash
Management Bank”
has
the
meaning specified in Section
6.18(a).
“CERCLA”
means
the United States Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. §§ 9601 et seq.).
“Change
of Control”
means
(a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of
the United States Securities and Exchange Act of 1934, as amended), becomes
the
beneficial owner (as defined in Rule 13d-3 under such Exchange Act), directly
or
indirectly, of 50%, or more, of the Voting Stock of Parent, or (b) a majority
of
the members of the Board of Directors do not constitute Continuing
Directors.
“Closing
Date”
means
the first date on which any Loan is made or any Letter of Credit is
Issued.
“Code”
means
the U.S. Internal Revenue Code of 1986.
“Collateral”
means
all property and interests in property and proceeds thereof now owned or
hereafter acquired by any Loan Party in or upon which a Lien is granted or
purported to be granted pursuant to any Loan Document.
“Collateral
Access Agreement”
means
a
waiver or consent in form and substance satisfactory to the Administrative
Agent
executed by any lessor of Real Property leased by a Borrower (exclusive of
retail store locations) or any other Person having a Lien upon, or having rights
or interests in the inventory pledged hereunder or a Bailee
Acknowledgment.
“Collections”
means
all cash, checks, credit card slips or receipts, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of the Borrowers.
“Commitment”
means,
with respect to any Lender, such Lender’s Revolving Credit
Commitment.
8
“Compliance
Certificate”
means
a
certificate substantially in the form of Exhibit G.
“Concentration
Account”
means
an account designated as such on Schedule
8
of the
Perfection Certificate.
“Continuing
Director”
means
(a) any member of the Board of Directors who was a director of Parent on the
Closing Date, and (b) any individual who becomes a member of the Board of
Directors after the Closing Date if such individual was appointed or nominated
for election to the Board of Directors by a majority of the then Continuing
Directors.
“Contractual
Obligation”
means,
with respect to any Person, any provision of any Security issued by such Person
or of any document or undertaking (other than a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which
any
of its property is subject.
“Control
Agreement”
means,
with respect to any deposit account, any securities account, commodity account,
securities entitlement or commodity contract (except for accounts designated
as
“Store Accounts” on Schedule
8
of the
Perfection Certificate), an agreement, in form and substance satisfactory to
the
Administrative Agent, among the Administrative Agent, the financial institution
or other Person at which such account is maintained or with which such
entitlement or contract is carried and the Loan Party maintaining such account,
effective to grant “control” (as defined under the applicable UCC) over such
account to the Administrative Agent.
“Controlled
Deposit Account”
means
each deposit account (including all funds on deposit therein) that is the
subject of an effective Control Agreement and that is maintained by any Loan
Party with a financial institution.
“Controlled
Securities Account”
means
each securities account or commodity account (including all financial assets
held therein and all certificates and instruments, if any, representing or
evidencing such financial assets) that is the subject of an effective Control
Agreement and that is maintained by any Loan Party with a securities
intermediary or commodity intermediary.
“Copyrights”
means
all rights, title and interests (and all related IP Ancillary Rights) arising
under any Requirement of Law in or relating to copyrights and all mask work,
database and design rights, whether or not registered or published, all
registrations and recordations thereof and all applications in connection
therewith.
“Corporate
Chart”
means
a
document in form reasonably acceptable to the Administrative Agent and setting
forth, as of a date set forth therein, for each Person that is a Loan Party,
that is subject to Section 6.11
or that
is a Subsidiary or joint venture of any of them, (a) the full legal name of
such
Person, (b) the jurisdiction of organization and any organizational number
and
tax identification number of such Person, (c) the location of such Person’s
chief executive office (or, if applicable, sole place of business) and (d)
the
number of shares of each class of Stock of such Person (other than Parent)
authorized, the number outstanding and the number and percentage of such
outstanding shares for each such class owned, directly or indirectly, by any
Loan Party or any Subsidiary of any of them.
“Cost”
means
the calculated cost of purchases, as determined from invoices received by a
Borrower, such Borrower’s purchase journal or stock ledger, based upon such
Borrower’s accounting practices known to the Administrative Agent, which
practices are in effect on the date on which this Agreement was executed or
subsequently adopted with the written approval of the Administrative Agent.
“Cost” does not include the value of any capitalized costs unrelated to the
acquisitions of inventory used in the Borrowers’ calculation of cost of goods
sold, but may include other charges used in such Borrower’s determination of
cost of goods sold and bringing goods to market, all within the Administrative
Agent’s Permitted Discretion and in accordance with GAAP.
9
“Credit
Card Agreements”
means
those certain credit card receipts agreements, each in form and substance
reasonably satisfactory to the Administrative Agent and each of which is among
the Administrative Agent, the applicable Borrower and the applicable Credit
Card
Processors.
“Credit
Card Issuer”
means
collectively (a) MasterCard or Visa bank credit or debit cards or other bank
credit or debit cards issued through MasterCard International, Inc., Visa,
U.S.A., Inc. or Visa International, American Express, Discover, and Diners
Club
(or their respective successors), and (b) private label credit cards of the
Borrowers; provided,
however,
Accounts due from private label credit card issuers shall not be included in
Eligible Credit Card Receivables unless and until (i) the Administrative Agent
has completed a review of such Accounts, including, without limitation, any
agreements between a Borrower and a private label credit card provider, the
results of which shall be satisfactory to the Administrative Agent in its
reasonable discretion, and (ii) the Administrative Agent has notified the Parent
of its consent to such inclusion and to the amount of any Reserves which shall
be taken in connection with such inclusion. Accordingly, the Borrowers
acknowledge and agree that Accounts due from private label credit card issuers
shall not be included in the calculation of the U.S. Borrowing Base or the
Canadian Borrowing Base on the Closing Date.
“Credit
Card Processor”
means
any Person that acts as a credit card clearinghouse or processor with respect
to
any sales transactions involving credit card purchases by customers using credit
cards issued by any Credit Card Issuer.
“Default”
means
any Event of Default and any event that, with the passing of time or the giving
of notice or both, would become an Event of Default.
“Disclosure
Documents”
means,
collectively, (a) all confidential information memoranda and related materials
prepared in connection with the syndication of the Facilities and (b) all other
documents filed by any Group Member with the United States Securities and
Exchange Commission.
“Documentary
Letter of Credit”
means
any Letter of Credit that is drawable upon presentation of documents evidencing
the sale or shipment of goods purchased by any Borrower in the ordinary course
of its business.
“Dollars”
and
the
sign “$”
each
mean the lawful money of the United States of America.
“Domestic
Person”
means
any “United
States person”
under
and as defined in Section 770l(a)(30) of the Code.
“E-Fax”
means
any system used to receive or transmit faxes electronically.
10
“Electronic
Transmission”
means
each document, instruction, authorization, file, information and any other
communication transmitted, posted or otherwise made or communicated by e-mail
or
E-Fax, or otherwise to or from an E-System or other equivalent
service.
“Eligible
Accounts”
means
those Accounts created by Wholesale in the ordinary course of its business
in
connection with or that arise out of its sale of goods on a whole-sale basis,
that comply with each of the representations and warranties respecting Eligible
Accounts made in the Loan Documents, and that are not excluded as ineligible
by
virtue of one or more of the excluding criteria set forth below; provided,
however,
that
such criteria may be revised from time to time by the Administrative Agent
in
the Administrative Agent’s Permitted Discretion. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and
unapplied cash. Eligible Accounts shall not include the following:
(a) Accounts
that the Account Debtor has failed to pay within 60 days of original invoice
date or Accounts with selling terms of more than 60 days;
(b) Accounts
owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
owed by that Account Debtor (or its Affiliates) are deemed ineligible under
clause
(a)
above;
(c) Accounts
with respect to which the Account Debtor is an Affiliate of a U.S. Borrower
or
an employee or agent of a U.S. Borrower or any Affiliate of a U.S.
Borrower;
(d) Accounts
arising in a transaction wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a sale on approval, a ▇▇▇▇
and
hold, or any other terms by reason of which the payment by the Account Debtor
may be conditional;
(e) Accounts
that are not payable in Dollars;
(f) Accounts
with respect to which the Account Debtor either (i) does not maintain its chief
executive office in the United States, or (ii) is not organized under the laws
of the United States or any state thereof, or (iii) is the government of any
foreign country or sovereign state, or of any state, province, municipality,
or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless (y) the Account is
supported by an irrevocable letter of credit satisfactory to the Administrative
Agent (as to form, substance, and issuer or domestic confirming bank) that
has
been delivered to the Administrative Agent and is directly drawable by the
Administrative Agent, or (z) the Account is covered by credit insurance in
form,
substance, and amount, and by an insurer, satisfactory to the Administrative
Agent;
(g) Accounts
with respect to which the Account Debtor is either (i) the United States or
any
department, agency, or instrumentality of the United States (exclusive, however,
of Accounts with respect to which Wholesale has complied, to the reasonable
satisfaction of the Administrative Agent, with the Assignment of Claims Act,
31
USC § 3727), or (ii) any state of the United States;
(h) Accounts
with respect to which the Account Debtor is a creditor of Wholesale, has or
has
asserted a right of setoff, or has disputed its obligation to pay all or any
portion of the Account, to the extent of such claim, right of setoff, or
dispute;
11
(i) Accounts
with respect to an Account Debtor whose total obligations owing to Wholesale
exceed 10% (such percentage, as applied to a particular Account Debtor, being
subject to reduction by the Administrative Agent in its Permitted Discretion
if
the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage; provided,
however,
that,
in each case, the amount of Eligible Accounts that are excluded because they
exceed the foregoing percentage shall be determined by the Administrative Agent
based on all of the otherwise Eligible Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limit;
(j) Accounts
with respect to which the Account Debtor is subject to an Insolvency Proceeding,
is not Solvent, has gone out of business, or as to which Wholesale has received
notice of an imminent Insolvency Proceeding or a material impairment of the
financial condition of such Account Debtor;
(k) Accounts,
the collection of which, Agent, in its Permitted Discretion, believes to be
doubtful by reason of the Account Debtor’s financial condition;
(l) Accounts
that are not subject to a valid and perfected first priority Lien in favor
of
the Administrative Agent;
(m) Accounts
with respect to which (i) the goods giving rise to such Account have not been
shipped and billed to the Account Debtor, or (ii) the services giving rise
to
such Account have not been performed and billed to the Account Debtor;
or
(n) Accounts
that represent the right to receive progress payments or other advance ▇▇▇▇▇▇▇▇
that are due prior to the completion of performance by the Wholesale of the
subject contract for goods or services.
Notwithstanding
the foregoing, that portion of the U.S. Borrowing Base attributable to Eligible
Accounts shall not exceed $5,000,000 at any time. In addition, Eligible Accounts
shall not be included in the calculation of the U.S. Borrowing Base, unless
and
until (i) the Administrative Agent has completed a review of such Accounts,
the
results of which shall be satisfactory to the Administrative Agent in its
reasonable discretion, and (ii) the Administrative Agent has notified U.S.
Borrower in writing of its consent to such inclusion and to the amount of any
Reserves which shall be taken in connection with such inclusion. Accordingly,
U.S. Borrowers acknowledge and agree that Eligible Accounts shall not be
included in the calculation of the U.S. Borrowing Base on the Closing
Date.
“Eligible
Credit Card Receivables”
means
Accounts (other than Eligible Accounts) due to a Borrower on a non recourse
basis from a Credit Card Issuer or Credit Card Processor arising in the ordinary
course of business and net of such Credit Card Issuer’s or Credit Card
Processor’s expenses and chargebacks, which have been earned by performance and
are not deemed by the Administrative Agent, in its Permitted Discretion, to
be
ineligible for inclusion in the calculation of the Borrowing Base by virtue
of
one or more of the excluding criteria set forth below. Unless otherwise approved
in writing by the Administrative Agent, none of the following shall be deemed
to
be Eligible Credit Card Receivables:
12
(a) Accounts
that have been outstanding for more than 5 Business Days from the date of
sale;
(b) Accounts
with respect to which a Borrower does not have good, valid and marketable title
thereto, free and clear of any Lien (other than Liens granted to the
Administrative Agent, for its benefit and the ratable benefit of the relevant
Lenders, pursuant to the Loan Documents);
(c) Accounts
that are not subject to a first priority security interest in favor of the
Administrative Agent, for the benefit of itself and Lenders;
(d) Accounts
which are disputed, subject to recourse against a Borrower, or with respect
to
which a claim, counterclaim, offset or chargeback has been asserted (to the
extent of such claim, counterclaim, offset or chargeback); or
(e) Accounts,
the collection of which, the Administrative Agent, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor’s financial
condition.
“Eligible
Inventory”
means
(a) Eligible In-Transit Inventory, and (b) inventory of the relevant Borrower
consisting of finished goods held for sale in the ordinary course of such
Borrowers’ business located at one of such Borrower’s business locations set
forth on Schedule
4(b)
of the
Perfection Certificate (or in-transit between any such locations), that complies
with each of the representations and warranties respecting Eligible Inventory
made by such Borrower in the Loan Documents, and that is not excluded as
ineligible by virtue of one or more of the excluding criteria set forth below,
which criteria may be fixed and revised from time to time by the Administrative
Agent in its Permitted Discretion to address the results of any audit or
appraisal performed by the Administrative Agent from time to time after the
Closing Date. In determining the value of Eligible Inventory, inventory shall
be
valued at the lower of Cost or market on a basis consistent with the Borrower’s
accounting practices.
An
item
of inventory (that is not Eligible In-Transit Inventory) shall not be included
in Eligible Inventory if:
(a) a
Borrower does not have good, valid and marketable title thereto (including
inventory acquired on consignment);
(b) (i)
in
the case of the U.S. Borrowers, it is not located at one of the locations in
the
United States set forth on Schedule
4(b)
of the
Perfection Certificate or in transit from one such location to another such
location, as such locations are updated by the U.S. Borrowers from time to
time
by written notice to the Administrative Agent, and (ii) in the case of Bombay
Canada, it is not located at one of the locations in Canada set forth on
Schedule
4(b)
of the
Perfection Certificate or in transit from one such location to another such
location, as such locations are updated by Bombay Canada from time to time
by
written notice to the Administrative Agent;
(c) except
with respect to inventory described in clause
(b)
of
Section
6.5,
it is
located at a warehouse, distribution center or other real property (other than
a
retail store location) leased by a Borrower or in a fulfillment center or
contract warehouse, in each case, unless it is subject to a Collateral Access
Agreement executed by the lessor, fulfillment services provider or other
applicable third party;
(d) it
is
located in a contract warehouse or is otherwise stored with a bailee,
warehouseman or similar third party unless it is subject to a Bailee
Acknowledgment executed by the bailee, warehouseman, or other third party,
as
the case may be, and unless it is segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises;
13
(e) it
is not
subject to a valid and perfected first priority security the Administrative
Agent’s Lien;
(f) it
consists of goods returned or rejected by a Borrower’s customers unless such
goods are repackaged and saleable in the ordinary course of such Borrower’s
business; or
(g) other
than saleable clearance goods arising in the ordinary course of business
consistent with past practice, consists of goods that are obsolete or slow
moving (for example, more than 18 months old), custom items, work-in-process,
raw materials, or goods that constitute spare parts, packaging and shipping
materials, supplies used or consumed in a Borrower’s business, ▇▇▇▇ and hold
goods, defective goods, and “seconds,” or inventory acquired on
consignment.
“Eligible
In-Transit Inventory”
means
collectively, Canadian Eligible In-Transit Inventory and U.S. Eligible
In-Transit Inventory. Notwithstanding the foregoing, that portion of the
Aggregate Borrowing Base attributable to Eligible In-Transit Inventory shall
not
exceed twenty percent (20%) of the Aggregate Borrowing Base at any
time.
“Eligible
Real Property”
means
the Real Property consisting of the Bombay Office Complex and which is subject
to the Mortgage and a Lien in favor of the Administrative Agent for the benefit
of the relevant Secured Parties and upon which no other Liens exist, other
than
Permitted Liens.
“Environmental
Actions”
means
any complaint, summons, citation, notice, directive, order, claim, litigation,
investigation, judicial or administrative proceeding, judgment, letter, or
other
communication, each, by or from any Governmental Authority, or any third party
involving (x) violations of Environmental Laws or (y) releases of Hazardous
Materials from (a) any assets, properties, or businesses of any Borrower or
any
predecessor in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by
any
Borrower or any predecessor in interest.
“Environmental
Law”
means
any applicable federal, state, provincial, foreign or local statute, law, rule,
regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy or rule of common law now or hereafter in effect
and
in each case as amended, or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, to the extent binding on the Borrowers, relating to the environment,
employee health and safety, or Hazardous Materials, including CERCLA; RCRA;
the
Federal Water Pollution Control Act, 33 USC §1251 et seq.
the
Toxic Substances Control Act, 15 USC §2601 et seq.
the
Clean Air Act, 42 USC §7401 et seq.;
the
Safe Drinking Water Act, 42 USC §3803 et seq.;
the Oil
Pollution Act of 1990, 33 USC §2701 et seq.;
the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC §11001
et seq.;
the
Hazardous Material Transportation Act, 49 USC §1801 et seq.;
and the
Occupational Safety and Health Act, 29 USC §651 et seq.
(to the
extent it regulates occupational exposure to Hazardous Materials); any state
and
local or foreign counterparts or equivalents, in each case as amended from
time
to time.
14
“Environmental
Liabilities and Costs”
means
all liabilities, monetary obligations, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts,
or consultants, and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand
by any Governmental Authority or any third party, and which relate to any
Environmental Action.
“Environmental
Lien”
means
any Lien in favor of any Governmental Authority for Environmental Liabilities
and Costs.
“ERISA”
means
the United States Employee Retirement Income Security Act of 1974.
“ERISA
Affiliate”
means
any
Person which is
under
common control, or treated
as a
single employer,
with a
Borrower under §414 of the Code.
“ERISA
Reportable Event”
means
a
reportable event with respect to a Guaranteed Pension Plan within the meaning
of
§4043 of ERISA and the regulations promulgated thereunder.
“E-Signature”
means
the process of attaching to or logically associating with an Electronic
Transmission an electronic symbol, encryption, digital signature or process
(including the name or an abbreviation of the name of the party transmitting
the
Electronic Transmission) with the intent to sign, authenticate or accept such
Electronic Transmission.
“E-System”
means
any electronic system, including Intralinks®
and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Administrative Agent, any of its Related Persons
or
any other Person, providing for access to data protected by passcodes or other
security system.
“Eurodollar
Base Rate”
means,
with respect to any Interest Period for any Eurodollar Rate Loan, the rate
determined by the Administrative Agent to be the offered rate for deposits
in
Dollars for the applicable Interest Period appearing on the Dow ▇▇▇▇▇ Markets
Telerate Page 3750 as of 11:00 a.m. (London time) on the second full
Business Day next preceding the first day of each Interest Period. In the event
that such rate does not appear on the Dow ▇▇▇▇▇ Markets Telerate Page 3750
(or
otherwise on the Dow ▇▇▇▇▇ Markets screen) at such time, the “Eurodollar Base
Rate” shall be determined by reference to such other comparable publicly
available service for displaying the offered rate for deposit in Dollars in
the
London interbank market as may be selected by the Administrative Agent and,
in
the absence of availability, such other method to determine such offered rate
as
may be selected by the Administrative Agent in its sole discretion.
“Eurodollar
Rate”
means,
with respect to any Interest Period and for any Eurodollar Rate Loan, an
interest rate per annum determined as the ratio of (a) the Eurodollar Base
Rate
with respect to such Interest Period for such Eurodollar Rate Loan to (b) the
difference between the number one and the Eurodollar Reserve Requirements with
respect to such Interest Period and for such Eurodollar Rate Loan.
“Eurodollar
Rate Loan”
means
any Loan that bears interest based on the Eurodollar Rate.
“Eurodollar
Reserve Requirements”
means,
with respect to any Interest Period and for any Eurodollar Rate Loan, a rate
per
annum equal to the aggregate, without duplication, of the maximum rates
(expressed as a decimal number) of reserve requirements in effect 2 Business
Days prior to the first day of such Interest Period (including basic,
supplemental, marginal and emergency reserves) under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction with
respect thereto dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as “eurocurrency liabilities” in Regulation D of
the Federal Reserve Board) maintained by a member bank of the United States
Federal Reserve System.
15
“Event
of Default”
has
the
meaning specified in Section 8.1.
“Excluded
Foreign Subsidiary”
means
any Subsidiary that is not a Domestic Person.
“Existing
Agent”
means
▇▇▇▇▇ Fargo Retail Finance, LLC, in its capacity as administrative agent under
the Existing Credit Agreement.
“Existing
Credit Agreement”
means
that certain Credit Agreement, dated as of September 29, 2004, as amended,
among
the Borrower, the institutions party thereto as lenders and issuers and the
Existing Agent.
“Facilities”
means
the U.S. Revolving Credit Facility and the Canadian Revolving Credit
Facility.
“Federal
Funds Rate”
means,
for any period, a fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as determined by the Administrative Agent in its sole
discretion.
“Federal
Reserve Board”
means
the Board of Governors of the United States Federal Reserve System and any
successor thereto.
“Fee
Letter”
means
the letter agreement, dated as of September 14, 2006, addressed to the Parent
from the Administrative Agent and accepted by the Parent, with respect to
certain fees to be paid from time to time to the Administrative Agent and its
Related Persons.
“FEIN”
means
Federal Employer Identification Number.
“Financial
Statement”
means
each financial statement delivered pursuant to Sections
4.10
and
5.3.
“Fiscal
Period”
means
one of three fiscal periods in a Fiscal Quarter, the first of such periods
comprised of four weeks, the second of such periods comprised of five weeks,
and
the third of such periods comprised of four weeks, with each of the weeks in
a
Fiscal Quarter ending on the close of business on a Saturday (except that the
last fiscal period in the last Fiscal Quarter of a 53 week year shall be five
weeks). There are twelve Fiscal Periods in a Fiscal Year.
“Fiscal
Quarter”
means
one of four thirteen or fourteen week quarters in a Fiscal Year, with the first
of such quarters beginning on the first day of a Fiscal Year and ending on
the
Saturday of the last week in such quarter.
“Fiscal
Year”
means
the fifty-two or fifty-three week period ending on the Saturday closest to
the
last day of January of any calendar year.
16
“GAAP”
means
generally accepted accounting principles in the United States of America, as
in
effect from time to time, set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants, in the statements and pronouncements of the Financial Accounting
Standards Board and in such other statements by such other entity as may be
in
general use by significant segments of the accounting profession that are
applicable to the circumstances as of the date of determination. Subject to
Section 1.3,
all
references to “GAAP”
shall
be to GAAP applied consistently with the principles used in the preparation
of
the Financial Statements described in Sections 4.10
and
5.3.
“GE
Canada”
has
the
meaning specified in the preamble.
“GE
Capital”
has
the
meaning specified in the preamble.
“Governmental
Authority”
means
any nation, sovereign or government, any state, province or other political
subdivision thereof, any agency, authority or instrumentality thereof and any
entity or authority exercising executive, legislative, taxing, judicial,
regulatory or administrative functions of or pertaining to government, including
any central bank regulatory body, arbitrator, public sector entity,
supra-national entity (including the European Union and the European Central
Bank) and any self-regulatory organization (including the National Association
of Insurance Commissioners).
“Governing
Documents”
means,
with respect to any Person, collectively and, in each case, together with any
modification of any term thereof, (a) the articles of incorporation, certificate
of incorporation, constitution or certificate of formation of such Person,
(b)
the bylaws, operating agreement or joint venture agreement of such Person,
(c)
any other constitutive, organizational or governing document of such Person,
whether or not equivalent, and (d) any other document setting forth the manner
of election or duties of the directors, officers or managing members of such
Person or the designation, amount or relative rights, limitations and
preferences of any Stock of such Person.
“Group
Members”
means,
collectively, any Borrower and its Subsidiaries.
“Guaranteed
Pension Plan”
means
any employee pension benefit plan within the meaning of §3(2) of ERISA
maintained or contributed to by any Borrower or any ERISA Affiliate the benefits
of which are guaranteed on termination in full or in part by the PBGC pursuant
to Title IV of ERISA, other than a Multiemployer Plan.
“Guarantor”
means
each Wholly Owned Subsidiary of the Borrower party to the Guaranty and Security
Agreement and each other Person that enters into any Guaranty Obligation with
respect to any Obligation of any Loan Party; provided,
that an
Excluded Foreign Subsidiary shall not guaranty the Obligations of the U.S.
Borrowers.
“Guaranty
and Security Agreement”
means
a
guaranty and security agreement, in substantially the form of Exhibit H,
among
the Administrative Agent, the U.S. Borrowers and other Guarantors from time
to
time party thereto.
“Guaranty
Obligation”
means,
as applied to any Person, any direct or indirect liability, contingent or
otherwise, of such Person for any Indebtedness, lease, dividend or other
obligation (the “primary
obligation”)
of
another Person (the “primary
obligor”),
if
the purpose or intent of such Person in incurring such liability, or the
economic effect thereof, is to guarantee such primary obligation or provide
support, assurance or comfort to the holder of such primary obligation or to
protect or indemnify such holder against loss with respect to such primary
obligation, including (a) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of any primary
obligation, (b) the incurrence of reimbursement obligations with respect to
any
letter of credit or bank guarantee in support of any primary obligation, (c)
the
existence of any Lien, or any right, contingent or otherwise, to receive a
Lien,
on the property of such Person securing any part of any primary obligation
and
(d) any liability of such Person for a primary obligation through any
Contractual Obligation (contingent or otherwise) or other arrangement (i) to
purchase, repurchase or otherwise acquire such primary obligation or any
security therefor or to provide funds for the payment or discharge of such
primary obligation (whether in the form of a loan, advance, stock purchase,
capital contribution or otherwise), (ii) to maintain the solvency, working
capital, equity capital or any balance sheet item, level of income or cash
flow,
liquidity or financial condition of any primary obligor, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance
by
any other party to any Contractual Obligation, (iv) to purchase, sell or lease
(as lessor or lessee) any property, or to purchase or sell services, primarily
for the purpose of enabling the primary obligor to satisfy such primary
obligation or to protect the holder of such primary obligation against loss
or
(v) to supply funds to or in any other manner invest in, such primary obligor
(including to pay for property or services irrespective of whether such property
is received or such services are rendered); provided,
however,
that
“Guaranty
Obligations”
shall
not include (x) endorsements for collection or deposit in the ordinary course
of
business and (y) product warranties given in the ordinary course of business.
The outstanding amount of any Guaranty Obligation shall equal the outstanding
amount of the primary obligation so guaranteed or otherwise supported or, if
lower, the stated maximum amount for which such Person may be liable under
such
Guaranty Obligation.
17
“Hazardous
Material”
means
(a) substances that are defined or listed in, or otherwise classified
pursuant to, any applicable laws or regulations as “hazardous substances,”
“hazardous materials,” “hazardous wastes,” “toxic substances,” or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or geothermal
resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical equipment that contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls
in
excess of 50 parts per million.
“Hedging
Agreement”
means
any Interest Rate Contract, foreign exchange, swap, option or forward contract,
spot, cap, floor or collar transaction, any other derivative instrument and
any
other similar speculative transaction and any other similar agreement or
arrangement designed to alter the risks of any Person arising from fluctuations
in any underlying variable.
“Indebtedness”
means,
as to any Person means, without duplication: (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other obligations in respect of
letters of credit, bankers acceptances, interest rate swaps, or other financial
products, (c) all obligations as a lessee under Capital Leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of a Person
or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e) all obligations to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business), (f) all
obligations owing under Hedging Agreements or similar agreements, (g) all sales
by such Person of (i) accounts or general intangibles for money due or to become
due, (ii) chattel paper, instruments or documents creating or evidencing a
right
to payment of money, or (iii) other receivables (collectively “receivables”),
whether pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating thereto
or a disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith, (h) every obligation of such Person (an “equity
related purchase obligation”) to purchase, redeem, retire or otherwise acquire
for value any shares of Stock issued by such Person or any rights measured
by
the value of such Stock, (i) every obligation in respect of Indebtedness of
any
other entity (including any partnership in which such Person is a general
partner) to the extent that 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 that the terms of such Indebtedness provide that such Person is
not
liable therefor and such terms are enforceable under applicable law, (j) any
obligation guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
of any other Person that constitutes Indebtedness under any of clauses
(a)
through
(i)
above,
and (k) every obligation of such Person under any Synthetic Lease.
18
“Indemnified
Matter”
has
the
meaning specified in Section 10.4.
“Indemnitee”
has
the
meaning specified in Section 10.4.
“Initial
Projections”
means
those financial projections, dated August 24, 2006 covering the Fiscal Years
ending in January 2007 and January 2008 and delivered to the Administrative
Agent by the Borrower prior to the date hereof.
“Insolvency
Proceeding”
means
any proceeding commenced by or against any Person under any provision of the
Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’
Creditors Arrangement Act (Canada), or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally or with creditors,
or
proceedings seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, or other similar relief.
“Intellectual
Property”
means
all rights, title and interests in or relating to intellectual property and
industrial property arising under any Requirement of Law and all IP Ancillary
Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet
Domain Names, Trade Secrets and IP Licenses.
“Interest
Period”
means,
with respect to any Eurodollar Rate Loan, the period commencing on the date
such
Eurodollar Rate Loan is made or converted to a Eurodollar Rate Loan or, if
such
loan is continued, on the last day of the immediately preceding Interest Period
therefor and, in each case, ending 7 days or 1, 2, 3 or 6 months thereafter,
as
selected by the Borrower pursuant hereto; provided,
however,
that
(a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business
Day,
unless the result of such extension would be to extend such Interest Period
into
another such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day, (b) any
Interest Period that begins on the last Business Day of a calendar month (or
on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of a
calendar month, (c) the Borrower may not select any Interest Period for
Eurodollar Rate Loans ending after the Scheduled Maturity Date, (d) the Borrower
may not select any Interest Period in respect of Eurodollar Rate Loans having
an
aggregate principal amount of less than $1,000,000 and (e) there shall be
outstanding at any one time no more than 10 Interest Periods.
19
“Interest
Rate Contracts”
means
all interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements and interest rate insurance.
“Internet
Domain Names”
means
all rights, title and interests (and all related IP Ancillary Rights) arising
under any Requirement of Law in or relating to Internet domain
names.
“Inventory
Reserves”
means
such reserves as may be established from time to time by Administrative Agent
in
its Permitted Discretion with respect to the determination of the saleability,
at retail, of the Eligible Inventory or which reflect such other factors as
affect the market value of the Eligible Inventory. Without limiting the
generality of the foregoing, Inventory Reserves may include (but are not limited
to) (a) reserves based on obsolescence or inventory shrinkage, (b) the estimated
reclamation claims of unpaid sellers of inventory sold to a Borrower, (c) change
in inventory character, composition or mix, (d) imbalance of inventory, retail
markdowns or markups inconsistent with prior period practice and performance,
current business plans, or advertising calendar and planned advertising events,
(e) the change in the Net Retail Liquidation Value of the inventory, or (f)
as
reasonably required by the Administrative Agent to protect Collateral value
based upon changes to the ordinary course of business of the
Borrowers.
“Investment”
means,
with respect to any Person, any investment by such Person in any other Person
(including Affiliates) in the form of loans, guarantees, advances, or capital
contributions (excluding (a) commission, travel, and similar advances to
officers and employees of such Person made in the ordinary course of business,
and (b) bona fide Accounts arising in the ordinary course of business consistent
with past practice), purchases or other acquisitions of Indebtedness, Stock,
or
all or substantially all of the assets of such other Person (or of any division
or business line of such other Person), and any other items that are or would
be
classified as investments on a balance sheet prepared in accordance with
GAAP.
“IP
Ancillary Rights”
means,
with respect to any other Intellectual Property, as applicable, all foreign
counterparts to, and all divisionals, reversions, continuations,
continuations-in-part, reissues, reexaminations, renewals and extensions of,
such Intellectual Property and all income, royalties, proceeds and Liabilities
at any time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property, including
all
rights to ▇▇▇ or recover at law or in equity for any past, present or future
infringement, misappropriation, dilution, violation or other impairment thereof,
and, in each case, all rights to obtain any other IP Ancillary
Right.
“IP
License”
means
all Contractual Obligations (and all related IP Ancillary Rights), whether
written or oral, granting any right title and interest in or relating to any
Intellectual Property.
“IRS”
means
the Internal Revenue Service of the United States and any successor
thereto.
20
“Issue”
means,
with respect to any Letter of Credit, to issue, extend the expiration date
of,
renew (including by failure to object to any automatic renewal on the last
day
such objection is permitted), increase the face amount of, or reduce or
eliminate any scheduled decrease in the face amount of, such Letter of Credit,
or to cause any Person to do any of the foregoing. The terms “Issued”
and
“Issuance”
have
correlative meanings.
“ITA”
means
the Income
Tax Act
(Canada).
“L/C
Cash Collateral Account”
means
any Cash Collateral Account (a) specifically designated as such by the Borrower
in a notice to the Administrative Agent and (b) from and after the effectiveness
of such notice, not containing any funds other than those required under the
Loan Documents to be placed therein.
“L/C
Issuer”
means
(a) GE Capital or any of its Affiliates and (b) each Person that hereafter
becomes an L/C Issuer with the approval of, and pursuant to an agreement with
and in form and substance satisfactory to, the Administrative Agent and the
Borrower, in each case in their capacity as L/C Issuers hereunder and together
with their successors.
“L/C
Obligations”
means,
for any Letter of Credit at any time, the sum of, each expressed in Dollars,
(a)
the L/C Reimbursement Obligations at such time for such Letter of Credit and
(b)
the aggregate maximum undrawn face amount of such Letter of Credit outstanding
at such time.
“L/C
Reimbursement Agreement”
has
the
meaning specified in Section 2.4(a).
“L/C
Reimbursement Date”
has
the
meaning specified in Section 2.4(e).
“L/C
Reimbursement Obligation”
means,
for any Letter of Credit, the obligation of the Borrower to the L/C Issuer
thereof, as and when matured, to pay all amounts drawn under such Letter of
Credit in Dollars or other applicable currency.
“L/C
Request”
has
the
meaning specified in Section 2.4(b).
“L/C
Sublimit”
means
$75,000,000.
“L/C
Undertaking”
means
the L/C Issuer’s commitment to issue Letters of Credit for the account of U.S.
Borrowers under Section
2.4(a)
or to
acquire participations under Section
2.4(c).
“Lender”
means,
collectively, the Swingline Lender, the Canadian Swingline Lender and any other
financial institution or other Person that (a) is listed on the signature
pages hereof as a “Lender”
or
(b)
from time to time becomes a party hereto by execution of an Assignment, in
each
case together with its successors.
“Lender
Group”
means,
individually and collectively, each Lender, the Canadian Agent and the
Administrative Agent.
“Letter
of Credit”
means
any letter of credit Issued pursuant to Section 2.4.
“Liabilities”
means
all claims, actions, suits, judgments, damages, losses, liabilities,
obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes,
commissions, charges, disbursements and expenses, in each case of any kind
or
nature (including interest accrued thereon or as a result thereto and fees,
charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
21
“Lien”
means
any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, easement, lien (statutory or other), security interest
or other security arrangement and any other preference, priority or preferential
arrangement of any kind or nature whatsoever, including any conditional sale
contract or other title retention agreement, the interest of a lessor under
a
Capital Lease and any synthetic or other financing lease having substantially
the same economic effect as any of the foregoing.
“Loan”
means
any loan made or deemed made by any Lender hereunder.
“Loan
Account”
means
the account identified in Section
2.13.
“Loan
Documents”
means,
collectively, this Agreement, any Notes, the Guaranty and Security Agreement,
the Mortgages, the Control Agreements, the Canadian Security Documents, the
Fee
Letter, the L/C Reimbursement Agreements, any Perfection Certificates and,
when executed, each document executed by a Loan Party and delivered to the
Administrative Agent, any Lender or any L/C Issuer in connection with or
pursuant to any of the foregoing or the Obligations, together with any
modification of any term, or any waiver with respect to, any of the
foregoing.
“Loan
Party”
means
each Borrower and each Guarantor.
“Material
Adverse Effect”
means
(a) a material adverse change in the business, operations, results of
operations, assets, liabilities or financial condition of the Group Members
taken as a whole, (b) a material impairment of a Borrower’s ability to perform
its obligations under the Loan Documents to which it is a party or of the
Secured Parties ability to enforce the Obligations or realize upon the
Collateral or (c) a material impairment of the validity, enforceability,
attachment, perfection or priority of Agents’ Liens with respect to the
Collateral.
“Material
Environmental Liabilities”
means
Environmental Liabilities exceeding $7,000,000 in the aggregate.
“Maximum
Canadian Revolver Amount”
means
the aggregate amount of all Canadian Revolving Loans and Canadian Swing Loans
that may be borrowed by or made to Bombay Canada under this Agreement;
provided,
however,
that
the Maximum Canadian Revolver Amount shall in no event exceed
$18,000,000.
“Maximum
Revolver Amount”
means
the aggregate amount of all Loans that may be borrowed by or made to, and
Letters of Credit that may be issued for the account of, any Borrower under
this
Agreement; provided,
however,
that
the Maximum Revolver Amount shall in no event exceed $125,000,000.
“Minimum
Availability Amount”
means,
as of any date of determination, 7.5% of the Aggregate Borrowing
Base.
“Moody’s”
means
▇▇▇▇▇’▇ Investors Service, Inc., or its successor.
22
“Mortgage”
means
any mortgage, deed of trust or other document executed or required herein to
be
executed by any Loan Party and granting a Lien over Eligible Real Property
in
favor of the Administrative Agent as security for the Obligations.
“Mortgage
Supporting Documents”
means,
with respect to any Mortgage, each document (including title policies or
marked-up unconditional insurance binders (in each case, together with copies
of
all documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built
surveys (in form and as to a date that is sufficiently acceptable to the title
insurer issuing title insurance to the Administrative Agent for such title
insurer to deliver endorsements to such title insurance as reasonably requested
by the Administrative Agent), environmental assessments and reports and evidence
regarding recording and payment of fees, insurance premium and taxes) that
the
Administrative Agent may reasonably request, to create, register, perfect,
maintain, evidence the existence, substance, form or validity of or enforce
a
valid Lien on the Eligible Real Property in favor of the Administrative Agent
for the benefit of the Secured Parties, subject only to such Permitted
Liens.
“Multiemployer
Plan”
means
any multiemployer plan within the meaning of §3(37) of ERISA maintained or
contributed to by any Borrower or any ERISA Affiliate.
“Net
Cash Proceeds”
means
proceeds received in cash from (a) any Sale of, or Property Loss Event with
respect to, property, net of (i) the customary out-of-pocket cash costs, fees
and expenses paid or required to be paid in connection therewith, (ii) taxes
paid or reasonably estimated to be payable as a result thereof and
(iii) any amount required to be paid or prepaid on Indebtedness (other than
the Obligations and Indebtedness owing to any Group Member) secured by the
property subject thereto or (b) any sale or issuance of Stock or incurrence
of
Indebtedness, in each case net of brokers’, advisors’ and investment banking
fees and other customary out-of-pocket underwriting discounts, commissions
and
other customary out-of-pocket cash costs, fees and expenses, in each case
incurred in connection with such transaction; provided,
however,
that
any such proceeds received by any Subsidiary of the Borrower that is not a
Wholly Owned Subsidiary of the Borrower shall constitute “Net
Cash Proceeds”
only
to
the extent of the aggregate direct and indirect beneficial ownership interest
of
the Borrower therein.
“Net
Liquidation Percentage”
means,
at any date of determination, the percentage of the Cost value of the Borrowers’
Eligible Inventory that is estimated to be recoverable in an orderly liquidation
of such Eligible Inventory, net of liquidation expenses, such percentage to
be
as determined from time to time by the Administrative Agent, in its Permitted
Discretion, or by a qualified appraisal company selected by the Administrative
Agent.
“Net
Retail Liquidation Value”
means,
at any date of determination, the result (expressed in Dollars) of the Net
Liquidation Percentage times
the Cost
value of Eligible Inventory as of such date.
“Non-Funding
Lender”
means
a
U.S. Non-Funding Lender and/or a Canadian Non-Funding Lender, as the case may
be.
“Note”
means
a
promissory note of the Borrower, in substantially the form of Exhibit B, payable
to the order of a Lender in any Facility in a principal amount equal to the
amount of such Lender’s Commitment under such Facility.
“Notice
of Borrowing”
has
the
meaning specified in Section 2.2.
23
“Notice
of Conversion or Continuation”
has
the
meaning specified in Section 2.10.
“Obligations”
means,
with respect to any Loan Party, all amounts, obligations, liabilities, covenants
and duties of every type and description owing by such Loan Party to the
Administrative Agent, the Canadian Agent, any Lender, any L/C Issuer, any other
Indemnitee, any participant, whether direct or indirect (regardless of whether
acquired by assignment), absolute or contingent, due or to become due, whether
liquidated or not, now existing or hereafter arising and however acquired,
and
whether or not evidenced by any instrument or for the payment of money,
including, without duplication, (a) if such Loan Party is the Borrower, all
Loans and L/C Obligations, (b) all interest, whether or not accruing after
the
filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceeding, whether or not a claim for post-filing
or
post-petition interest is allowed in such proceeding, and (c) all other fees,
expenses (including fees, charges and disbursement of counsel), interest,
commissions, charges, costs, disbursements, indemnities and reimbursement of
amounts paid and other sums chargeable to such Loan Party under any Loan
Document (including those payable to L/C Issuers as described in Section 2.11).
“Overadvances”
has
the
meaning specified in Section 2.1A(c).
“Parent”
has
the
meaning specified in the preamble.
“Patents”
means
all rights, title and interests (and all related IP Ancillary Rights) arising
under any Requirement of Law in or relating to letters patent and applications
therefor.
“PBGC”
means
the Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
successor entity or entities having similar responsibilities.
“Perfection
Certificate”
means,
collectively, (a) the Perfection Certificate submitted by Parent to the
Administrative Agent with respect to each Group Member, together with the U.S.
Borrowers’ completed responses to the inquiries set forth therein, and (b) the
Perfection Certificate submitted by Bombay Canada to the Administrative Agent
with respect to Bombay Canada, together with Bombay Canada’s completed responses
to the inquiries set forth therein, the form and substance of each such
responses to be satisfactory to the Administrative Agent, in each case, together
with any amendments, modifications or supplements thereto.
“Permitted
Acquisition”
means
acquisitions of all or substantially all of the assets of a Person in or of
any
division or business line of a Person or Stock of a Person; provided,
(a) the
Administrative Agent shall receive at least 3 Business Days prior written notice
of such acquisition, which notice shall include a reasonably detailed
description of such acquisition, (b) such assets are located in the United
States or Canada (except that such location requirement shall not apply to
acquisitions of assets or stores from a licensee or franchisee of any Group
Member) and are those assets of a business that would comply with Section 6.2(d),
and
which business would not subject any Agent or any Lender to regulatory or third
party approvals in connection with the exercise of its rights and remedies
under
this Agreement or any Loan Documents, (c) no Default or Event of Default exists
prior to or immediately after giving effect to such acquisition, (d) the
Administrative Agent is granted a valid first priority perfected Lien in the
assets so acquired to the extent and in the manner contemplated by the Loan
Documents (subject to any Permitted Liens) and the applicable Group Member
shall
have delivered to the Administrative Agent evidence reasonably satisfactory
to
the Administrative Agent that all Liens with respect to the assets so acquired,
other than Permitted Liens, have been discharged in full, (e) the seller of
such
assets or Stock is not an Affiliate of any Group Member, (f) the terms of such
acquisition are on an arms length basis, (g) Section
6.11
is
complied with at the time of consummation of such acquisition (or concurrently
therewith), (h) the board of directors and (if required by applicable law)
the
shareholders, or the equivalent thereof, of the business to be acquired has
approved such acquisition, (i) the applicable Group Member shall have delivered
to Administrative Agent evidence satisfactory to the Administrative Agent that
such Group Member has completed such acquisition in accordance with the terms
of
the contracts and agreements entered into by such Person in connection with
such
acquisition, and (ii) certified copies of all such documents shall have been
delivered to the Administrative Agent, (i) no additional Indebtedness,
contingent obligations or other liabilities shall be incurred assumed or
otherwise be reflected on a consolidated balance sheet of the Borrowers after
giving effect to such acquisition, except, (i) Loans made or Letters of Credit
issued hereunder, (ii)
ordinary course trade payables, accrued expenses and unsecured Indebtedness
of
the Borrowers and (iii) Indebtedness otherwise permitted under Section
7.1,
and (j)
after giving effect to any such acquisition, Availability shall not be less
than
$25,000,000 and the Parent shall have delivered to the Administrative Agent
a
Compliance Certificate and Projections demonstrating that the Borrowers shall
have Availability of at least $25,000,000 at all times for the 2 Fiscal Quarters
immediately succeeding such acquisition.
24
“Permitted
Discretion”
means
a
determination made in good faith and in the exercise of reasonable (from the
perspective of a secured asset-based lender) business judgment.
“Permitted
Dispositions”
means
(a) sales or other dispositions by any Group Member of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business,
(b)
sales by any Group Member of inventory to buyers in the ordinary course of
business, (c) the use or transfer of money or Cash Equivalents by any Group
Member in a manner that is not prohibited by the terms of this Agreement or
the
other Loan Documents, (d) the licensing by any Group Member, on a non-exclusive
basis, of Intellectual Property in the ordinary course of business, (e) a
disposition between the Borrowers, (f) the surrender or waiver of contract
rights or the disposition, settlement, release or surrender of contract, tort
or
other claims of any kind in the ordinary course of business, (g) any disposition
of defaulted receivables that arose in the ordinary course of business for
collection, (h) the entering into of real property leases in respect of any
portion of the Bombay Office Complex in the ordinary course of business and
(i)
the sale of the Eligible Real Property, so long as the Net Cash Proceeds are
applied in accordance with Section
2.8(a).
“Permitted
Investments”
means
(a) Investments in cash and Cash Equivalents, (b) Investments in negotiable
instruments for collection, (c) advances made in connection with purchases
of
goods or services in the ordinary course of business, (d) Investments received
in settlement of amounts due to any Group Member effected in the ordinary course
of business or owing to a Group Member as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of any Group Member, (e) (i) Investments in a Borrower, (ii)
Investments in a Subsidiary of a Borrower, and (iii) to the extent otherwise
permitted hereunder, Investments in any Person who, simultaneously with such
Investment, becomes a Subsidiary of Parent and complies with Section
6.11
hereof;
provided,
however,
that
after giving effect to any such Permitted Investments pursuant to clauses
(e) (ii)
and
(iii)
above,
Availability shall not be less than $25,000,000 and the Parent shall have
delivered to the Administrative Agent a Compliance Certificate and Projections
demonstrating that Borrowers shall have Availability of at least $25,000,000
at
all times for the 2 Fiscal Quarters immediately succeeding such Permitted
Investments, (f) Investments in The Bombay Furniture Company, Inc. in an amount
not to exceed $5,000,000 in any Fiscal Year; (g) Investments the net aggregate
book value of which does not at any time exceed the amount of $1,000,000 and
(h)
so long as the U.S. Revolving Credit Outstandings and Canadian Revolving Credit
Outstandings are equal to $0, investments in (i) commercial notes and bonds
or
variable rate demand notes, issued by any commercial institution with a rating
of not less than A, as determined by S&P or Moody’s, (ii) Eurodollar
deposits, and (iii) money market or other mutual funds substantially all of
whose assets comprise securities of the types described in the definition of
“Cash Equivalents” or clause
(h)
hereof;
provided,
that
notwithstanding the foregoing, no such Investments shall be permitted (i) after
the occurrence of a Default or Event of Default, and (ii) unless such
Investments are pledged to the Administrative Agent as additional Collateral
for
the Obligations pursuant to such agreements as may be required by the
Administrative Agent in its Permitted Discretion.
25
“Permitted
Liens”
means
(a) Liens held by the Administrative Agent or Canadian Agent for the benefit
of
the Administrative Agent, the Canadian Agent and Lenders, as applicable
(b) Liens for unpaid taxes that either (i) are not yet delinquent, or
(ii) do not constitute an Event of Default hereunder and are the subject of
Permitted Protests, (c) Liens set forth on Schedule
7.2,
(d) the
interests of lessors under operating leases, (e) purchase money Liens or the
interests of lessors under Capital Leases to the extent that such Liens or
interests secure Permitted Purchase Money Indebtedness and so long as such
Lien
attaches only to the asset purchased or acquired and the proceeds thereof,
(f)
Liens arising by operation of law including those in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred
in
the ordinary course of the Borrowers’ business and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests, (g) Liens
arising from deposits made in connection with obtaining worker’s compensation or
other unemployment insurance, (h) Liens or deposits to secure performance of
bids, tenders, or leases incurred in the ordinary course of business and not
in
connection with the borrowing of money, (i) Liens granted as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (j) Liens resulting from any judgment or award that is not an
Event
of Default hereunder, (k) with respect to any Real Property, easements, rights
of way, minor encroachments, and zoning restrictions that do not materially
interfere with or impair the use or operation thereof, (l) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment
of
customs duties in connection with the importation of goods, (m) Liens resulting
from the filing of precautionary UCC financing statements, PPSA registration
statements or registrations in Quebec, Canada relating to operating leases
of
any Loan Party which are entered into in the ordinary course of business and
which are limited solely to the assets subject thereto, and (n) Liens securing
Permitted Office Building Indebtedness so long as such Lien attaches only to
the
Bombay Office Complex and the proceeds thereof (including insurance proceeds)
and Liens on money placed in an escrow account in connection with sale leaseback
transactions permitted by Section
7.5.
“Permitted
Office Building Indebtedness”
means,
following the release of the Eligible Real Property in accordance with
Section
6.19,
Indebtedness incurred by a U.S. Borrower or any of its Subsidiaries in an
aggregate principal amount at any time outstanding not to exceed 90% of the
appraised value (based upon an independent third-party appraisal) of the portion
of the Bombay Office Complex securing such Indebtedness on terms reasonably
acceptable to the Administrative Agent.
“Permitted
Protest”
means
the right of Parent or any of its Subsidiaries, as applicable, to protest any
Lien (other than any such Lien that secures the Obligations), taxes (other
than
payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment; provided
that (a)
a reserve with respect to such obligation is established on the Books in such
amount as is required under GAAP, (b) any such protest is instituted promptly
and prosecuted diligently by Parent or any of its Subsidiaries, as applicable,
in good faith, and (c) the Administrative Agent is satisfied that, while any
such protest is pending, there will be no impairment of the enforceability,
validity, perfection or priority of any of the Administrative Agent’s
Liens.
26
“Permitted
Purchase Money Indebtedness”
means,
as of any date of determination, Purchase Money Indebtedness incurred after
the
Closing Date in an aggregate amount outstanding at any one time not in excess
of
$2,000,000. In no event shall Permitted Purchase Money Indebtedness include
Indebtedness incurred for the purpose of financing all or any part of the
acquisition Cost of any inventory.
“Person”
means
any individual, partnership, corporation (including a business trust and a
public benefit corporation), joint stock company, estate, association, firm,
enterprise, trust, limited liability company, unincorporated association, joint
venture and any other entity or Governmental Authority.
“PPSA”
means
the Personal Property Security Act (Ontario), or, where the context requires,
the legislation of other provinces or territories in Canada relating to security
in personal property generally, including Accounts and inventory, as adopted
by
and in effect from time to time in such provinces or territories in Canada,
as
applicable.
“Projections”
means,
collectively, the Initial Projections and any document delivered pursuant to
Section 5.3(c).
“Property
Loss Event”
means,
with respect to any property, any loss of or damage to such property or any
taking of such property or condemnation thereof.
“Pro
Rata Outstandings”,
of any
Lender at any time, means the sum of (i) the outstanding principal amount of
Revolving Loans owing to such Lender and (ii) the amount of the participation
of
such Lender in the L/C Obligations outstanding with respect to all Letters
of
Credit.
“Pro
Rata Share”
means,
with respect to any Lender and any Facility or Facilities at any time, the
percentage obtained by dividing (a) the sum of the Commitments (or, if such
Commitments in any such Facility are terminated, the Pro Rata Outstandings
therein) of such Lender then in effect under such Facilities by (b) the sum
of
the Commitments (or, if such Commitments in any such Facility are terminated,
the Pro Rata Outstandings therein) of all Lenders then in effect under such
Facilities; provided,
however,
that,
if there are no Commitments and no Pro Rata Outstandings in any of such
Facilities, such Lender’s Pro Rata Share in such Facilities shall be determined
based on the Pro Rata Share in such Facilities most recently in effect, after
giving effect to any subsequent assignment and any subsequent non-pro rata
payments of any Lender pursuant to Section 2.18.
“Purchase
Money Indebtedness”
means
Indebtedness (other than the Obligations, but including obligations in respect
of Capital Leases), incurred at the time of, or within 20 days after, the
acquisition of any fixed assets, including, without limitation, software, for
the purpose of financing all or any part of the acquisition cost thereof,
together with any refinancings thereof under Section
7.1(c).
27
“Qualified
Import Letter of Credit”
means
a
Letter of Credit that (a) is issued to facilitate the purchase by a U.S.
Borrower of Eligible Inventory, (b) is in form and substance acceptable to
the
Administrative Agent, and (c) is issued to support an Underlying Letter of
Credit that only is drawable by the beneficiary thereof by the presentation
of,
among other documents, a negotiable document of title that (x) is in the name
of
the Administrative Agent, a U.S. Borrower or an Approved Customs Broker and
has
not been consigned to any third parties other than to the Administrative Agent,
a U.S. Borrower or an Approved Customs Broker (either directly or by means
of
endorsements), and (y) was issued by the carrier or consolidator respecting
the
subject inventory.
“Real
Property”
means
any estates or interests in real property now owned or hereafter acquired by
any
Borrower or a Subsidiary of any Borrower and the improvements
thereto.
“Record”
means
information that is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in perceivable form.
“Register”
has
the
meaning specified in Section 2.14(b).
“Related
Person”
means,
with respect to any Person, each Affiliate of such Person and each director,
officer, employee, consultant, agent, trustee, representative, attorney,
accountant and each insurance, environmental, legal, financial and other advisor
(including those retained in connection with the satisfaction or attempted
satisfaction of any condition set forth in Article III)
of or
to such Person or any of its Affiliates, together with, if such Person is the
Administrative Agent, each other Person or individual designated, nominated
or
otherwise mandated by or helping the Administrative Agent pursuant to and in
accordance with Section 9.4
or any
comparable provision of any Loan Document.
“Related
Transactions”
means
the refinancing of the Existing Credit Agreement and the payment of all related
fees, costs and expenses.
“Remedial
Action”
means
all actions taken to (a) clean up, remove, remediate, contain, treat, monitor,
assess, evaluate, or in any way address Hazardous Materials in the indoor or
outdoor environment, (b) prevent or minimize a release or threatened release
of
Hazardous Materials so they do not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment, (c) perform
any
pre-remedial studies, investigations, or post-remedial operation and maintenance
activities, or (d) conduct any other actions authorized by 42 USC
§9601.
“Required
Lenders”
means,
at any time, Lenders having at such time in excess of 50% of the sum of the
aggregate Revolving Credit Commitments (or, if such Commitments are terminated,
the sum of the amounts of the participations in Swing Loans, the principal
amount of unparticipated portions of the Swing Loans and the Pro Rata
Outstandings in the Facilities) then in effect, ignoring, in such calculation,
the amounts held by any Non-Funding Lender.
“Requirements
of Law”
means,
with respect to any Person, collectively, the common law and all federal, state,
provincial, local, foreign, multinational or international laws, statutes,
codes, treaties, standards, rules and regulations, guidelines, ordinances,
orders, judgments, writs, injunctions, decrees (including administrative or
judicial precedents or authorities) and the interpretation or administration
thereof by, and other determinations, directives, requirements or requests
of,
any Governmental Authority, in each case whether or not having the force of
law
and that are applicable to or binding upon such Person or any of its property
or
to which such Person or any of its property is subject.
28
“Reserves”
means
such reserves as the Administrative Agent, from time to time determines in
its
Permitted Discretion as being appropriate to reflect impediments to the Secured
Parties’ ability to realize upon the Collateral, including, without limitation
Canadian Priority Payables and Inventory Reserves.
“Responsible
Officer”
means,
with respect to any Person, any of the president, chief executive officer,
chief
financial officer, treasurer, assistant treasurer, controller, managing member
or general partner of such Person but, in any event, with respect to financial
matters, any such officer that is responsible for preparing the Financial
Statements delivered hereunder and, with respect to the Corporate Chart and
other documents delivered pursuant to Section 5.3(h),
documents delivered on the Closing Date and documents delivered pursuant to
Section 6.10,
the
secretary or assistant secretary of such Person or any other officer responsible
for maintaining the corporate and similar records of such Person.
“Revolving
Credit Commitment”
means
the U.S. Revolving Credit Commitment and/or the Canadian Revolving Credit
Agreement, as the case may be.
“Revolving
Credit Termination Date”
shall
mean the earliest of (a) the Scheduled Maturity Date, (b) the date of
termination of the Revolving Credit Commitments pursuant to Section 2.5
or
8.2 and
(c)
the date on which the Obligations become due and payable pursuant to
Section 8.2.
“Revolving
Loan”
means
the U.S. Revolving Loan and/or the Canadian Revolving Loan, as the case may
be.
“S&P”
means
Standard & Poor’s Rating Services, or its successor.
“Seasonal
Period”
means
the period commencing on September 1 through and including December 15 of each
Fiscal Year.
“Scheduled
Maturity Date”
means
the 5th
anniversary of the Closing Date.
“SEC”
means
the United States Securities and Exchange Commission and any successor
thereto.
“Secured
Parties”
means
the Lenders, the L/C Issuers, the Administrative Agent, each other Indemnitee
and any other holder of any Obligation of any Loan Party.
“Security”
means
all Stock, Stock Equivalents, voting trust certificates, bonds, debentures,
instruments and other evidence of Indebtedness, whether or not secured,
convertible or subordinated, all certificates of interest, share or
participation in, all certificates for the acquisition of, and all warrants,
options and other rights to acquire, any Security.
“Sell”
means,
with respect to any property, to sell, convey, transfer, assign, license, lease
or otherwise dispose of, any interest therein or to permit any Person to acquire
any such interest, including, in each case, through a sale and leaseback
transaction or through a sale, factoring at maturity, collection of or other
disposal, with or without recourse, of any notes or accounts receivable.
Conjugated forms thereof and the noun “Sale”
have
correlative meanings.
29
“Solvent”
means,
with respect to any Person (a) as of any date of determination, that, as of
such
date, (i) the value of the assets of such Person (both at fair value and present
fair saleable value) is greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person, and (ii) such Person
is
able to pay all liabilities of such Person as such liabilities mature and (b)
that, as of the Closing Date, such Person does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities
at
any time, such liabilities shall be computed at the amount that, in light of
all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured
liability.
“Standby
Letter of Credit”
means
any Letter of Credit that is not a Documentary Letter of Credit.
“Stock”
means
all shares of capital stock (whether denominated as common stock or preferred
stock), equity interests, beneficial, partnership or membership interests,
joint
venture interests, participations or other ownership or profit interests in
or
equivalents (regardless of how designated) of or in a Person (other than an
individual), whether voting or non-voting.
“Stock
Equivalents”
means
all securities convertible into or exchangeable for Stock or any other Stock
Equivalent and all warrants, options or other rights to purchase, subscribe
for
or otherwise acquire any Stock or any other Stock Equivalent, whether or not
presently convertible, exchangeable or exercisable.
“Store
Accounts”
means
an account designated as such on Schedule
8
of the
Perfection Certificate.
“Subsidiary”
means,
with respect to any Person, any corporation, partnership, joint venture, limited
liability company, association or other entity, the management of which is,
directly or indirectly, controlled by, or of which an aggregate of more than
50%
of the outstanding Voting Stock is, at the time, owned or controlled directly
or
indirectly by, such Person or one or more Subsidiaries of such
Person.
“Substitute
Lender”
has
the
meaning specified in Section 2.18(b).
“Swingline
Commitment”
means
$15,000,000.
“Swingline
Lender”
means,
each in its capacity as Swingline Lender hereunder, GE Capital or, upon the
resignation of GE Capital as the Administrative Agent hereunder, any U.S. Lender
(or Affiliate or Approved Fund of any U.S. Lender) that agrees, with the
approval of the Administrative Agent (or, if there is no such successor the
Administrative Agent, the Required Lenders) and the Parent, to act as the
Swingline Lender hereunder.
“Swingline
Request”
has
the
meaning specified in Section 2.3A(b).
“Swing
Loan”
has
the
meaning specified in Section 2.3A(a).
30
“Synthetic
Lease”
means
any lease of goods or other property, whether real or personal, which is treated
as an operating lease under GAAP and as a loan or financing for United States
income tax purposes.
“Taxes”
has
the
meaning specified in Section 2.17.
“Title
IV Plan”
means
a
pension plan subject to Title IV of ERISA, other than a Multiemployer Plan,
to
which any ERISA Affiliate incurs or otherwise has any obligation or liability,
contingent or otherwise.
“Trademarks”
means
all rights, title and interests (and all related IP Ancillary Rights) arising
under any Requirement of Law in or relating to trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade
styles, service marks, logos and other source or business identifiers and,
in
each case, all goodwill associated therewith, all registrations and recordations
thereof and all applications in connection therewith.
“Trade
Secrets”
means
all right, title and interest (and all related IP Ancillary Rights) arising
under any Requirement of Law in or relating to trade secrets.
“UCC”
means
the Uniform Commercial Code of any applicable jurisdiction and, if the
applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform
Commercial Code as in effect in the State of New York.
“Underlying
Issuer”
means
a
third Person which is the beneficiary of an L/C Undertaking and which has issued
a letter of credit at the request of the L/C Issuer for the account of any
U.S.
Borrowers, and in the case of a proposed Qualified Import Letter of Credit,
has
agreed, in writing, to hold documents of title as agent for the Administrative
Agent.
“Underlying
Letter of Credit”
means
a
letter of credit that has been issued by an Underlying Issuer.
“United
States”
means
the United States of America.
“Unused
Commitment Fee”
has
the
meaning specified in Section 2.11.
“U.S.
Borrowers”
means
Borrowers other than Bombay Canada.
“U.S.
Borrowing Base”
means,
as of any date of determination, an amount equal to:
(a) 92.5%
of
the Net Retail Liquidation Value of Eligible Inventory owned by the U.S.
Borrowers; provided,
however,
that
during the Seasonal Period, the advance rate shall be of 97.5% of the Net
Retail Liquidation Value of Eligible Inventory owned by the U.S. Borrowers,
plus
(b) 90%
of
the face amount of Eligible Accounts of the U.S. Borrower, plus
(c) 90%
of
the face amount of Eligible Credit Card Receivables of the U.S. Borrowers,
plus
(d) 75
% of
the Appraised Value of Eligible Real Property of the U.S. Borrowers,
minus
(e) the
aggregate of such Reserves as may have been established by the Administrative
Agent.
31
“U.S.
Eligible In-Transit Inventory”
means
inventory of the U.S. Borrowers that does not qualify as Eligible Inventory
under clause
(b)
of the
definition of Eligible Inventory solely because it is not at a location in
the
United States set forth on Schedule
4(b)
of the
Perfection Certificate or in transit among such locations in the United States
and that meets the following criteria, which criteria may be revised by the
Administrative Agent in its Permitted Discretion from time to time after the
Closing Date:
(a) the
inventory was the subject of a Qualified Import Letter of Credit, or was paid
for in full by a U.S. Borrower;
(b) such
inventory currently is in transit (whether by vessel, air, or land) to a
location set forth on Schedule
4(b)
of the
Perfection Certificate
in the
United States that is the subject of a Bailee Acknowledgment or a Collateral
Access Agreement;
(c) title
to
such inventory has passed to the applicable U.S. Borrower;
(d) such
inventory is insured against types of loss, damage, hazards, and risks, and
in
amounts, satisfactory to the Administrative Agent in its Permitted
Discretion;
(e) the
Parent has provided a certificate to the Administrative Agent that certifies
that, to the best knowledge of the Borrowers, such inventory meets all of the
Borrowers’ representations and warranties contained in the Loan Documents
concerning Eligible Inventory, that the Borrowers know of no reason why such
inventory would not be accepted by the applicable Borrower when it arrives
in
the United States, and that the shipment as evidenced by the documents conforms
to the related order documents; and
(f) if
subject to a Qualified Import Letter of Credit, the Underlying Letter of Credit
has been drawn upon and the Underlying Issuer has honored such drawing and
the
Administrative Agent has honored its obligations to the Underlying Issuer under
the applicable Qualified Import Letter of Credit.
“U.S.
Lender”
means
each Lender that has a U.S. Revolving Credit Commitment, holds a U.S. Revolving
Loan or participates in any Swing Loan or Letter of Credit.
“U.S.
Lender Party”
means
each of the Administrative Agent, each Lender, each L/C Issuer and each
participant, in each case that is a Domestic Person.
“U.S.
Non-Funding Lender”
has
the
meaning specified in Section 2.2A(c).
“U.S.
Revolving Credit Commitment”
means,
with respect to each U.S. Lender, the commitment of such Lender to make U.S.
Revolving Loans and acquire interests in other U.S. Revolving Credit
Outstandings, which commitment is in the amount set forth opposite such U.S.
Lender’s name on Schedule I
under
the caption “U.S.
Revolving Credit Commitment”,
as
amended to reflect Assignments and as such amount may be reduced pursuant to
this Agreement. The aggregate amount of the U.S. Revolving Credit Commitments
on
the date hereof equals $125,000,000.
32
“U.S.
Revolving Credit Facility”
means
the U.S. Revolving Credit Commitments and the provisions herein related to
the
U.S. Revolving Loans, Swing Loans and Letters of Credit.
“U.S.
Revolving Credit Outstandings”
means,
at any time, the sum of, in each case to the extent outstanding at such time,
(a) the aggregate principal amount of the U.S. Revolving Loans and Swing Loans
and (b) the L/C Obligations for all Letters of Credit.
“U.S.
Revolving Loan”
has
the
meaning specified in Section 2.1A(a).
“Voting
Stock”
means
Stock of any Person having ordinary power to vote in the election of members
of
the board of directors, managers, trustees or other controlling Persons, of
such
Person (irrespective of whether, at the time, Stock of any other class or
classes of such entity shall have or might have voting power by reason of the
occurrence of any contingency).
“Wholesale”
means
Bombay International, Inc.
“Wholly
Owned Subsidiary”
of
any
Person means any Subsidiary of such Person, all of the Stock of which (other
than nominal holdings and director’s qualifying shares) is owned by such Person,
either directly or through one or more Wholly Owned Subsidiaries of such
Person.
Section 1.2 UCC
Terms.
The
following terms have the meanings given to them in the applicable UCC:
“commodity
account”,
“commodity
contract”,
“commodity
intermediary”,
“deposit
account”,
“entitlement
holder”,
“entitlement
order”,
“equipment”,
“financial
asset”,
“general
intangible”,
“goods”,
“instruments”,
“inventory”,
“securities
account”,
“securities
intermediary”,
“security
entitlement”
and
“supporting
obligations”.
Section 1.3 Accounting
Terms and Principles.
(a) GAAP.
If any
change in any accounting practice is required by GAAP (or any successor of
the
foregoing) in order for such principle or practice to continue as a generally
accepted accounting principle or practice, all reports and financial statements
required hereunder or in connection herewith may be prepared in accordance
with
such change, but all calculations and determinations to be made hereunder may
be
made in accordance with such change only after notice of such change is given
to
each Lender, and the Borrowers, the Required Lenders and the Administrative
Agent agree to such change. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP applied on a consistent basis by
the
accounting entity to which they refer. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Borrowers” or the term “Parent” is used in respect of a financial covenant or a
related definition, it shall be understood to mean Parent and its Subsidiaries
on a consolidated basis unless the context clearly requires otherwise. Unless
otherwise expressly provided herein or unless Required Lenders otherwise
consent, all financial statements and reports furnished to any Agent or any
Lender hereunder shall be prepared, all financial computations and
determinations pursuant hereto shall be made, and all terms of an accounting
or
financial nature shall be construed, in accordance with GAAP.
33
(b) Permitted
Acquisitions.
Notwithstanding anything to the contrary contained herein, the assets of any
Person acquired in a Permitted Acquisition shall not be included in the
Borrowing Base unless such Person shall comply with its obligations under
Section
6.11,
as
applicable, and the Administrative Agent shall have received an appraisal and
audit in form and substance satisfactory to it.
Section 1.4 Interpretation.
(a) Certain
Terms.
Except
as set forth in any Loan Document, all accounting terms not specifically defined
herein shall be construed in accordance with GAAP. The terms “herein”,
“hereof”
and
similar terms refer to this Agreement as a whole. In the computation of periods
of time from a specified date to a later specified date in any Loan Document,
the terms “from”
means
“from and including” and the words “to”
and
“until”
each
mean “to but excluding” and the word “through”
means
“to and including.” In any other case, the term “including”
when
used in any Loan Document means “including without limitation.” The term
“documents”
means
all writings, however evidenced and whether in physical or electronic form,
including all documents, instruments, agreements, notices, demands,
certificates, forms, financial statements, opinions and reports. The term
“incur”
means
incur, create, make, issue, assume or otherwise become directly or indirectly
liable in respect of or responsible for, in each case whether directly or
indirectly, and the terms “incurrence” and “incurred” and similar derivatives
shall have correlative meanings.
(b) Certain
References.
Unless
otherwise expressly indicated, references (i) in this Agreement to an
Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit
or Schedule to, or Article, Section or clause in, this Agreement and (ii) in
any
Loan Document, to (A) any agreement shall include, without limitation, all
exhibits, schedules, appendixes and annexes to such agreement and, unless the
prior consent of any Secured Party required therefor is not obtained, any
amendment, restatement, amendment and restatement or other modification of
such
agreement, (B) any statute shall be to such statute as amended or otherwise
modified from time to time and to any successor legislation thereto, in each
case as in effect at the time any such reference is operative and (C) any
time of day shall be a reference to New York time. Titles of articles, sections,
clauses, exhibits, schedules and annexes contained in any Loan Document are
without substantive meaning or content of any kind whatsoever and are not a
part
of the agreement between the parties hereto. Unless otherwise expressly
indicated, the meaning of any term defined (including by reference) in any
Loan
Document shall be equally applicable to both the singular and plural forms
of
such term.
ARTICLE
II
THE
FACILITIES
Section 2.1 Revolving
Credit Commitments.
Section
2.1A U.S.
Revolver Loans.
(a) On
the terms and subject to the conditions contained in this Agreement, each U.S.
Lender severally, but not jointly, agrees to make loans in Dollars (each a
“U.S.
Revolving Loan”)
to the
U.S. Borrowers from time to time on any Business Day during the period from
the
date hereof until the Revolving Credit Termination Date in an aggregate
principal amount at any time outstanding for all such Loans by such U.S. Lender
not to exceed such U.S. Lender’s Pro Rata Share of an amount equal to the lesser
of (i) the Maximum Revolver Amount, minus the sum of (x) U.S. Revolving Credit
Outstandings, (y) Canadian Revolving Credit Outstandings, and (z) the Minimum
Availability Amount or (ii) except for Overadvances, the U.S. Borrowing Base
less U.S. Revolving Credit Outstandings less the Minimum Availability Amount.
Within the limits set forth in the first sentence of this clause
(a),
amounts
of U.S. Revolving Loans repaid may be reborrowed under this Section
2.1A.
34
(b)
Anything to the contrary in this Section
2.1A
notwithstanding, the Administrative Agent shall have the right without declaring
an Event of Default, to reduce its inventory advance rates or establish Reserves
in such amounts, and with respect to such matters, as the Administrative Agent
in its Permitted Discretion shall deem necessary or appropriate, against the
U.S. Borrowing Base, including Reserves with respect to (i) sums that the U.S.
Borrowers are required to pay (such as taxes, assessments, insurance premiums,
or, in the case of leased assets, rents or other amounts payable under such
leases) and has failed to pay under any Section of this Agreement or any other
Loan Document, (ii) amounts as determined by the Administrative Agent in its
Permitted Discretion based on noncompliance with the covenants set forth in
Articles
6 and 7
(without
duplication as to the Canadian Borrowing Base), and (iii) amounts owing by
the
U.S. Borrowers or their Subsidiaries to any Person to the extent secured by
a
Lien on, or trust over, any of the Collateral (other than any existing Permitted
Lien set forth on Schedule
7.2
which is
specifically identified thereon as entitled to have priority over the
Administrative Agent’s Liens), which Lien or trust, in the Permitted Discretion
of the Administrative Agent likely would have a priority superior to the
Administrative Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral.
(c)
Anything in this Agreement to the contrary notwithstanding, in its discretion
the Administrative Agent may (or may authorize the Swingline Lender to) or
may
cause the Canadian Agent or the Canadian Swingline Lender to, but shall have
absolutely no obligation to, make Loans to the U.S. Borrowers on behalf of
U.S.
Lenders or to Bombay Canada on behalf of the Canadian Lenders in amounts that
cause the U.S. Revolving Credit Outstandings to exceed the U.S. Borrowing Base
less the Minimum Availability Amount or the Canadian Revolving Credit
Outstandings to exceed the Canadian Borrowing Base (any such excess Revolving
Loans are herein referred to collectively as “Overadvances”);
provided,
that
(i) no such event or occurrence shall cause or constitute a waiver of the
Administrative Agent’s, the Swingline Lender’s, U.S. Lenders’, the Canadian
Agent’s or the Canadian Lenders’ right to refuse to make any further
Overadvances, Swing Loans, U.S. Revolving Loans, Canadian Revolving Loans or
Canadian Swing Loans, or incur any L/C Obligations, as the case may be, at
any
time that an Overadvance exists, and (ii) no Overadvance shall result in a
Default or Event of Default based on the Borrowers’ failure to comply with
Section
2.8(b)
for so
long as the Administrative Agent permits such Overadvance to be outstanding,
but
solely with respect to the amount of such Overadvance. In addition, Overadvances
may be made even if the conditions to lending set forth in Section
3.2
have not
been met. All Overadvances shall constitute Base Rate Loans, shall bear interest
at the rate set forth in Section
2.9(c)
and
shall be payable on the earlier of demand or the Revolving Credit Termination
Date. The authority of the Administrative Agent to make, or to cause the
Canadian Agent, the Swingline Lender or the Canadian Swingline Lender to make,
Overadvances is limited to an aggregate amount not to exceed ten percent (10%)
of the Aggregate Borrowing Base (exclusive of amounts charged to the Loans
for
interest, fees or expenses due to the Agents, the Lenders or the L/C Issuer
or
any Indemnified Person under the terms of this Agreement) and shall not cause
the aggregate U.S. Revolving Credit Outstandings and the Canadian Revolving
Credit Outstandings to exceed the Maximum Revolver Amount less the Minimum
Availability Amount. In the event that the Administrative Agent or Swingline
Lender makes an Overadvance to the U.S. Borrowers or the Canadian Agent or
the
Canadian Swingline Lender makes an Overadvance to Bombay Canada, irrespective
of
whether the conditions to lending set forth in Section
3.2
have
been met, the U.S. Lenders and/or the Canadian Lenders, as the case may be,
agree to reimburse the Administrative Agent or the Canadian Agent, as
applicable, or to purchase a participation therein, in accordance with such
Lender’s Pro Rata Share of the Overadvance as if such Overadvance were a Swing
Loan or Canadian Swing Loan.
35
Section
2.1B Canadian
Revolver Loans.
(a) On
the terms and subject to the conditions contained in this Agreement, each
Canadian Lender severally, but not jointly, agrees to make loans in Dollars
(each a “Canadian
Revolving Loan”)
to
Bombay Canada from time to time on any Business Day during the period from
the
date hereof until the Revolving Credit Termination Date in an aggregate
principal amount at any time outstanding for all such Loans by such Canadian
Lender not to exceed an amount equal to the lesser of (i) the Maximum Canadian
Revolver Amount less Canadian Revolving Credit Outstandings, or (ii) the
Canadian Borrowing Base less Canadian Revolving Credit Outstandings or (iii)
the
Maximum Revolver Amount minus the sum of U.S. Revolving Credit Outstandings,
Canadian Revolving Credit Outstandings and the Minimum Availability Amount.
Within the limits set forth in the first sentence of this clause
(a),
amounts
of Canadian Revolving Loans repaid may be reborrowed under this Section
2.1B.
(b)
Anything to the contrary in this Section
2.1B
notwithstanding, the Administrative Agent shall have the right without declaring
an Event of Default, to reduce its inventory advance rates or establish Reserves
in such amounts, and with respect to such matters, as the Administrative Agent
in its Permitted Discretion shall deem necessary or appropriate, against the
Canadian Borrowing Base, including Reserves with respect to (i) sums that Bombay
Canada is required to pay (such as taxes, assessments, insurance premiums,
or,
in the case of leased assets, rents or other amounts payable under such leases)
and has failed to pay under any Section of this Agreement or any other Loan
Document, (ii) amounts as determined by the Administrative Agent in its
Permitted Discretion based on noncompliance with the covenants set forth in
Articles
6 and 7
(without
duplication as to the U.S. Borrowing Base), and (iii) Canadian Priority
Payables, and (iv) amounts owing by Bombay Canada to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than any
existing Permitted Lien set forth on Schedule
7.2
which is
specifically identified thereon as entitled to have priority over the
Administrative Agent’s Liens), which Lien or trust, in the Permitted Discretion
of the Administrative Agent likely would have a priority superior to the
Administrative Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral.
Section 2.2 Borrowing
Procedures
Section
2.2A U.S.
Borrowing Procedures.
(a) Notice
From the U.S. Borrower.
Each
Borrowing of a U.S. Revolving Loan shall be made on notice given by the Parent
to the Administrative Agent not later than 1:00 p.m. on (i) the date of the
proposed Borrowing if such date is a Business Day (or the next succeeding
Business Day if such date is not a Business Day), in the case of a Borrowing
of
Base Rate Loans and (ii) the third Business Day prior to the date of the
proposed Borrowing, in the case of a Borrowing of Eurodollar Rate Loans. Each
such notice may be made in a writing substantially in the form of Exhibit
C
(a
“Notice
of Borrowing”)
duly
completed or by telephone if confirmed promptly, but in any event within one
Business Day and prior to such Borrowing, with such a Notice of Borrowing.
Loans
shall be made as Base Rate Loans unless, outside of a suspension period pursuant
to Section
2.15,
the
Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar
Rate Loans. Each Borrowing of Eurodollar Rate Loans shall be in an aggregate
amount that is an integral multiple of $1,000,000.
36
(b) Notice
to Each U.S. Lender.
The
Administrative Agent shall give to each U.S. Lender prompt notice of the
Administrative Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate
Loans are properly requested in such Notice of Borrowing, prompt notice of
the
applicable interest rate. Each U.S. Lender shall, before 2:00 p.m. on the date
of the proposed Borrowing, make available to the Administrative Agent at its
address referred to in Section
10.11,
such
U.S. Lender’s Pro Rata Share of such proposed Borrowing. Upon fulfillment or due
waiver (i) on the Closing Date, of the applicable conditions set forth in
Section
3.1
and (ii)
on the Closing Date and any time thereafter, of the applicable conditions set
forth in Section
3.2,
the
Administrative Agent shall make such funds available to the U.S.
Borrower.
(c) Non-Funding
Lenders.
Unless
the Administrative Agent shall have received notice from any U.S. Lender prior
to the date such U.S. Lender is required to make any payment hereunder with
respect to any U.S. Revolving Loan or any participation in any Swing Loan or
Letter of Credit that such U.S. Lender will not make such payment (or any
portion thereof) available to the Administrative Agent, the Administrative
Agent
may assume that such U.S. Lender has made such payment available to the
Administrative Agent on the date such payment is required to be made in
accordance with this Article
II
and the
Administrative Agent may, in reliance upon such assumption, make available
to
the U.S. Borrower on such date a corresponding amount. The U.S. Borrower agrees
to repay to the Administrative Agent on demand such amount (until repaid by
such
U.S. Lender) with interest thereon for each day from the date such amount is
made available to the U.S. Borrower until the date such amount is repaid to
the
Administrative Agent, at the interest rate applicable to the Obligation that
would have been created when the Administrative Agent made available such amount
to the U.S. Borrower had such U.S. Lender made a corresponding payment
available; provided,
however,
that
such payment shall not relieve such U.S. Lender of any obligation it may have
to
the U.S. Borrower, the Swingline Lender or any L/C Issuer and any payment by
the
U.S. Borrower shall be without prejudice to any claim the U.S. Borrower may
have
against a U.S. Non-Funding Lender (as defined below). In addition, any U.S.
Lender that shall not have made available to the Administrative Agent any
portion of any payment described above (any such U.S. Lender, a “U.S.
Non-Funding Lender”)
agrees
to pay such amount to the Administrative Agent on demand together with interest
thereon, for each day from the date such amount is made available to the U.S.
Borrower until the date such amount is repaid to the Administrative Agent,
at
the Federal Funds Rate for the first Business Day and thereafter (i) in the
case
of a payment in respect of a U.S. Revolving Loan, at the interest rate
applicable at the time to such U.S. Revolving Loan and (ii) otherwise, at the
interest rate applicable to Base Rate Loans under the U.S. Revolving Credit
Facility. Such repayment shall then constitute the funding of the corresponding
Loan (including any Loan deemed to have been made hereunder with such payment)
or participation. The existence of any U.S. Non-Funding Lender shall not relieve
any other U.S. Lender of its obligations under any Loan Document, but no other
U.S. Lender shall be responsible for the failure of any U.S. Non-Funding Lender
to make any payment required under any Loan Document. If the U.S. Borrower
and
such U.S. Non-Funding Lender shall pay such interest to the Administrative
Agent
for the same or an overlapping period, the Administrative Agent shall promptly
remit to the U.S. Borrower the amount of any excess paid by the U.S. Borrower
for such period.
37
(d) Joint
and Several Liability.
(i) Notwithstanding
any provision to the contrary in any Loan Document, all Obligations of the
U.S.
Borrowers under this Agreement are joint and several Obligations of the U.S.
Borrowers in consideration of the financial accommodations to be provided by
the
Administrative Agent and Lenders under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower (including Bombay Canada) and in
consideration of the undertakings of the other U.S. Borrowers to accept joint
and several liability for the Obligations.
(ii) Each
U.S.
Borrower, jointly and severally, hereby irrevocably and unconditionally accepts,
not merely as a surety but also as a co-debtor, joint and several liability
with
the other U.S. Borrowers, with respect to the payment and performance of all
of
the Obligations (including, without limitation, any Obligations arising under
this Section 2.2(A)(d)),
it
being the intention of U.S. Borrowers that all the Obligations (including those
of Bombay Canada) shall be the joint and several obligations of U.S. Borrowers
without preferences or distinction among them.
(iii) If
and to
the extent that any of Borrowers shall fail to make any payment with respect
to
any of the Obligations as and when due or to perform any of the Obligations
in
accordance with the terms thereof, then in each such event, the other U.S.
Borrowers will make such payment with respect to, or perform, such
Obligation.
(iv) The
provisions of Sections
2.2
through
Section
2.7
of the
Guaranty and Security Agreement are hereby incorporated except that Subsidiary
Guarantor shall mean U.S. Borrowers which are Subsidiaries of the Parents,
Guarantor shall refer to the U.S. Borrowers, Guaranteed Obligations shall refer
to the Obligations, and Guaranty shall refer to this Section
2.2(A)(d) mutatis
mutandis.
(v) The
provisions of this Section 2.2(A)(d)
are made
for the benefit of the Secured Parties, and assigns, and may be enforced by
it
or them from time to time against any or all U.S. Borrowers as often as occasion
therefore may arise and without requirement on the part of any such Secured
Parties first to marshal any of its or their claims or to exercise any of its
or
their rights against any of the other U.S. Borrowers or to exhaust any remedies
available to it or them against any of the other Borrowers or to resort to
any
other source or means of obtaining payment of any of the Obligations hereunder
or to elect any other remedy. The provisions of this Section 2.2(A)(d)
shall
remain in effect until all of the Obligations shall have been paid in full
or
otherwise fully satisfied. If at any time, any payment or any part thereof,
made
in respect of any of the Obligations, is rescinded or must otherwise be restored
or returned by Secured Party upon the insolvency, bankruptcy or reorganization
of any of Borrowers, or otherwise, the provisions of this Section 2.2(A)(d)
will
forthwith be reinstated in effect, as though such payment had not been
made.
38
(vi) Each
U.S.
Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against the Borrowers with respect to any liability
incurred by it hereunder or under any of the other Loan Documents, any payments
made by it to any Secured Party with respect to any of the Obligations or any
collateral security therefore until such time as all of the Obligations have
been paid in full in cash. Any claim which any Borrower may have against any
other Borrower with respect to any payments to any Secured Party hereunder
or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
(vii) Each
U.S.
Borrower hereby agrees that, after the occurrence and during the continuance
of
any Default or Event of Default, the payment of any amounts due with respect
to
the indebtedness owing by any Borrower to any other Borrower is hereby
subordinated to the prior payment in full in cash of the Obligations. Each
Borrower hereby agrees that after the occurrence and during the continuance
of
any Default or Event of Default, such Borrower will not demand, ▇▇▇ for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce
or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and
such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.3(b)
Section
2.2B Canadian
Borrowing Procedures.
(a) Notice
From Bombay Canada.
Each
Borrowing of a Canadian Revolving Loan shall be made on notice given by Bombay
Canada to the Canadian Agent, with a copy to the Administrative Agent, not
later
than 1:00 p.m. on (i) the date of the proposed Borrowing if such date is a
Business Day (or the next succeeding Business Day if such date is not a Business
Day), in the case of a Borrowing of Base Rate Loans and (ii) the third Business
Day prior to the date of the proposed Borrowing, in the case of a Borrowing
of
Eurodollar Rate Loans. Each such notice may be made in a written Notice of
Borrowing duly completed or by telephone if confirmed promptly, but in any
event
within one Business Day and prior to such Borrowing, with such a Notice of
Borrowing. Loans shall be made as Base Rate Loans unless, outside of a
suspension period pursuant to Section
2.15,
the
Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar
Rate Loans. Each Borrowing of Eurodollar Rate Loans shall be in an aggregate
amount that is an integral multiple of $1,000,000.
(b) Notice
to Each Canadian Lender.
The
Canadian Agent shall give to each Canadian Lender prompt notice of the Canadian
Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are
properly requested in such Notice of Borrowing, prompt notice of the applicable
interest rate. Each Canadian Lender shall, before 2:00 p.m. on the date of
the
proposed Borrowing, make available to the Canadian Agent at its address referred
to in Section
10.11,
such
Canadian Lender’s Pro Rata Share of such proposed Borrowing. Upon fulfillment or
due waiver (i) on the Closing Date, of the applicable conditions set forth
in
Section
3.1
and (ii)
on the Closing Date and any time thereafter, of the applicable conditions set
forth in Section
3.2,
the
Canadian Agent shall make such funds available to the Bombay
Canada.
39
(c) Non-Funding
Lenders.
Unless
the Canadian Agent shall have received notice from any Canadian Lender prior
to
the date such Canadian Lender is required to make any payment hereunder with
respect to any Canadian Revolving Loan or any participation in any Canadian
Swing Loan that such Canadian Lender will not make such payment (or any portion
thereof) available to the Canadian Agent, the Canadian Agent may assume that
such Canadian Lender has made such payment available to the Canadian Agent
on
the date such payment is required to be made in accordance with this
Article
II
and the
Canadian Agent may, in reliance upon such assumption, make available to Bombay
Canada on such date a corresponding amount. Bombay Canada agrees to repay to
the
Canadian Agent on demand such amount (until repaid by such Canadian Lender)
with
interest thereon for each day from the date such amount is made available to
Bombay Canada until the date such amount is repaid to the Canadian Agent, at
the
interest rate applicable to the Obligation that would have been created when
the
Canadian Agent made available such amount to Bombay Canada had such Canadian
Lender made a corresponding payment available; provided,
however,
that
such payment shall not relieve such Canadian Lender of any obligation it may
have to Bombay Canada or the Canadian Swingline Lender. In addition, any
Canadian Lender that shall not have made available to the Canadian Agent any
portion of any payment described above (any such Canadian Lender, a
“Canadian
Non-Funding Lender”)
agrees
to pay such amount to the Canadian Agent on demand together with interest
thereon, for each day from the date such amount is made available to Bombay
Canada until the date such amount is repaid to the Canadian Agent, at the
Federal Funds Rate for the first Business Day and thereafter (i) in the case
of
a payment in respect of a Canadian Revolving Loan, at the interest rate
applicable at the time to such Canadian Revolving Loan and (ii) otherwise,
at
the interest rate applicable to Base Rate Loans under the Canadian Revolving
Credit Facility. Such repayment shall then constitute the funding of the
corresponding Canadian Revolving Loan (including any Canadian Revolving Loan
deemed to have been made hereunder with such payment) or participation. The
existence of any Canadian Non-Funding Lender shall not relieve any other
Canadian Lender of its obligations under any Loan Document, but no other
Canadian Lender shall be responsible for the failure of any Canadian Non-Funding
Lender to make any payment required under any Loan Document.
(d) Separate
Obligations of Bombay Canada.
Notwithstanding any provision to the contrary in any Loan Document, (i) all
Obligations of Bombay Canada under this Agreement and the other Loan Documents
are separate and individual Obligations of Bombay Canada from the Obligations
of
the U.S. Borrowers, (ii) Bombay Canada shall not have any liabilities in respect
of U.S. Revolving Loans, Swing Loans or L/C Obligations made by the U.S. Lenders
to the U.S. Borrowers or in respect of any other Obligations, including without
limitation any indemnity liabilities or liabilities for costs or protective
advances, of the U.S. Borrowers to Agent or Lenders arising from or related
to
U.S. Revolving Loan, Swing Loans or L/C Obligations, and (iii) the assets of
Bombay Canada shall not serve at any time, directly or indirectly, as security
for the payment and performance of the Obligations of the U.S. Borrowers under
the Loan Documents.
40
Section 2.3 Swing
Loans.
Section
2.3A Swing
Loans
(a)
Availability.
On the
terms and subject to the conditions contained in this Agreement, the Swingline
Lender may, in its sole discretion, make loans in Dollars (each a “Swing
Loan”)
available to the U.S. Borrower under the U.S. Revolving Credit Facility from
time to time on any Business Day during the period from the date hereof until
the Revolving Credit Termination Date in an aggregate principal amount at any
time outstanding not to exceed its Swingline Commitment; provided,
however,
that
the Swingline Lender may not make any Swing Loan (i) to the extent that after
giving effect to such Swing Loan, the aggregate U.S. Revolving Credit
Outstandings would exceed the lesser of (x) aggregate U.S. Revolving Credit
Commitments minus the Minimum Availability Amount and (y) except for
Overadvances, the U.S. Borrowing Base minus the Minimum Availability Amount
and
(ii) in the period commencing on the first Business Day after it receives notice
from the Administrative Agent or the Required Lenders that one or more of the
conditions precedent contained in Section
3.2
are not
satisfied and ending when such conditions are satisfied or duly waived. In
connection with the making of any Swing Loan, the Swingline Lender may but
shall
not be required to determine that, or take notice whether, the conditions
precedent set forth in Section
3.2
have
been satisfied or waived. Each Swing Loan shall be a Base Rate Loan and must
be
repaid in full on the earliest of (i) the funding date of any Borrowing of
U.S.
Revolving Loans and (ii) the Revolving Credit Termination Date. Within the
limits set forth in the first sentence of this clause
(a),
amounts
of Swing Loans repaid may be reborrowed under this clause
(a).
(b) Borrowing
Procedures.
In order
to request a Swing Loan, the U.S. Borrowers shall give to the Administrative
Agent a notice to be received not later than 1:00 p.m. on the day of the
proposed borrowing, which may be made in a writing substantially in the form
of
Exhibit
D
duly
completed (a “Swingline
Request”)
or by
telephone if confirmed promptly but, in any event, prior to such borrowing,
with
such a Swingline Request. In addition, if any Notice of Borrowing requests
a
Borrowing of Base Rate Loans, the Swingline Lender may, notwithstanding anything
else to the contrary in Section
2.2A,
make a
Swing Loan available to the U.S. Borrowers in an aggregate amount not to exceed
such proposed Borrowing, and the aggregate amount of the corresponding proposed
Borrowing shall be reduced accordingly by the principal amount of such Swing
Loan. The Administrative Agent shall promptly notify the Swingline Lender of
the
details of the requested Swing Loan. Upon receipt of such notice and subject
to
the terms of this Agreement, the Swingline Lender may make a Swing Loan
available to the U.S. Borrowers by making the proceeds thereof available to
the
Administrative Agent and, in turn, the Administrative Agent shall make such
proceeds available to the U.S. Borrowers on the date set forth in the relevant
Swingline Request.
(c
) Refinancing
Swing Loans.
The
Swingline Lender may at any time forward a demand to the Administrative Agent
(which the Administrative Agent shall, upon receipt, forward to each U.S.
Lender) that each U.S. Lender pay to the Administrative Agent, for the account
of the Swingline Lender, such U.S. Lender’s Pro Rata Share of all or a portion
of the outstanding Swing Loans. Each U.S. Lender shall pay such Pro Rata Share
to the Administrative Agent for the account of the Swingline Lender. Upon
receipt by the Administrative Agent of such payment (other than during the
continuation of any Event of Default under Section
8.1(e)),
such
U.S. Lender shall be deemed to have made a U.S. Revolving Loan to the U.S.
Borrowers, which, upon receipt of such payment by the Swingline Lender from
the
Administrative Agent, the U.S. Borrowers shall be deemed to have used in whole
to refinance such Swing Loan. In addition, regardless of whether any such demand
is made, upon the occurrence of any Event of Default under Section
8.1(e),
each
U.S. Lender shall be deemed to have acquired, without recourse or warranty,
an
undivided interest and participation in each Swing Loan in an amount equal
to
such U.S. Lender’s Pro Rata Share of such Swing Loan. If any payment made by any
U.S. Lender as a result of any such demand is not deemed a U.S. Revolving Loan,
such payment shall be deemed a funding by such U.S. Lender of such
participation. Such participation shall not be otherwise required to be funded.
Upon receipt by the Swingline Lender as a U.S. Lender of any payment from any
U.S. Lender pursuant to this clause
(c)
with
respect to any portion of any Swing Loan, the Swingline Lender shall as a U.S.
Lender promptly pay over to such U.S. Lender all payments of principal (to
the
extent received after such payment by such U.S. Lender) and interest (to the
extent accrued with respect to periods after such payment) received by the
Swingline Lender as a U.S. Lender with respect to such portion.
(d) Obligation
to Fund Absolute.
Each
U.S. Lender’s obligations pursuant to clause
(c)
above
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement under any and all circumstances
whatsoever, including (A) the existence of any setoff, claim, abatement,
recoupment, defense or other right that such U.S. Lender, any Affiliate thereof
or any other Person may have against the Swingline Lender as a U.S. Lender,
any
other Secured Party or any other Person, (B) the failure of any condition
precedent set forth in Section
3.2
to be
satisfied or the failure of the U.S. Borrowers to deliver any notice set forth
in Section
2.2A(a)
(each of
which requirements the U.S. Lenders hereby irrevocably waive) and (C) any
adverse change in the condition (financial or otherwise) of any Loan
Party.
Section
2.3B Canadian
Swing Loans
(a)
Availability.
On the
terms and subject to the conditions contained in this Agreement, the Canadian
Swingline Lender may, in its sole discretion, make loans in Dollars (each a
“Canadian
Swing Loan”)
available to Bombay Canada under the Canadian Revolving Credit Facility from
time to time on any Business Day during the period from the date hereof until
the Revolving Credit Termination Date in an aggregate principal amount at any
time outstanding not to exceed its Canadian Swingline Commitment; provided,
however,
that
the Canadian Swingline Lender may not make any Canadian Swing Loan (x) to the
extent that after giving effect to such Canadian Swing Loan, the aggregate
Canadian Revolving Credit Outstandings would exceed the lesser of (1) the
aggregate Canadian Revolving Credit Commitments and (2) the Canadian Borrowing
Base and (y) in the period commencing on the first Business Day after it
receives notice from the Administrative Agent or the Required Lenders that
one
or more of the conditions precedent contained in Section
3.2
are not
satisfied and ending when such conditions are satisfied or duly waived. In
connection with the making of any Canadian Swing Loan, the Canadian Swingline
Lender may but shall not be required to determine that, or take notice whether,
the conditions precedent set forth in Section
3.2
have
been satisfied or waived. Each Canadian Swing Loan shall be a Base Rate Loan
and
must be repaid in full on the earliest of (i) the funding date of any Borrowing
of Canadian Revolving Loans and (ii) the Revolving Credit Termination Date.
Within the limits set forth in the first sentence of this clause
(a),
amounts
of Canadian Swing Loans repaid may be reborrowed under this clause
(a).
(b) Borrowing
Procedures.
In
order to request a Canadian Swing Loan, Bombay Canada shall give to the Canadian
Agent a duly completed Swingline Request to be received not later than 1:00
p.m.
on the day of the proposed borrowing or by telephone if confirmed promptly
but,
in any event, prior to such borrowing, with such a Swingline Request. In
addition, if any Notice of Borrowing requests a Borrowing of Canadian Revolving
Loans as Base Rate Loans, the Canadian Swingline Lender may, notwithstanding
anything else to the contrary in Section
2.2,
make a
Canadian Swing Loan available to Bombay Canada in an aggregate amount not to
exceed such proposed Borrowing, and the aggregate amount of the corresponding
proposed Borrowing shall be reduced accordingly by the principal amount of
such
Canadian Swing Loan. The Canadian Agent shall promptly notify the Canadian
Swingline Lender of the details of the requested Canadian Swing Loan. Upon
receipt of such notice and subject to the terms of this Agreement, the Canadian
Swingline Lender may make a Canadian Swing Loan available to Bombay Canada
by
making the proceeds thereof available to the Canadian Agent and, in turn, the
Canadian Agent shall make such proceeds available to Bombay Canada on the date
set forth in the relevant Swingline Request.
41
(c) Refinancing
Swing Loans.
The
Canadian Swingline Lender may at any time forward a demand to the Canadian
Agent
(which the Canadian Agent shall, upon receipt, forward to each Canadian Lender)
that each Canadian Lender pay to the Canadian Agent, for the account of the
Canadian Swingline Lender, such Canadian Lender’s Pro Rata Share of all or a
portion of the outstanding Canadian Swing Loans. Each Canadian Lender shall
pay
such Pro Rata Share to the Canadian Agent for the account of the Canadian
Swingline Lender. Upon receipt by the Canadian Agent of such payment (other
than
during the continuation of any Event of Default under Section
8.1(e)),
such
Canadian Lender shall be deemed to have made a Canadian Revolving Loan to Bombay
Canada, which, upon receipt of such payment by the Canadian Swingline Lender
from the Canadian Agent, Bombay Canada shall be deemed to have used in whole
to
refinance such Canadian Swing Loan. In addition, regardless of whether any
such
demand is made, upon the occurrence of any Event of Default under Section
8.1(e),
each
Canadian Lender shall be deemed to have acquired, without recourse or warranty,
an undivided interest and participation in each Canadian Swing Loan in an amount
equal to such Canadian Lender’s Pro Rata Share of such Canadian Swing Loan. If
any payment made by any Canadian Lender as a result of any such demand is not
deemed a Canadian Revolving Loan, such payment shall be deemed a funding by
such
Canadian Lender of such participation. Such participation shall not be otherwise
required to be funded. Upon receipt by the Canadian Swingline Lender of any
payment from any Canadian Lender pursuant to this clause
(c)
with
respect to any portion of any Canadian Swing Loan, the Canadian Swingline Lender
shall promptly pay over to such Canadian Lender all payments of principal (to
the extent received after such payment by such Lender) and interest (to the
extent accrued with respect to periods after such payment) received by the
Canadian Swingline Lender with respect to such portion.
(d) Obligation
to Fund Absolute.
Each
Canadian Lender’s obligations pursuant to clause
(c)
above
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement under any and all circumstances
whatsoever, including (A) the existence of any setoff, claim, abatement,
recoupment, defense or other right that such Canadian Lender, any Affiliate
thereof or any other Person may have against the Canadian Swingline Lender,
any
other Secured Party or any other Person, (B) the failure of any condition
precedent set forth in Section
3.2
to be
satisfied or the failure of Bombay Canada to deliver any notice set forth in
Section
2.2B(a)
(each of
which requirements the Canadian Lenders hereby irrevocably waive) and (C) any
adverse change in the condition (financial or otherwise) of any Loan
Party.
Section 2.4 Letters
of Credit.
(a) Commitment
and Conditions.
On the
terms and subject to the conditions contained herein, each L/C Issuer agrees
to
Issue, or cause to be Issued, at the request of the Parent, in accordance with
such L/C Issuer’s usual and customary business practices, and for the account of
the U.S. Borrowers (or, as long as the U.S. Borrowers remain responsible for
the
payment in full of all amounts drawn thereunder and related fees, costs and
expenses, for the account of any Group Member) Letters of Credit from time
to
time on any Business Day during the period from the Closing Date through the
earlier of the Revolving Credit Termination Date and seven days prior to the
Scheduled Maturity Date; provided,
however,
that
such L/C Issuer shall not be under any obligation to Issue any Letter of Credit
upon the occurrence of any of the following, after giving effect to such
Issuance:
(i) (x)
the
U.S. Revolving Credit Outstandings would exceed the lesser of (1) aggregate
U.S. Revolving Credit Commitments minus the Minimum Availability Amount or
(2) the U.S. Borrowing Base minus the Minimum Availability Amount or (y)
the L/C Obligations for all Letters of Credit would exceed the L/C
Sublimit;
42
(ii) the
expiration date of such Letter of Credit (x) is not a Business Day, (y) is
more
than one year after the date of issuance thereof or (z) is later than
7 days prior to the Scheduled Maturity Date; provided,
however,
that
any Letter of Credit with a term not exceeding one year may provide for its
renewal for additional periods not exceeding one year as long as (1) each of
the
U.S. Borrowers and such L/C Issuer have the option to prevent such renewal
before the expiration of such term or any such period and (2) neither such
L/C
Issuer nor the U.S. Borrowers shall permit any such renewal to extend such
expiration date beyond the date set forth in this clause
(a);
or
(iii) (x)
any
fee due in connection with, and on or prior to, such Issuance has not been
paid,
(y) such Letter of Credit is requested to be Issued in a form that is not
acceptable to such L/C Issuer or (z) such L/C Issuer shall not have received,
each in form and substance reasonably acceptable to it and duly executed by
the
U.S. Borrowers (and, if such Letter of Credit is issued for the account of
any
other Group Member, such Group Member), the documents that such L/C Issuer
generally uses in the ordinary course of its business for the Issuance of
letters of credit of the type of such Letter of Credit (collectively, the
“L/C
Reimbursement Agreement”).
For
each
such Issuance, the applicable L/C Issuer may, but shall not be required to,
determine that, or take notice whether, the conditions precedent set forth
in
Section 3.2
have
been satisfied or waived in connection with the Issuance of any Letter of
Credit; provided,
however,
that no
Letter of Credit shall be Issued during the period starting on the first
Business Day after the receipt by such L/C Issuer of notice from the
Administrative Agent or the Required Lenders that any condition precedent
contained in Section 3.2
is not
satisfied and ending on the date all such conditions are satisfied or duly
waived.
(b) Notice
of Issuance.
The
U.S. Borrowers shall give the relevant L/C Issuer and the Administrative Agent
a
notice of any requested Issuance of any Letter of Credit, which shall be
effective only if received by such L/C Issuer and the Administrative Agent
not
later than 11:00 a.m. on the third Business Day prior to the date of such
requested Issuance. Such notice may be made in a writing substantially the
form
of Exhibit E
duly
completed or in a writing in any other form acceptable to such L/C Issuer or
by
electronic means agreed among the L/C Issuer, the Administrative Agent and
the
Parent (an “L/C
Request”)
or by
telephone if confirmed promptly, but in any event within one Business Day and
prior to such Issuance, with such an L/C Request.
(c) Reporting
Obligations of L/C Issuers.
Each
L/C Issuer agrees to provide the Administrative Agent (which, after receipt,
the
Administrative Agent shall provide to each U.S. Lender), in form and substance
satisfactory to the Administrative Agent, each of the following on the following
dates: (i) on or prior to (x) any Issuance of any Letter of Credit by such
L/C
Issuer, (y) any drawing under any such Letter of Credit or (z) any payment
(or
failure to pay when due) by the U.S. Borrowers of any related L/C Reimbursement
Obligation, notice thereof, which shall contain a reasonably detailed
description of such Issuance, drawing or payment, (ii) upon the request of
the
Administrative Agent (or any U.S. Lender through the Administrative Agent),
copies of any Letter of Credit Issued by such L/C Issuer and any related L/C
Reimbursement Agreement and such other documents and information as may
reasonably be requested by the Administrative Agent and (iii) on the first
Business Day of each calendar week, a schedule of the Letters of Credit Issued
by such L/C Issuer, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth, as of the last Business Day of the previous
calendar week, the L/C Obligations for all such Letters of Credit, listing
separately the L/C Obligations for each Documentary Letter of Credit and Standby
Letter of Credit.
43
(d) Acquisition
of Participations.
Upon
any Issuance of a Letter of Credit in accordance with the terms of this
Agreement resulting in any increase in the L/C Obligations, each U.S. Lender
shall be deemed to have acquired, without recourse or warranty, an undivided
interest and participation in such Letter of Credit and the related L/C
Obligations in an amount equal to such U.S. Lender’s Pro Rata Share of such L/C
Obligations.
(e) Reimbursement
Obligations of the U.S. Borrowers.
The L/C
Issuer shall promptly notify the Administrative Agent of the incurrence by
the
L/C Issuer of an L/C Reimbursement Obligation. Upon the incurrence by the L/C
Issuer of an L/C Reimbursement Obligation, the L/C Reimbursement Obligation
shall be payable on demand by the U.S. Borrowers with interest thereon computed
(i) from the date on which such L/C Reimbursement Obligation arose to the first
Business Day after the Parent receives notice from the L/C Issuer that payment
has been made under such Letter of Credit or that such L/C Reimbursement
Obligation is otherwise due (the “L/C
Reimbursement Date”),
at
the interest rate applicable during such period to U.S. Revolving Loans that
are
Base Rate Loans and (ii) thereafter until payment in full, at the interest
rate
applicable during such period to past due U.S. Revolving Loans that are Base
Rate Loans. The Administrative Agent shall forward a copy of the notice
described in this clause
(e)
above to
each U.S. Lender.
(f) Reimbursement
Obligations of the U.S. Lenders.
Upon
receipt of the notice described in clause
(e)
above
from the Administrative Agent, each U.S. Lender shall pay to the Administrative
Agent for the account of such L/C Issuer its Pro Rata Share of such L/C
Reimbursement Obligation. By making such payment (other than during the
continuation of an Event of Default under Section 8.1(e)),
such
Lender shall be deemed to have made a U.S. Revolving Loan to the U.S. Borrowers,
which, upon receipt thereof by such L/C Issuer, the U.S. Borrowers shall be
deemed to have used in whole to repay such L/C Reimbursement Obligation. Any
such payment that is not deemed a U.S. Revolving Loan shall be deemed a funding
by such U.S. Lender of its participation in the applicable Letter of Credit
and
the related L/C Obligations. Such participation shall not otherwise be required
to be funded. Upon receipt by any L/C Issuer of any payment from any U.S. Lender
pursuant to this clause
(f)
with
respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer
shall promptly pay over to such U.S. Lender all payments received after such
payment by such L/C Issuer with respect to such portion.
(g) Obligations
Absolute.
The
obligations of the U.S. Borrowers and the U.S. Lenders pursuant to clauses
(d),
(e)
and
(f)
above
shall be absolute, unconditional and irrevocable and performed strictly in
accordance with the terms of this Agreement irrespective of (i) (x) the
invalidity or unenforceability of any term or provision in any Letter of Credit,
any document transferring or purporting to transfer a Letter of Credit, any
Loan
Document (including the sufficiency of any such instrument), or any modification
to any provision of any of the foregoing, (y) any document presented under
a
Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate
in any respect or failing to comply with the terms of such Letter of Credit
or
(z) any loss or delay, including in the transmission of any document, (ii)
the
existence of any setoff, claim, abatement, recoupment, defense or other right
that any Person (including any Group Member) may have against the beneficiary
of
any Letter of Credit or any other Person, whether in connection with any Loan
Document or any other Contractual Obligation or transaction, or the existence
of
any other withholding, abatement or reduction, (iii) in the case of the
obligations of any U.S. Lender, (x) the failure of any condition precedent
set
forth in Section 3.2
to be
satisfied (each of which conditions precedent the U.S. Lenders hereby
irrevocably waive) or (y) any adverse change in the condition (financial or
otherwise) of any Loan Party and (iv) any other act or omission to act or delay
of any kind of any Secured Party or any other Person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of any obligation of the Borrowers
or
any U.S. Lender hereunder.
44
(h) Limitation
of L/C Issuer’s Liability.
No
action taken or omitted to be taken by the relevant L/C Issuer under or in
connection with any Letter of Credit, none of the circumstances set forth in
clause
(g)
above
and no other circumstance shall result in any liability of such L/C Issuer
to
any Group Member or any other Secured Party in the absence of gross negligence
or willful misconduct by such L/C Issuer. In determining whether documents
presented under a Letter of Credit comply with the terms thereof, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. In making any payment under any Letter of Credit,
the L/C Issuer may rely exclusively on the documents presented to it under
such
Letter of Credit as to any and all matters set forth therein, and any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not
to
constitute willful misconduct or gross negligence of the L/C
Issuer.
(i) Applicable
Rules.
Unless
otherwise expressly agreed by the applicable L/C Issuer and the Borrowers,
(i)
the rules of the “International Standby Practices 1998” published by the
Institute of International Banking Law and Practice (or such later version
thereof as may be in effect at the time of determination) shall apply to each
standby Letter of Credit and (ii) the rules of the Uniform Customs and Practices
for Documentary Credits (UCP500), as most recently published by the
International Chamber of Commerce at the time of determination and together
with
supplements and revisions thereto published by the International Chamber of
Commerce from time to time, shall apply to each documentary Letter of
Credit.
(j) Conflicts.
In the
event of a conflict between the terms of any L/C Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
Section 2.5 Reduction
and Termination of the Commitments.
(a) Optional.
The
U.S. Borrowers may, upon notice to the Administrative Agent, terminate in whole
or reduce in part ratably any unused portion of the U.S. Revolving Credit
Commitments; provided,
however,
that
each partial reduction shall be in an aggregate amount that is an integral
multiple of $1,000,000. Bombay Canada may, upon notice to the Canadian Agent,
terminate in whole or reduce in part ratably any unused portion of the Canadian
Revolving Credit Commitments; provided,
however,
that
each partial reduction shall be in an aggregate amount that is an integral
multiple of $1,000,000.
45
(b) Mandatory.
All
outstanding Commitments shall terminate on the Scheduled Maturity
Date.
Section 2.6 Repayment
of Loans.
The
U.S. Borrowers promise to repay the entire unpaid principal amount of the U.S.
Revolving Loans and the Swing Loans and Bombay Canada promises to repay the
entire unpaid principal amount of the Canadian Revolving Loans and the Canadian
Swing Loans on the Scheduled Maturity Date.
Section 2.7 Optional
Prepayments.
The
Borrowers may prepay the outstanding principal amount of any Loan in whole
or in
part at any time (together with any breakage costs that may be owing pursuant
to
Section 2.16(a)
after
giving effect to such prepayment).
Section 2.8 Mandatory
Prepayments.
(a) Asset
Sales and Property Loss Events.
Upon
receipt on or after the Closing Date by any Loan Party or any of its
Subsidiaries of Net Cash Proceeds arising from (i) any Sale of the Eligible
Real Property or (ii) any Property Loss Event with respect to the Eligible
Real
Property, the U.S. Borrowers shall immediately pay or cause to be paid to the
Administrative Agent an amount such that the U.S. Revolving Credit Outstandings
shall be equal to or less than the amount of the U.S. Borrowing Base (without
regard to the Eligible Real Property) minus the Minimum Availability Amount;
provided,
however,
that in
the event of a partial Property Loss Event, (i) the U.S. Borrowers shall
immediately pay or cause to be paid the insurance proceeds associated with
such
loss to a segregated account over which the Administrative Agent has a valid
perfected Lien for use by the Borrowers solely to repair such loss or damage
to
property and (ii) the Borrowers shall not be required to pay or cause such
proceeds to be paid to the Administrative Agent to the extent (A) the Borrowers
reinvest or commit to reinvest such proceeds within 9 months of the occurrence
of the partial Property Loss Event and (B) as long as the Borrower is diligently
pursuing to repair the loss or damage to such Eligible Real Property. The
Borrowers shall deliver to the Administrative Agent within 21 days of such
partial Property Loss Event an updated appraisal with respect to such Eligible
Real Property.
(b) Excess
Outstandings.
On any
date on which (i) the aggregate principal amount of U.S. Revolving Credit
Outstandings exceeds the lesser of (x) aggregate U.S. Revolving Credit
Commitments at such time minus the Minimum Availability Amount and (y) the
U.S. Borrowing Base minus the Minimum Availability Amount or (ii) the L/C
Obligations for all Letters of Credit exceeds the L/C Sublimit, the U.S.
Borrowers shall pay to the Administrative Agent an amount equal to such excess.
On any date on which the aggregate principal amount of Canadian Revolving Credit
Outstandings exceeds the lesser of (x) the aggregate Canadian Revolving
Credit Commitments at such time and (y) the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ shall pay to the Canadian Agent an amount equal to such excess.
Notwithstanding the foregoing, any Overadvance made in accordance with
Section
2.1A(c)
shall be
repaid in accordance with such Section
2.1A(c).
46
(c) Application
of Payments.
Any
payments made to the Administrative Agent and/or the Canadian Agent pursuant
to
this Section 2.8
shall be
applied to the Obligations in accordance with Section 2.12(b).
Section 2.9 Interest.
(a) Rate.
All
Loans and the outstanding amount of all other Obligations shall bear interest,
in the case of Loans, on the unpaid principal amount thereof from the date
such
Loans are made and, in the case of such other Obligations, from the date such
other Obligations are due and payable until, in all cases, paid in full, except
as otherwise provided in clause
(c)
below,
as follows: (i) in the case of Base Rate Loans, at a rate per annum equal to
the
sum of the Base Rate and the Applicable Margin, each as in effect from time
to
time, (ii) in the case of Eurodollar Rate Loans, at a rate per annum equal
to
the sum of the Eurodollar Rate and the Applicable Margin, each as in effect
for
the applicable Interest Period and (iii) in the case of other Obligations,
at a
rate per annum equal to the sum of the Base Rate and the Applicable Margin
for
Revolving Loans that are Base Rate Loans, each as in effect from time to
time.
(b) Payments.
Interest accrued shall be payable in arrears (i) if accrued on the principal
amount of any Loan, (A) at maturity (whether by acceleration or otherwise),
and
(B)(1) if such Loan is a Base Rate Loan (including a Swing Loan or a Canadian
Swing Loan), on the last day of each calendar month commencing on the first
such
day following the making of such Loan, (2) if such Loan is a Eurodollar Rate
Loan, on the last day of each Interest Period applicable to such Loan and,
if
applicable, on each date during such Interest Period occurring every 3 months
from the first day of such Interest Period and (ii) if accrued on any other
Obligation, on demand from and after the time such Obligation is due and payable
(whether by acceleration or otherwise).
(c) Default
Interest.
Notwithstanding the rates of interest specified in clause (a)
above or
elsewhere in any Loan Document, effective immediately upon (i) the occurrence
of
any Event of Default under Section 8.1(a)
or 8.1(e)(ii)
or (ii)
the delivery of a notice by the Administrative Agent or the Required Lenders
to
the Borrowers during the continuance of any other Event of Default and, in
each
case, for as long as such Event of Default shall be continuing, the principal
balance of all Obligations (including any Obligation that bears interest by
reference to the rate applicable to any other Obligation) then due and payable
shall, subject to the Interest
Act (Canada),
bear interest at a rate that is 2% per annum in excess of the interest rate
applicable to such Obligations from time to time, payable on demand or, in
the
absence of demand, on the date that would otherwise be applicable.
(d) Limitation
on Interest.
If any
provision of this Agreement or of any of the other Loan Documents would obligate
any Borrower or any other Loan Party to make any payment of interest or other
amount payable to any Lender in an amount or calculated at a rate which would
be
prohibited by law or would result in a receipt by such Lender of interest at
a
criminal rate (as such terms are construed under the Criminal
Code
(Canada)) then, notwithstanding such provisions, such amount or rate shall
be
deemed to have been adjusted with retroactive effect to the maximum amount
or
rate of interest, as the case may be, as would not be so prohibited by law
or so
result in a receipt by such Lender of interest at a criminal rate, such
adjustment to be effected, to the extent necessary, as follows: (1) firstly,
by
reducing the amount or rate of interest required to be paid to such Lender
under
this Section
2.9,
and (2)
thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid to such Lender which would constitute “interest”
for
purposes of Section 347 of the Criminal
Code (Canada).
Notwithstanding the foregoing, and after giving effect to all adjustments
contemplated thereby, if a Lender shall have received an amount in excess of
the
maximum permitted by that section of the Criminal
Code
(Canada), such Borrower shall be entitled, by notice in writing to such Lender,
to obtain reimbursement from such Lender in an amount equal to such excess
and,
pending such reimbursement, such amount shall be deemed to be an amount payable
by such Lender to such Borrower. Any amount or rate of interest referred to
in
this Section
2.9(d)
shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that the
applicable Loan remains outstanding on the assumption that any charges, fees
or
expenses that fall within the meaning of “interest”
(as
defined in the Criminal
Code
(Canada)) shall, if they relate to a specific period of time, be pro-rated
over
that period of time and otherwise be pro-rated over the period from the Closing
Date to the Revolving Credit Termination Date and, in the event of a dispute,
a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by
Agent shall be conclusive for the purposes of such determination.
47
(e) Interest
Act
(Canada).
For
purposes of disclosure pursuant to the Interest
Act
(Canada), the annual rates of interest or fees to which the rates of interest
or
fees provided in this Agreement and the other Loan Documents (and stated herein
or therein, as applicable, to be computed on the basis of a 360 day year or
any
other period of time less than a calendar year) are equivalent are the rates
so
determined multiplied by the actual number of days in the applicable calendar
year and divided by 360 or such other period of time, respectively.
Section 2.10 Conversion
and Continuation Options.
(a) Option.
The
Borrowers may elect (i) in the case of any Eurodollar Rate Loan, (A) to continue
such Eurodollar Rate Loan or any portion thereof for an additional Interest
Period on the last day of the Interest Period applicable thereto and (B) to
convert such Eurodollar Rate Loan or any portion thereof into a Base Rate Loan
at any time on any Business Day, subject to the payment of any breakage costs
required by Section 2.16(a),
and
(ii) in the case of Base Rate Loans (other than Swing Loans or Canadian Swing
Loans), to convert such Base Rate Loans or any portion thereof into Eurodollar
Rate Loans at any time on any Business Day upon 3 Business Days’ prior notice;
provided,
however,
that,
(A) for each Interest Period, the aggregate amount of Eurodollar Rate Loans
having such Interest Period must be an integral multiple of $1,000,000 and
(B)
no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans
and no continuation in whole or in part of Eurodollar Rate Loans shall be
permitted at any time at which (1) an Event of Default shall be continuing
and
the Administrative Agent or the Required Lenders shall have determined in their
sole discretion not to permit such conversions or continuations or (2) such
continuation or conversion would be made during a suspension imposed by
Section 2.15.
(b) Procedure.
Each
such election shall be made by giving the Administrative Agent or the Canadian
Agent, as applicable, at least 3 Business Days’ prior notice in substantially
the form of Exhibit F
(a
“Notice
of Conversion or Continuation”)
duly
completed. The Administrative Agent or the Canadian Agent in respect of Canadian
Lenders shall promptly notify each Lender of its receipt of a Notice of
Conversion or Continuation and of the options selected therein. If the
Administrative Agent or Canadian Agent does not receive a timely Notice of
Conversion or Continuation from the Borrowers containing a permitted election
to
continue or convert any Eurodollar Rate Loan, then, upon the expiration of
the
applicable Interest Period, such Loan shall be automatically converted to a
Base
Rate Loan. Each partial conversion or continuation shall be allocated ratably
among the Lenders in the applicable Facility in accordance with their Pro Rata
Share.
48
Section 2.11 Fees.
(a) Unused
Commitment Fee.
The
Borrowers agree to pay to each Lender a commitment fee on the actual daily
amount by which the Revolving Credit Commitment of such Lender exceeds its
Pro
Rata Share of the sum of (i) the aggregate outstanding principal amount of
Revolving Loans and (ii) in the case of the U.S. Lenders, the outstanding amount
of the L/C Obligations for all Letters of Credit (the “Unused
Commitment Fee”)
from
the date hereof through the Revolving Credit Termination Date at a rate per
annum equal to the Applicable Margin Unused Commitment Fee, payable in arrears
(x) on the last day of each calendar month and (y) on the Revolving Credit
Termination Date.
(b) Letter
of Credit Fees.
The
U.S. Borrowers agree to pay, with respect to all Documentary Letters of Credit
and Standby Letters of Credit issued by any L/C Issuer, (i) to such L/C Issuer,
certain fees, documentary and processing charges as separately agreed between
the U.S. Borrowers and such L/C Issuer or otherwise in accordance with such
L/C
Issuer’s standard schedule in effect at the time of determination thereof and
(ii) to the Administrative Agent, for the benefit of the U.S. Lenders according
to their Pro Rata Shares, a fee accruing at a rate per annum equal to the
Applicable Margin for Revolving Loans that are Eurodollar Rate Loans on the
Dollar Equivalent on the maximum undrawn face amount of such Letters of Credit,
payable in arrears (A) on the last day of each calendar month, ending after
the
issuance of such Letter of Credit and (B) on the Revolving Credit Termination
Date; provided,
however,
that
the fee payable under this clause
(ii)
shall be
increased by two percent per annum and shall be payable, in addition to being
payable on any date it is otherwise required to be paid hereunder, on demand
effective immediately upon (A) the occurrence of any Event of Default under
Section 8.1(a)
or 8.1(e)(ii)
or (B)
the delivery of a notice by the Administrative Agent or the Required Lenders
to
the Borrowers during the continuance of any other Event of Default and, in
each
case, for as long as such Event of Default shall be continuing.
(c) Additional
Fees.
The
Borrowers shall pay to the Administrative Agent or Canadian Agent, as
applicable, and their Related Persons the fees described in the Fee
Letter.
Section 2.12 Application
of Payments.
(a) Application
of Voluntary Prepayments.
Unless
otherwise provided in this Section 2.12
or
elsewhere in any Loan Document, (i) all payments and any other amounts received
by the Administrative Agent from or for the benefit of the U.S. Borrowers shall
be applied to repay the Obligations as the U.S. Borrowers designate, and (ii)
all payments and other amounts received by the Canadian Agent from or for the
benefit of Bombay Canada shall be applied to repay the Obligations as Bombay
Canada designates.
(b) Application
of Mandatory Prepayments.
Subject
to the provisions of clause
(c)
below
with respect to the application of payments during the continuance of an Event
of Default, (i) in the case of a payment pursuant to Section
2.8(a),
first
to the
Swing Loans, second
to the
U.S. Revolving Loans and third
to
provide cash collateral to the extent and in the manner contemplated by
Section
8.3
and (ii)
in all other cases, any payment made by the U.S. Borrowers to the Administrative
Agent or by Bombay Canada to the Canadian Agent pursuant to Section 2.8
or any
other prepayment of the Obligations required to be applied in accordance with
this clause
(b)
shall be
applied (A) in the case of payments by the Canadian Borrower, first,
to
repay the outstanding principal balance of the Canadian Swing Loans,
second,
to
repay the outstanding principal balance of the Canadian Revolving Loans and,
then,
any
excess shall be retained by the Canadian Borrower and (B) in the case of the
U.S. Borrowers, first,
to
repay the outstanding principal balance of the Swing Loans, second,
to
repay the outstanding principal balance of the U.S. Revolving Loans,
third,
to
provide cash collateral to the extent and in the manner in Section 8.3
and,
then,
any
excess shall be retained by the U.S. Borrowers.
49
(c) Application
of Payments During an Event of Default.
(i) The
U.S. Borrowers hereby irrevocably waive, and, subject to Section
2.2B(d),
agree
to cause each Loan Party and each other Group Member (which shall not include
Bombay Canada) to waive, the right to direct the application during the
continuance of an Event of Default of any and all payments in respect of any
of
their Obligations and any proceeds of their Collateral and agree that,
notwithstanding the provisions of clause (a)
above,
the Administrative Agent may, and, upon either (A) the direction of the Required
Lenders or (B) the termination of any U.S. Revolving Credit Commitment or the
acceleration of any of their Obligations pursuant to Section 8.2,
shall,
apply all payments in respect of any of their Obligations, all funds on deposit
in any Cash Collateral Account and all other proceeds of their Collateral (i)
first,
to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to the Administrative Agent, (ii) second,
to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to the U.S. Lenders and the L/C Issuers, (iii) third,
to pay
interest then due and payable in respect of the U.S. Revolving Loans and L/C
Reimbursement Obligations, (vi) fourth,
to
repay the outstanding principal amounts of the U.S. Revolving Loans and L/C
Reimbursement Obligations, to provide cash collateral for Letters of Credit
in
the manner and to the extent described in Section 8.3
and
(vii) fifth,
to the
ratable payment of all other of their Obligations.
(ii)
Subject to Section
2.2B(d),
Bombay
Canada hereby irrevocably waives the right to direct the application during
the
continuance of an Event of Default of any and all payments in respect of any
of
its Obligations and any proceeds of its Collateral and agree that,
notwithstanding the provisions of clause (a)
above,
the Canadian Agent may, and, upon either (A) the direction of the Required
Lenders or (B) the termination of any Canadian Revolving Credit Commitment
or
the acceleration of any of its Obligations pursuant to Section 8.2,
shall,
apply all payments in respect of any of its Obligations, all funds on deposit
in
any Cash Collateral Account and all other proceeds of its Collateral (i)
first,
to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to the Canadian Agent, (ii) second,
to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to the Canadian Lenders, (iii) third,
to pay
interest then due and payable in respect of Canadian Revolving Loans and
Canadian Swing Loans, (iv) fourth,
to
repay the outstanding principal amounts of the Canadian Revolving Loans and
Canadian Swing Loans, and (v) fifth,
to the
ratable payment of all other of its Obligations.
(d) Application
of Payments Generally.
All
repayments of any Revolving Loans shall be applied first,
to
repay such Loans outstanding as Base Rate Loans and then,
to
repay such Loans outstanding as Eurodollar Rate Loans, with those Eurodollar
Rate Loans having earlier expiring Interest Periods being repaid prior to those
having later expiring Interest Periods. If sufficient amounts are not available
to repay all outstanding Obligations described in any priority level set forth
in this Section 2.12,
the
available amounts shall be applied, unless otherwise expressly specified herein,
to such Obligations ratably based on the proportion of the Secured Parties’
interest in such Obligations expressed in Dollars. Any priority level set forth
in this Section 2.12
that
includes interest shall include all such interest, whether or not accruing
after
the filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceeding, and whether or not a claim for post-filing
or post-petition interest is allowed in any such proceeding.
50
Section 2.13 Payments
and Computations.
(a) Procedure.
(i) The
U.S. Borrowers shall make each payment under any Loan Document not later than
1:00 p.m. on the day when due to the Administrative Agent by wire transfer
to the following account (the “Loan
Account”)
(or at
such other account or by such other means to such other address as the
Administrative Agent shall have notified the U.S. Borrowers in writing within
a
reasonable time prior to such payment) in immediately available Dollars and
without setoff or counterclaim:
ABA
No.:
▇▇▇-▇▇▇-▇▇▇
Account
No.: ▇▇▇▇▇▇▇▇
Account
Name: GECC CFS CIF Collection Account,
Reference:
Bombay Company, Inc. - CFN9184
The
Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest
or
fees to the U.S. Lenders, in accordance with the application of payments set
forth in Section 2.12.
The
U.S. Lenders shall make any payment under any Loan Document in immediately
available Dollars and without setoff or counterclaim. Each U.S. Lender shall
make each payment for the account of any L/C Issuer or Swingline Lender required
pursuant to Section 2.3
or
2.4
(A) if
the notice or demand therefor was received by such Lender prior to
1:00 p.m. on any Business Day, on such Business Day and (B) otherwise,
on the Business Day following such receipt. Payments received by the
Administrative Agent after 1:00 p.m. shall be deemed to be received on the
next Business Day.
(ii)
Bombay Canada shall make each payment under any Loan Document not later than
1:00 p.m. on the day when due to the Canadian Agent by wire transfer to the
following account (or at such other account or by such other means to such
other
address as the Canadian Agent shall have notified Bombay Canada in writing
within a reasonable time prior to such payment) in immediately available Dollars
and without setoff or counterclaim:
SWIFT
Code: ▇▇▇▇▇▇▇▇
Account
No.: ▇▇▇-▇▇▇-▇
Royal
Bank of Canada, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Reference: Bombay
Company Inc. CND1052
Branch
▇▇. ▇▇▇▇▇
▇▇▇▇
▇▇.
▇▇▇▇▇
The
Canadian Agent shall promptly thereafter cause to be distributed immediately
available funds relating to the payment of principal, interest or fees to the
Canadian Lenders, in accordance with the application of payments set forth
in
Section 2.12.
The
Canadian Lenders shall make any payment under any Loan Document in immediately
available Dollars and without setoff or counterclaim. Each Canadian Lender
shall
make payment for the account of the Canadian Swingline Lender required hereunder
pursuant to Section
2.3
(A) if
the notice of demand therefore was received by such Lender prior to 11:00 a.m.
on any Business Day, on such Business Day and (B) otherwise, on the Business
Day
following such receipt. Payments received by the Canadian Agent after
1:00 p.m. shall be deemed to be received on the next Business
Day.
51
(b) Computations
of Interests and Fees.
All
computations of interest and of fees shall be made by the Administrative Agent
and the Canadian Agent on the basis of a year of 360 days (or, in the case
of
Base Rate Loans whose interest rate is calculated based on the rate set forth
in
clause
(a)
of the
definition of “Base Rate”, 365/366 days), in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest and fees are payable. Each determination of
an
interest rate or the amount of a fee hereunder shall be made by the
Administrative Agent and the Canadian Agent (including determinations of a
Eurodollar Rate or Base Rate in accordance with the definitions of “Eurodollar
Rate” and “Base Rate”, respectively) and shall be conclusive, binding and final
for all purposes, absent manifest error.
(c) Payment
Dates.
Whenever any payment hereunder shall be stated to be due on a day other than
a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day without any increase in such payment as a result of
additional interest or fees; provided,
however,
that
such interest and fees shall continue accruing as a result of such extension
of
time.
(d) Advancing
Payments.
(i)
Unless the Administrative Agent shall have received notice from the U.S.
Borrowers to the U.S. Lenders prior to the date on which any payment is due
hereunder that the U.S. Borrowers will not make such payment in full, the
Administrative Agent may assume that the U.S. Borrowers has made such payment
in
full to the Administrative Agent on such date and the Administrative Agent
may,
in reliance upon such assumption, cause to be distributed to each U.S. Lender
on
such due date an amount equal to the amount then due such U.S. Lender. If and
to
the extent that the U.S. Borrowers shall not have made such payment in full
to
the Administrative Agent, each U.S. Lender shall repay to the Administrative
Agent on demand such amount distributed to such U.S. Lender together with
interest thereon (at the Federal Funds Rate for the first Business Day and
thereafter, at the rate applicable to Base Rate Loans under the applicable
Facility) for each day from the date such amount is distributed to such U.S.
Lender until the date such U.S. Lender repays such amount to the Administrative
Agent.
(ii)
Unless the Canadian Agent shall have received notice from Bombay Canada to
the
Canadian Lenders prior to the date on which any payment is due hereunder that
Bombay Canada will not make such payment in full, the Canadian Agent may assume
that Bombay Canada has made such payment in full to the Canadian Agent on such
date and the Canadian Agent may, in reliance upon such assumption, cause to
be
distributed to each Canadian Lender on such due date an amount equal to the
amount then due such Canadian Lender. If and to the extent that Bombay Canada
shall not have made such payment in full to the Canadian Agent, each Canadian
Lender shall repay to the Canadian Agent on demand such amount distributed
to
such Canadian Lender together with interest thereon (at the Federal Funds Rate
for the first Business Day and thereafter, at the rate applicable to Base Rate
Loans under the applicable Facility) for each day from the date such amount
is
distributed to such Canadian Lender until the date such Canadian Lender repays
such amount to the Canadian Agent.
(e) The
Administrative Agent is authorized to, and in its sole discretion may, make
Loans (or cause the Canadian Agent to make Loans) on behalf of each Borrower
which the Administrative Agent, in its Permitted Discretion, deems necessary
or
desirable (i) to preserve or protect the Collateral, (ii) to enhance the
likelihood of repayment of the Obligations, (iii) pay any other amount due
under
this Agreement or the other Loan Documents including all fees, costs, charges,
expenses and interest owing by the Borrowers under this Agreement and the other
Loan Documents if and to the extent the Borrowers fail to pay promptly such
amounts as and when due, in each case even if the amount of such charges would
exceed cause the U.S. Revolving Credit Outstanding to exceed the U.S. Borrowing
Base, the Canadian Revolving Credit Outstandings to exceed the Canadian
Borrowing Base or the sum of the U.S. Revolving Outstandings and the Canadian
Revolving Credit Outstandings to exceed to the Aggregate Borrowing Base, after
giving effect to such charges. Amounts advanced under this Section
2.13(e)
are
payable on demand by the Administrative Agent to the Parent.
52
Section 2.14 Evidence
of Debt.
(a) Records
of Lenders.
Each
Lender shall maintain in accordance with its usual practice accounts evidencing
Indebtedness of the Borrowers to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement. In
addition, each Lender having sold a participation in any of its Obligations,
acting as agent of the Borrowers solely for this purpose and solely for tax
purposes, shall establish and maintain at its address referred to in
Section 10.11
(or at
such other address as such Lender shall notify the Parent) a record of
ownership, in which such Lender shall register by book entry (i) the name and
address of each such participant (and each change thereto, whether by assignment
or otherwise) and (ii) the rights, interest or obligation of each such
participant in any Obligation, in any Commitment and in any right to receive
any
payment hereunder.
(b) Records
of the Administrative Agent.
The
Administrative Agent, acting as agent of the U.S. Borrowers and the Canadian
Agent, acting as agent of Bombay Canada, solely for tax purposes and solely
with
respect to the actions described in this Section 2.14,
shall
establish and maintain at its address referred to in Section 10.11
(or at
such other address as such Agent may notify the Borrowers) (i) a record of
ownership (the “Register”)
in
which such Agent agrees to register by book entry the interests (including
any
rights to receive payment hereunder) of such Agent, each relevant Lender and
each L/C Issuer in the U.S. Revolving Credit Outstandings or the Canadian
Revolving Credit Outstandings, each of their obligations under this Agreement
to
participate in each Loan, Letter of Credit and L/C Reimbursement
Obligation, and any assignment of any such interest, obligation or right and
(ii) accounts in the Register in accordance with its usual practice in
which it shall record (A) the names and addresses of the relevant Lenders and
the L/C Issuers (and each change thereto pursuant to Section 2.18
and
Section 10.2),
(B)
the Commitments of each relevant Lender, (C) the amount of each relevant
Loan and each funding of any participation described in clause
(i)
above,
for Eurodollar Rate Loans, the Interest Period applicable thereto, (D) the
amount of any principal or interest due and payable or paid, (E) the amount
of
the L/C Reimbursement Obligations due and payable or paid and (F) any other
payment received by such Agent from the relevant Borrowers and its application
to the Obligations.
(c) Registered
Obligations.
Notwithstanding anything to the contrary contained in this Agreement, the Loans
(including any Notes evidencing such Loans and, in the case of U.S. Revolving
Loans, the corresponding obligations to participate in L/C Obligations and
Swing
Loans and in the case of Canadian Revolving Loans, the corresponding obligations
to participate in Canadian Swing Loans) and the L/C Reimbursement Obligations
are registered obligations, the right, title and interest of the Lenders and
the
L/C Issuers and their assignees in and to such Loans or L/C Reimbursement
Obligations, as the case may be, shall be transferable only upon notation of
such transfer in the Register and no assignment thereof shall be effective
until
recorded therein. This Section 2.14
and
Section 10.2
shall be
construed so that the Loans and L/C Reimbursement Obligations are at all times
maintained in “registered
form”
within
the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any
related regulations (and any successor provisions).
53
(d) Prima
Facie Evidence.
The
entries made in the Register and in the accounts maintained pursuant to
clauses
(a)
and
(b)
above
shall, to the extent permitted by applicable Requirements of Law, be prima
facie
evidence of the existence and amounts of the obligations recorded therein;
provided,
however,
that no
error in such account and no failure of any Lender or the Administrative Agent
or the Canadian Agent to maintain any such account shall affect the obligations
of any Loan Party to repay the Loans in accordance with their terms. In
addition, the Loan Parties, the Administrative Agent, the Canadian Agent, the
Lenders and the L/C Issuers shall treat each Person whose name is recorded
in
the Register as a Lender or L/C Issuer, as applicable, for all purposes of
this
Agreement. Information contained in the Register with respect to any Lender
or
any L/C Issuer shall be available for access by the Borrowers, the
Administrative Agent, the Canadian Agent, such Lender or such L/C Issuer at
any reasonable time and from time to time upon reasonable prior notice. No
Lender or L/C Issuer shall, in such capacity, have access to or be otherwise
permitted to review any information in the Register other than information
with
respect to such Lender or L/C Issuer unless otherwise agreed by the
Administrative Agent.
(e) Notes.
Upon
any Lender’s request, the Borrowers shall promptly execute and deliver Notes to
such Lender evidencing the Loans of such Lender in a Facility and substantially
in the form of Exhibit B;
provided,
however,
that
only one Note for each Facility shall be issued to each Lender, except (i)
to an
existing Lender exchanging existing Notes to reflect changes in the Register
relating to such Lender, in which case the new Notes delivered to such Lender
shall be dated the date of the original Notes and (ii) in the case of loss,
destruction or mutilation of existing Notes and similar circumstances. Each
Note, if issued, shall only be issued as means to evidence the right, title
or
interest of a Lender or a registered assignee in and to the related Loan, as
set
forth in the Register, and in no event shall any Note be considered a bearer
instrument or obligation.
Section 2.15 Suspension
of Eurodollar Rate Option.
Notwithstanding any provision to the contrary in this Article II,
the
following shall apply:
(a) Interest
Rate Unascertainable, Inadequate or Unfair.
In the
event that (A) the Administrative Agent determines that adequate and fair means
do not exist for ascertaining the applicable interest rates by reference to
which the Eurodollar Rate is determined or (B) the Required Lenders, as
applicable, notify the Administrative Agent that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to the Lenders of making
or
maintaining such Loans for such Interest Period, the Administrative Agent shall
promptly so notify the Parent and the Lenders, whereupon the obligation of
each
Lender to make or to continue Eurodollar Rate Loans shall be suspended as
provided in clause
(c)
below
until the Administrative Agent shall notify the Parent that the Required
Lenders, as applicable, have determined that the circumstances causing such
suspension no longer exist.
(b) Illegality.
If any
Lender determines that the introduction of, or any change in or in the
interpretation of, any Requirement of Law after the date of this Agreement
shall
make it unlawful, or any Governmental Authority shall assert that it is
unlawful, for any Lender or its applicable lending office to make Eurodollar
Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then,
on
notice thereof and demand therefor by such Lender to the Parent through the
Administrative Agent, the obligation of such Lender to make or to continue
Eurodollar Rate Loans shall be suspended as provided in clause
(c)
below
until such Lender shall, through the Administrative Agent, notify the Parent
that it has determined that it may lawfully make Eurodollar Rate
Loans.
54
(c) Effect
of Suspension.
If the
obligation of any Lender to make or to continue Eurodollar Rate Loans is
suspended, (A) the obligation of such Lender to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended, (B) such Lender shall make a Base
Rate
Loan at any time such Lender would otherwise be obligated to make a Eurodollar
Rate Loan, (C) the Parent may revoke any pending Notice of Borrowing or Notice
of Conversion or Continuation to make or continue any Eurodollar Rate Loan
or to
convert any Base Rate Loan into a Eurodollar Rate Loan and (D) each Eurodollar
Rate Loan of such Lender shall automatically and immediately (or, in the case
of
any suspension pursuant to clause
(a)
above,
on the last day of the current Interest Period thereof) be converted into a
Base
Rate Loan.
Section 2.16 Breakage
Costs; Increased Costs; Capital Requirements.
(a) Breakage
Costs.
The
Borrowers shall compensate each Lender, upon demand from such Lender to Parent
(with copy to the Administrative Agent), for all Liabilities (including, in
each
case, those incurred by reason of the liquidation or reemployment of deposits
or
other funds acquired by such Lender to prepare to fund, to fund or to maintain
the Eurodollar Rate Loans of such Lender to such Borrower but excluding any
loss
of the Applicable Margin on the relevant Loans) that such Lender may incur
(A)
to the extent, for any reason other than solely by reason of such Lender being
a
Non-Funding Lender, a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice
of
Borrowing or a Notice of Conversion or Continuation or in a similar request
made
by telephone by the Parent, (B) to the extent any Eurodollar Rate Loan is paid
(whether through a scheduled, optional or mandatory prepayment) or converted
to
a Base Rate Loan (including because of Section 2.15)
on a
date that is not the last day of the applicable Interest Period or (C) as a
consequence of any failure by the each relevant Borrower to repay Eurodollar
Rate Loans when required by the terms hereof. For purposes of this clause
(a),
each
Lender shall be deemed to have funded each Eurodollar Rate Loan made by it
using
a matching deposit or other borrowing in the London interbank
market.
(b) Increased
Costs.
If at
any time any Lender or L/C Issuer determines that, after the date hereof, the
adoption of, or any change in or in the interpretation, application or
administration of, or compliance with, any Requirement of Law (other than any
imposition or increase of Eurodollar Reserve Requirements) from any Governmental
Authority shall have the effect of (i) increasing the cost to such Lender of
making, funding or maintaining any Eurodollar Rate Loan or to agree to do so
or
of participating, or agreeing to participate, in extensions of credit, (ii)
increasing the cost to such L/C Issuer of Issuing or maintaining any Letter
of
Credit or of agreeing to do so or (iii) imposing any other cost to such Lender
or L/C Issuer with respect to compliance with its obligations under any Loan
Document, then, upon demand by such Lender or L/C Issuer (with copy to the
Administrative Agent), the Borrowers shall pay to the Administrative Agent
for
the account of such Lender or L/C Issuer amounts sufficient to compensate such
Lender or L/C Issuer for such increased cost.
55
(c) Increased
Capital Requirements.
If at
any time any Lender or L/C Issuer determines that, after the date hereof, the
adoption of, or any change in or in the interpretation, application or
administration of, or compliance with, any Requirement of Law (other than any
imposition or increase of Eurodollar Reserve Requirements) from any Governmental
Authority regarding capital adequacy, reserves, special deposits, compulsory
loans, insurance charges against property of, deposits with or for the account
of, Obligations owing to, or other credit extended or participated in by, any
Lender or L/C Issuer or any similar requirement (in each case other than any
imposition or increase of Eurodollar Reserve Requirements) shall have the effect
of reducing the rate of return on the capital of such Lender’s or L/C Issuer (or
any corporation controlling such Lender or L/C Issuer) as a consequence of
its
obligations under or with respect to any Loan Document or Letter of Credit
to a
level below that which, taking into account the capital adequacy policies of
such Lender, L/C Issuer or corporation, such Lender, L/C Issuer or corporation
could have achieved but for such adoption or change, then, upon demand from
time
to time by such Lender or L/C Issuer (with a copy of such demand to the relevant
Agent), the Borrowers shall pay to the relevant Agent for the account of such
Lender amounts sufficient to compensate such Lender for such
reduction.
(d) Compensation
Certificate.
Each
demand for compensation under this Section 2.16
shall be
accompanied by a certificate of the Lender or L/C Issuer claiming such
compensation, setting forth the amounts to be paid hereunder, which certificate
shall be conclusive, binding and final for all purposes, absent manifest error.
In determining such amount, such Lender or L/C Issuer may use any reasonable
averaging and attribution methods. The Borrower shall pay such Lender or L/C
Issuer, as the case may be, the amount shown due on any such certificate within
10 days after receipt thereof.
Section 2.17 Taxes.
(a) Except
as
otherwise provided herein, all payments made by the Borrowers hereunder or
under
any Note or other Loan Document will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, assessments and all interest, penalties or similar obligations with
respect thereto, but excluding any tax imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein measured by or
based on the net income or net profits of a Lender (including branch profits
taxes) and franchise taxes imposed in lieu of net income taxes, imposed on
any
Lender as a result of a present or former connection between such Lender and
the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than such connection
arising solely from any Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, any Loan Document) and
all
interest, penalties or similar liabilities with respect to such excluded taxes
(all such non-excluded taxes, levies, imposts, duties, assessments or other
charges being referred to collectively as “Taxes”).
If
any Taxes are so levied or imposed, each Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, including
any
amount paid pursuant to this Section
2.17(a)
after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided,
however,
that
the Borrowers shall not be required to increase any such amounts, but only
to
the extent in excess of the amount that would have been withheld had the Lender
delivered the forms required by clause
(c)
of this
Section
2.17,
payable
to the Administrative Agent or any Lender that is not organized under the laws
of the United States, if such Person fails to comply with the other requirements
of this Section
2.17;
provided,
further,
that
this proviso shall not apply to (i) the Canadian Agent, any Canadian Lender
or
the Canadian Swingline Lender or (ii) Taxes that are imposed on amounts payable
to a Lender or Secured Party at the time such Lender or Secured Party becomes
a
party hereto (or designates a new lending office), except to the extent that
such Lender or Secured Party (or its respective assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17. After a party hereto learns of the imposition of
Taxes, such party will act in good faith to promptly notify the other parties
hereto of their respective obligations hereunder. The Borrowers will furnish
to
the Administrative Agent as promptly as possible after the date the payment
of
any Taxes are due pursuant to applicable law original or certified copies of
tax
receipts evidencing such payment by the Borrowers.
56
(b) If
any
Taxes shall be required by law to be deducted or withheld from or in respect
of
any amount payable under any Loan Document to any Secured Party (i) such amount
shall be increased as necessary to ensure that, after all required deductions
or
withholdings for Taxes are made (including deductions applicable to any
increases to any amount under this Section 2.17),
such
Secured Party receives the amount it would have received had no such deductions
or withholdings been made, (ii) the relevant Loan Party shall make such
deductions or withholdings, (iii) the relevant Loan Party shall timely pay
the
full amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable Requirements of Law and (iv) within
30 days after such payment is made, the relevant Loan Party shall deliver to
the
Administrative Agent an original or certified copy of a receipt evidencing
such
payment; provided,
however,
the
amount payable shall not be increased hereunder if the Secured Party fails
to
comply with the other requirements of this Section
2.17,
but
only to the extent in excess of the amount that would have been withheld had
the
Lender delivered the forms required by clause
(c)
of this
Section
2.17.
(c) If
any
Lender having a U.S. Revolving Credit Commitment claims exemption from, or
a
reduction of, U.S. withholding tax, such Lender agrees with and in favor of
the
Administrative Agent and the Borrowers, to deliver to the Administrative Agent
and the Parent:
(i) if
such
Lender claims an exemption from withholding tax pursuant to its portfolio
interest exception, (A) a statement of Lender, signed under penalty of perjury,
that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the Code,
(II) a 10% shareholder of a Borrower (within the meaning of Section 871(h)(3)(B)
of the Code), or (III) a controlled foreign corporation related to a Borrower
within the meaning of Section 864(d)(4) of the Code, and (B) two properly
completed and executed copies of IRS Form W-8BEN (or successor form), before
the
first payment of any interest under this Agreement and at any other time
reasonably requested by the Administrative Agent or the Parent;
(ii) if
such
Lender claims an exemption from, or a reduction of, withholding tax under a
United States tax treaty, two properly completed and executed copies of IRS
Form
W-8BEN (or successor form) before the first payment of any interest under this
Agreement and at any other time reasonably requested by the Administrative
Agent
or the Parent;
(iii) if
such
Lender claims that interest paid under this Agreement is exempt from United
States withholding tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and executed copies
of
IRS Form W-8ECI (or successor form) before the first payment of any interest
is
due under this Agreement and at any other time reasonably requested by the
Administrative Agent or the Parent;
57
(iv) if
such
Lender claims exemption from backup withholding under the Code, two properly
completed and executed copies of IRS Form W-9 (or successor form) before the
first payment under this Agreement and at any other time reasonably requested
by
the Administrative Agent or the Parent;
(v) such
other form or forms as may be required under the Code or other laws of the
United States as a condition to exemption from, or reduction of, United States
withholding tax.
Such
Lender agrees promptly to notify the Administrative Agent and the Parent of
any
change in circumstances which would modify or render invalid any claimed
exemption or reduction. Each Lender having sold, assigned, granted or otherwise
transferred a participation in any of its Obligations shall collect from such
participant the documents described in this clause
(c)
and
provide them to the Borrowers and the Administrative Agent.
(d) If
any
Lender claims exemption from, or reduction of, withholding tax under a United
States tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of the Borrowers to such Lender, such Lender agrees to notify the Administrative
Agent of the percentage amount in which it is no longer the beneficial owner
of
Obligations of the Borrowers to such Lender. To the extent of such percentage
amount, the Administrative Agent will treat such Lender’s IRS Form W-8BEN as no
longer valid.
(e) If
any
Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent may withhold from any interest payment to such Lender
an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by clause
(c)
of this
Section
2.17
are not
delivered to the Administrative Agent, then the Administrative Agent may
withhold from any interest payment to such Lender not providing such forms
or
other documentation an amount equivalent to the applicable withholding tax,
and
neither the Administrative Agent nor any Borrower shall have a duty under this
Section
2.17
to
indemnify the Lender in respect of the Taxes so withheld to the extent that
they
exceed the amount that would have been withheld had the Lender delivered the
forms required by clause
(c)
of this
Section
2.17.
(f) The
Borrowers shall reimburse and indemnify, within 30 days after receipt of demand
therefor (with copy to the Administrative Agent), each Lender for all Taxes
(including any imposed by any jurisdiction on amounts payable under this
Section 2.17)
paid by
such Lender and any Liabilities arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. A certificate
of
the Lender (or of the Administrative Agent on behalf of such Lender) claiming
any compensation under this clause
(f),
setting
forth the amounts to be paid thereunder and delivered to the Parent with copy
to
the Administrative Agent shall be conclusive, binding and final for all
purposes, absent manifest error. In determining such amount, the Administrative
Agent and such Lender may use any reasonable averaging and attribution
methods.
58
(g) If
the
IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because
the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify and hold the Administrative
Agent harmless for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest,
and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section
2.17,
together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment
of
all Obligations and the resignation or replacement of the Administrative Agent.
No Borrower shall be liable under this Section
2.17
for
amounts paid by Lender pursuant to this clause
(g).
(h) Mitigation.
Any
Lender claiming any additional amounts payable pursuant to this Section 2.17
shall
use its reasonable efforts (consistent in its sole discretion with its internal
policies and Requirements of Law) to change the jurisdiction of its lending
office if such a change would reduce any such additional amounts (or any similar
amount that may thereafter accrue) and would not, in the sole determination
of
such Lender, be otherwise disadvantageous to such Lender.
Section 2.18 Substitution
of Lenders.
(a) Designation
of a Different Lending Office. if any Lender requests compensation under clause
(b) or (c) of Section 2.16, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section
2.17,
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 clause
(b)
or
(c)
of
Section
2.16
or
Section 2.17, 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 Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Substitution
Right.
In the
event that any Lender in any Facility that is not the Administrative Agent
or an
Affiliate of the Administrative Agent (an “Affected
Lender”),
(i)
makes a claim under clause
(b)
or
(c)
of
Section 2.16,
(ii)
notifies the Borrowers pursuant to Section 2.15(b)
that it
becomes illegal for such Lender to continue to fund or make any Eurodollar
Rate
Loan in such Facility, (iii) makes a claim for payment pursuant to Section 2.17,
(iv)
becomes a Non-Funding Lender with respect to such Facility or (v) does not
consent to any amendment, waiver or consent to any Loan Document for which
the
consent of the Required Lenders is obtained but that requires the consent of
other Lenders in such Facility, the Borrowers may either pay in full such
Affected Lender with respect to amounts due in such Facility with the consent
of
the Administrative Agent or substitute for such Affected Lender in such Facility
any Lender or any Affiliate or Approved Fund of any Lender or any other Person
acceptable (which acceptance shall not be unreasonably withheld or delayed)
to
the Administrative Agent (in each case, a “Substitute
Lender”).
59
(c) Procedure.
To
substitute such Affected Lender or pay in full the Obligations owed to such
Affected Lender under such Facility, the Parent shall deliver a notice to the
Administrative Agent, or if pertaining to a Canadian Lender, the Canadian Agent,
and such Affected Lender. The effectiveness of such payment or substitution
shall be subject to the delivery to the relevant Agent by the Borrowers (or,
as
may be applicable in the case of a substitution, by the Substitute Lender)
of
(i) payment for the account of such Affected Lender, of, to the extent accrued
through, and outstanding on, the effective date for such payment or
substitution, all Obligations owing to such Affected Lender with respect to
such
Facility (including those that will be owed because of such payment and all
Obligations that would be owed to such Lender if it was solely a Lender in
such
Facility), (ii) in the case of a payment in full of the Obligations owing to
such Affected Lender in the Revolving Credit Facility, payment of any amount
that, after giving effect to the termination of the Commitment of such Affected
Lender, is required to be paid pursuant to Section 2.8(b)
and
(iii) in the case of a substitution, (A) payment of the assignment fee set
forth
in Section 10.2(c)
and (B)
an assumption agreement in form and substance satisfactory to the relevant
Agent
whereby the Substitute Lender shall, among other things, agree to be bound
by
the terms of the Loan Documents and assume the Commitment of the Affected Lender
under such Facility.
(d) Effectiveness.
Upon
satisfaction of the conditions set forth in clause
(b)
above,
the Administrative Agent shall record such substitution or payment in the
Register, whereupon (i) in the case of any payment in full in any Facility,
such
Affected Lender’s Commitments in such Facility shall be terminated and (ii) in
the case of any substitution in any Facility, (A) the Affected Lender shall
sell
and be relieved of, and the Substitute Lender shall purchase and assume, all
rights and claims of such Affected Lender under the Loan Documents with respect
to such Facility, except that the Affected Lender shall retain such rights
expressly providing that they survive the repayment of the Obligations and
the
termination of the Commitments, (B) the Substitute Lender shall become a
“Lender”
hereunder having a Commitment in such Facility in the amount of such Affected
Lender’s Commitment in such Facility and (C) the Affected Lender shall execute
and deliver to the Administrative Agent an Assignment to evidence such
substitution and deliver any Note in its possession with respect to such
Facility; provided,
however,
that
the failure of any Affected Lender to execute any such Assignment or deliver
any
such Note shall not render such sale and purchase (or the corresponding
assignment) invalid.
ARTICLE
III
CONDITIONS
TO LOANS AND LETTERS OF CREDIT
Section 3.1 Conditions
Precedent to Initial Loans and Letters of Credit.
The
obligation of each Lender to make any Loan on the Closing Date and the
obligation of each L/C Issuer to Issue any Letter of Credit on the Closing
Date is subject to the satisfaction or due waiver of each of the following
conditions precedent on or before November 30, 2006:
(a) Certain
Documents.
The
Administrative Agent shall have received on or prior to the Closing Date each
of
the following, each dated the Closing Date unless otherwise agreed by each
Agent, in form and substance satisfactory to each Agent and each
Lender:
(i) this
Agreement duly executed by the Borrowers and, for the account of each Lender
having requested the same by notice to the relevant Agent and the Parent
received by each at least 3 Business Days prior to the Closing Date (or such
later date as may be agreed by the Parent), Notes in each applicable Facility
conforming to the requirements set forth in Section 2.14(e);
60
(ii) the
Guaranty and Security Agreement and Canadian Security Documents, duly executed
by each Borrower and Guarantor party thereto, together with (A) copies of UCC,
PPSA and other appropriate search reports and of all effective prior filings
listed therein, together with evidence of the termination of such prior filings
and other documents with respect to the priority of the security interest of
the
Administrative Agent in the Collateral, in each case as may be reasonably
requested by the Administrative Agent, and (B) all Control Agreements that,
in
the reasonable judgment of the Administrative Agent, are required for the Loan
Parties to comply with the Loan Documents as of the Closing Date, each duly
executed by, in addition to the applicable Loan Party, the applicable financial
institution;
(iii) a
Mortgage for the Eligible Real Property, together with all Mortgage Supporting
Documents relating thereto;
(iv) duly
executed favorable opinions of counsel to the Loan Parties from (a) ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇▇▇▇, general counsel to the Parent, (b) ▇▇▇▇▇▇▇▇ & Knight LLP,
special U.S. counsel to the Group Members, and (c) Fraser
▇▇▇▇▇▇ Casgrain LLP,
special
Canadian counsel to the Group Members, each addressed to the Agents, the L/C
Issuers and the Lenders and addressing such matters as the Administrative Agent
may reasonably request;
(v) a
copy of
each Governing Document of each Loan Party that is on file with any Governmental
Authority in any jurisdiction, certified as of a recent date by such
Governmental Authority, together with, if applicable, certificates attesting
to
the good standing of such Loan Party in such jurisdiction and each other
jurisdiction where such Loan Party is qualified to do business as a foreign
entity or where such qualification is necessary (and, if appropriate in any
such
jurisdiction, related tax certificates);
(vi) a
certificate of the secretary or other Responsible Officer of each Loan Party
in
charge of maintaining Books and records of such Loan Party certifying as to
(A)
the names and signatures of each officer of such Loan Party authorized to
execute and deliver any Loan Document, (B) the Governing Documents of such
Loan
Party attached to such certificate are complete and correct copies of such
Governing Documents as in effect on the date of such certification (or, for
any
such Governing Document delivered pursuant to clause
(v)
above,
that there have been no changes from such Governing Document so delivered)
and
(C) the resolutions of such Loan Party’s board of directors or other appropriate
governing body approving and authorizing the execution, delivery and performance
of each Loan Document to which such Loan Party is a party;
(vii) a
certificate of a Responsible Officer of the Parent to the effect that (A) each
condition set forth in Section 3.2(b)
has been
satisfied and (B) both the Loan Parties taken as a whole and the Borrowers
are Solvent after giving effect to the initial Loans and Letters of Credit,
the
consummation of the Related Transactions, the application of the proceeds
thereof in accordance with Section 7.14
and the
payment of all estimated legal, accounting and other fees and expenses related
hereto and;
61
(viii) insurance
certificates in form and substance satisfactory to the Administrative Agent
demonstrating that the insurance policies required by Section 6.4
are in
full force and effect and have all endorsements required by such Section 6.4;
(ix) the
Corporate Chart;
(x) the
Perfection Certificate; and
(xi) such
other documents and information as any Lender through the Administrative Agent
or the Canadian Agent may reasonably request.
(b) Fee
and Expenses.
There
shall have been paid to the Administrative Agent, for the account of the
Administrative Agent, its Related Persons, any L/C Issuer or any Lender, as
the
case may be, all fees and all reimbursements of costs or expenses, in each
case
due and payable under any Loan Document on or before the Closing
Date.
(c) Consents.
Each
Group Member shall have received all consents and authorizations required
pursuant to any material Contractual Obligation with any other Person and shall
have obtained all Permits of, and effected all notices to and filings with,
any
Governmental Authority, in each case, as may be necessary in connection with
the
consummation of the transactions contemplated in any Loan Document or Related
Document (including the Related Transactions).
(d) Cash
Management.
The
Administrative Agent shall have received evidence that, as of the Closing Date,
the procedures with respect to cash management required by the Loan Documents
have been established and are currently being maintained by each Loan Party,
together with Control Agreements executed by such Loan Party in connection
therewith.
(e) Refinancing
of Existing Credit Agreement.
(i) All obligations under the Existing Credit Agreement shall have been
repaid in full, (ii) the Existing Credit Agreement and all Loan Documents
(as defined therein) shall have been terminated on terms satisfactory to the
Administrative Agent and (iii) the Administrative Agent shall have received
a payoff letter duly executed and delivered by the Borrowers and the Existing
Agent or other evidence of such termination in each case in form and substance
satisfactory to the Administrative Agent.
(f) Adjusted
Availability Requirement.
The
Borrowers shall have Adjusted Availability of not less than
$30,000,000.
(g) Initial
Appraisals.
The
Administrative Agent shall have received appraisals, conducted by appraisers
retained by the Administrative Agent, of all inventory of the Borrowers and
the
Eligible Real Property, each in form and substance satisfactory to the
Administrative Agent.
Section 3.2 Conditions
Precedent to Each Loan and Letter of Credit.
The
obligation of each Lender on any date (including the Closing Date) to make
any
Loan and of each L/C Issuer on any date (including the Closing Date) to Issue
any Letter of Credit is subject to the satisfaction of each of the following
conditions precedent:
62
(a) Request.
The
relevant Agent (and, in the case of any Issuance, the relevant L/C Issuer)
shall
have received, to the extent required by Article II,
a
written, timely and duly executed and completed Notice of Borrowing, Swingline
Request or, as the case may be, L/C Request.
(b) Representations
and Warranties; No Defaults.
The
following statements shall be true on such date, both before and after giving
effect to such Loan or, as applicable, such Issuance: (i) the representations
and warranties set forth in any Loan Document shall be true and correct in
all
material respects on and as of such date or, to the extent such representations
and warranties expressly relate to an earlier date, on and as of such earlier
date and (ii) no Default shall be continuing.
The
representations and warranties set forth in any Notice of Borrowing, Swingline
Request or L/C Request (or any certificate delivered in connection therewith)
shall be deemed to be made again on and as of the date of the relevant Loan
or
Issuance and the acceptance of the proceeds thereof or of the delivery of the
relevant Letter of Credit.
Section 3.3 Determinations
of Initial Borrowing Conditions.
For
purposes of determining compliance with the conditions specified in Section 3.1,
each
Lender shall be deemed to be satisfied with each document and each other matter
required to be satisfactory to such Lender unless, prior to the Closing Date,
the Administrative Agent receives notice from such Lender specifying such
Lender’s objections and such Lender has not made available its Pro Rata Share of
any Borrowing scheduled to be made on the Closing Date.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
To
induce
the Lenders, the L/C Issuers and the Administrative Agent to enter into the
Loan
Documents, each Borrower (and, to the extent set forth in any other Loan
Document, each other Loan Party) represents and warrants, in all material
respects, to each of them each of the following on and as of each date
applicable pursuant to Section
3.2:
Section 4.1 No
Encumbrances.
Each
Group Member (a) has good and valid title to its personal property assets and
good and marketable title to its owned Real Property (subject to exceptions
that
do not, in the aggregate, materially impair the use of the personal property
and
Real Property of Borrowers taken as a whole), and in the case of the Collateral,
free and clear of Liens except for Permitted Liens. All other information set
forth on the Perfection Certificates pertaining to the Collateral is accurate
and complete. There has been no change in any of such information since the
date
on which the Perfection Certificates were signed by Borrowers except as
otherwise permitted under this Agreement.
Section 4.2 Accounts.
The
Eligible Accounts are bona fide existing payment obligations of Account Debtors
created by the sale and delivery of inventory or the rendition of services
to
such Account Debtors in the ordinary course of Borrowers’ business, owed to
Borrowers without any known defenses, disputes, offsets, counterclaims, or
rights of return or cancellation (other than contingent customer rights of
return arising in the ordinary course of business). As to each Account that
is
identified by Parent as an Eligible Credit Card Receivable in a Borrowing Base
Certificate submitted to the Administrative Agent, such Account is not excluded
as ineligible by virtue of one or more of the excluding criteria set forth
in
the definition of Eligible Credit Card Receivable.
63
Section 4.3 Eligible
Inventory.
All
Eligible Inventory is of good and merchantable quality, free from known defects
(other than saleable clearance goods arising in the ordinary course of business
consistent with past practice). As to each item of inventory that is identified
by Parent as Eligible Inventory in a Borrowing Base Certificate submitted to
the
Administrative Agent, such inventory is not excluded as ineligible by virtue
of
one or more of the excluding criteria set forth in the definition of Eligible
Inventory.
Section 4.4 Location
of Inventory.
The
inventory of each Group Member is stored or located only at, or in-transit
between, the locations identified on Schedule
4(a)
of the
Perfection Certificates or is stored with a bailee, warehouseman, or similar
party, subject to a Bailee Acknowledgement or Collateral Access Agreement,
except as otherwise permitted pursuant to Section
6.5
from
September 1 to December 31 of any Fiscal Year. Other than with respect to
Eligible In-Transit Inventory, all of the Eligible Inventory of each Group
Member is used or held for use in such Group Member’s business and is fit for
such purposes.
Section 4.5 Inventory
Records.
Each
Borrower keeps correct and accurate records itemizing and describing the type,
quality, and quantity of its and its Subsidiaries’ inventory and the book value
thereof.
Section 4.6 Name,
Jurisdiction of Incorporation; Location of Chief Executive Office; FEIN;
Organizational ID Number.
(a)
The
legal name and jurisdiction of organization of each Group Member is set forth
on
the Perfection Certificate.
(b) The
chief
executive office of each Group Member is located at the address indicated on
the
Perfection Certificate.
(c) Each
Group Member’s FEIN and organizational identification number, if any, are
identified on the Perfection Certificate.
(d) Each
Borrower has previously delivered to the Administrative Agent a Perfection
Certificate. Each Borrower represents and warrants to the Lender Group that:
(i)
such Borrower’s exact legal name is that indicated on the applicable Perfection
Certificate and on the signature page hereof; (ii) such Borrower is an
organization of the type, and is organized in the jurisdiction, set forth in
the
applicable Perfection Certificate; (iii) the applicable Perfection Certificate
accurately sets forth such Borrower’s organizational identification number or
accurately states that such Borrower has none; (iv) the applicable Perfection
Certificate accurately sets forth such Borrower’s place of business or, if more
than one, its chief executive office, as well as such Borrower’s mailing
address, if different; (v) all other information set forth on the applicable
Perfection Certificate pertaining to such Borrower is accurate and complete
as
of the date hereof; and (vi) there has been no change in any of such information
since the date on which the applicable Perfection Certificate was signed by
such
Borrower.
64
Section 4.7 Due
Organization and Qualification; Subsidiaries.
(a)
Each
Borrower is (i) duly organized and existing and in good standing under the
laws
of the jurisdiction of its organization and (ii) has all requisite corporate
(or
the equivalent company) power to own its property and conduct its business
as
now conducted and as presently contemplated and (iii) qualified to do business
in any state or province where the failure to be so qualified reasonably could
be expected to cause a Material Adverse Effect.
(b) Set
forth
on Schedule
4.7
(as such
Schedule may be updated with the written consent of the Administrative Agent),
is a complete and accurate description of the authorized capital Stock of each
Borrower, by class, and, as of the Closing Date, a description of the number
of
shares of each such class that are issued and outstanding and, other than with
respect to Parent, the owner of such Stock. Other than as described on
Schedule
4.7
and
except for employee and director stock options and deferred director units
there
are no subscriptions, options, warrants, or calls relating to any shares of
each
Borrower’s capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Borrower is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set
forth
on Schedule
4.7
(as such
Schedule may be updated with the written consent of the Administrative Agent),
is a complete and accurate list of each Borrower’s direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the
number of shares of each class of common and preferred Stock authorized for
each
of such Subsidiaries; and (iii) the number and the percentage of the outstanding
shares of each such class owned directly or indirectly by the applicable
Borrower. All of the outstanding capital Stock of each such Subsidiary has
been
validly issued and is fully paid and non-assessable.
(d) Except
as
set forth on Schedule
4.7,
there
are no subscriptions, options, warrants, or calls relating to any shares of
any
Borrower’s Subsidiaries’ capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Group Member
is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of any Borrower’s Subsidiaries’ capital Stock or
any security convertible into or exchangeable for any such capital
Stock.
Section 4.8 Due
Authorization; No Conflict.
(a)
As to
each Borrower, the execution, delivery, and performance by such Borrower of
this
Agreement and the other Loan Documents to which it is a party and the
transactions contemplated hereby and thereby are within the corporate (or the
equivalent) authority of such Borrower and have been duly authorized by all
necessary action on the part of such Borrower.
(b) As
to
each Borrower, the execution, delivery, and performance by such Borrower of
this
Agreement and the other Loan Documents to which it is a party do not and will
not (i) violate any provision of federal, state, or local, statute, law, rule
or
regulation applicable to any Borrower or any order, judgment, decree, writ,
injunction, license or permit of any court or other Governmental Authority
binding on any Borrower unless such violation could not reasonably be expected
to cause a Material Adverse Effect, (ii) violate any provision of the Governing
Documents of any Borrower or require any approval of any Borrower’s interest
holder, (iii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material Contractual
Obligation of any Borrower unless such violation could not reasonably be
expected to cause a Material Adverse Effect or the termination of such contract,
(iv) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of any Borrower, other than Permitted
Liens unless the imposition of such Lien could not reasonably be expected to
cause a Material Adverse Effect, or (v) require any approval of any Person
under
any material Contractual Obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and
effect.
65
(c) Other
than the filing of UCC financing statements, PPSA registration statements and
registrations in Quebec, Canada, the execution, delivery, and performance by
each Borrower of this Agreement and the other Loan Documents to which such
Borrower is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental
Authority, other than consents or approvals that have been obtained and that
are
still in force and effect.
(d) As
to
each Borrower, this Agreement and the other Loan Documents to which such
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Borrower will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited
by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights
generally.
(e) The
Administrative Agent’s Liens are validly created, perfected and first priority
Liens, subject only to Permitted Liens.
Section 4.9 Litigation.
(a)
Other
than those matters disclosed on Schedule
4.9
and
immaterial matters where the amount in controversy is less than $250,000, there
are no actions, suits, or proceedings or investigations pending or, to the
best
knowledge of Borrowers, threatened against any Group Member, except for (a)
matters that are fully covered by insurance (subject to customary deductibles),
and (b) matters arising after the Closing Date, reasonably could not be expected
to result in a Material Adverse Effect.
(b) There
are
no actions, suits, proceedings or investigations pending or, to the best
knowledge of the Borrowers, threatened against any Group Member that question
the validity or enforceability of this Agreement or any other Loan Document
or
any action taken or to be taken by the Borrowers in connection
therewith.
Section 4.10 No
Material Adverse Effect.
All
financial statements relating to any Group Member that have been delivered
by
the Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly
in
all material respects, each Group Member’s financial condition as of the date
thereof and results of operations for the period then ended. There has not
been
a Material Adverse Effect with respect to any Group Member since the date of
the
latest financial statements submitted to the Lender Group on or before the
Closing Date.
Section 4.11 Fraudulent
Transfer.
(a)
The
Group Members, taken as a whole, are Solvent.
(b) No
transfer of property is being made by any Group Member and no obligation is
being incurred by any Group Member in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent
to
hinder, delay, or defraud either present or future creditors of any such Group
Member.
66
Section 4.12 Canadian
Benefit Plans and Canadian Pension Plans.
Bombay
Canada does not maintain or contribute to any Canadian Benefit Plan or Canadian
Pension Plan.
Section 4.13 ERISA.
None of
the Group Members or any of their ERISA Affiliates maintains or contributes,
or
in the prior six years has maintained or contributed, to any Benefit
Plan.
Section 4.14 Environmental
Condition.
Except
as set forth on Schedule
4.14
and
except for other matters that could not reasonably be expected to result in
a
Material Adverse Effect, (a) to the Borrowers’ knowledge, none of the Group
Members’ properties or assets has ever been used by any Group Member, or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such production,
storage, handling, treatment, release or transport was in violation of any
applicable Environmental Law, (b) to the Borrowers’ knowledge, none of the Group
Members’ owned Real Property has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) no Group Member has received notice that a Lien arising
under
any Environmental Law has attached to any revenues or to any Real Property
owned
or operated by any Group Member, and (d) no Group Member has received a summons,
citation, notice, or directive from the Environmental Protection Agency or
any
other federal, state or provincial governmental agency concerning any action
or
omission by any Group Member resulting in the releasing or disposing of
Hazardous Materials into the environment in violation of any applicable
Environmental Law.
Section 4.15 Brokerage
Fees.
No
Group Member has utilized the services of any broker or finder in connection
with obtaining financing from the Lender Group under this Agreement and no
brokerage commission or finders fee is payable by any Group Member in connection
herewith.
Section 4.16 Intellectual
Property.
Each
Group Member owns, or holds licenses in, all Intellectual Property that is
necessary to the conduct of its business as currently conducted, except where
the failure to do so, in the aggregate, would not result in a Material Adverse
Effect.
Section 4.17 Leases.
Except
where the failure to do so would not cause a Material Adverse Effect, the Group
Members enjoy peaceful and undisturbed possession under all leases (including
Capital Leases) material to their business and to which they are a party or
under which they are operating. Except to the extent that such default would
not
cause a Material Adverse Effect, each of such leases is valid and subsisting
and
no material default by any Group Member exists under such lease.
Section 4.18 Deposit
Accounts.
Set
forth on Schedule
8
to the
Perfection Certificate are all deposit accounts and securities accounts of
each
Group Member, including, with respect to each bank or securities intermediary
(i) the name and address of such Person, (ii) the account numbers of the deposit
accounts or securities accounts maintained with such Person and (iii) whether
such account is a “Store Account”, a “Concentration Account” or another account
and if such account is another account, setting forth the purpose of such
account.
Section 4.19 Complete
Disclosure.
All
factual information (taken as a whole) furnished by or on behalf of any Group
Member in writing to the Administrative Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Group
Member in writing to the Administrative Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information
is
dated or certified and not incomplete by omitting to state any fact necessary
to
make such information (taken as a whole) not misleading in any material respect
(other than industry-wide risks normally associated with the types of businesses
conducted by the Group Members) at such time in light of the circumstances
under
which such information was provided. On the Closing Date, the Projections
represent, and as of the date on which any other Projections are delivered
to
the Administrative Agent, such additional Projections represent the Borrowers’
good faith reasonable estimate of the Group Members’ future performance for the
periods covered thereby it being understood that such Projections as to future
events are not to be viewed as facts and that actual results during the period
or period covered by Projections may differ from the projected results and
no
assurance can be given that the Projections will be realized.
67
Section 4.20 Credit
Card Receipts.
Schedule
4.20
sets
forth each of the Borrowers’ Credit Card Issuers, Credit Card Processors and all
arrangements to which the Borrowers are a party with respect to the payment
to
the Borrowers of the proceeds of all credit card charges for sales by the
Borrowers, including a description of each Credit Card Agreement.
Section 4.21 Holding
Company and Investment Company Acts.
No
Group Member is a “holding
company”,
or a
“subsidiary
company”
of
a
“holding
company,
or an
“affiliate”
of
a
“holding
company”,
as
such terms are defined in the Public Utility Holding Company Act of 1935; nor
is
it an “investment
company”,
or an
“affiliated
company”
or
a
“principal
underwriter”
of
an
“investment
company”,
as
such terms are defined in the Investment Company Act of 1940.
Section 4.22 Absence
of Financing Statements, etc.
Except
with respect to Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry or other public office, that purports
to cover, affect or give notice of any present or possible future Lien on any
Collateral.
Section 4.23 Certain
Transactions.
None of
the officers, directors, or employees of any Group Member is presently a party
to any transaction with any Group Member (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real
or personal property to or from, or otherwise requiring payments to or from
any
officer, director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
Section 4.24 Regulations
U and X.
No
Group Member is engaged in principally, or as one of its important activities
in, and no portion of the proceeds of any Borrowing of any Loan is to be used,
and no portion of any Letter of Credit is to be obtained, for the purpose of
purchasing or carrying any “margin
security”
or
“margin
stock”
as
such
terms are used in Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224.
Section 4.25 Labor
Relations.
No
Borrower has been or is presently a party to any collective bargaining or other
labor contract. No event has occurred or circumstance exists which is likely
to
provide the basis for any work stoppage or other labor dispute. The Borrowers
have complied in all material respects with all applicable laws, decrees,
orders, judgments, statutes, laws, rules and regulations relating to employment,
equal employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security and similar
taxes, occupational safety and health, and plant closing including all
applicable provisions of the federal Fair Labor Standards Act, as amended.
There
is not presently pending and, to the Borrowers’ knowledge, there is not
threatened any of the following:
68
(a) any
strike, slowdown, picketing, or work stoppage;
(b) any
proceeding against or affecting the Borrowers relating to the alleged violation
of any applicable law, decree, order, judgment, statute, law, rule or regulation
pertaining to labor relations or before National Labor Relations Board, the
Equal Employment Opportunity Commission, or any comparable governmental body,
organizational activity, or other labor or employment dispute against or
affecting the Borrowers, which, if determined adversely to the Borrowers would
cause a Material Adverse Effect;
(c) any
lockout of any employees by the Borrowers (and no such action is contemplated
by
the Borrowers); or
(d) any
application for the certification of a collective bargaining agent.
Section 4.26 Indebtedness.
Set
forth on Schedule
7.1
is a
true and complete list of all Indebtedness of each Borrower outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately reflects the aggregate principal
amount of such Indebtedness.
Section 4.27 Payment
of Taxes.
All tax
returns, reports and declarations required to be filed by the Borrowers by
any
jurisdiction to which any of them is subject have been timely filed, except
where the failure to so file could not reasonably be expected to have a Material
Adverse Effect. All taxes and other governmental assessments and charges upon
the Borrowers or their properties, assets, income and franchises (including
real
property taxes and payroll taxes) but not subject of a Permitted Protest have
been paid prior to delinquency except where the failure to so pay could not
reasonably be expected to have a Material Adverse Effect. The Borrowers have
set
aside on their books provisions reasonably adequate for the payment of all
taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed
to
be due by the taxing authority of any jurisdiction, and none of the officers
of
any Borrower know of any basis for any such claim. The Borrowers do not intend
to treat any Loans, Letters of Credit and/or related transactions hereunder
as
being a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4).
Section 4.28 Foreign
Assets Control Regulations, Etc.
None of
the requesting or borrowing of the Loans, the requesting or issuance, extension
or renewal of any Credit Instrument or the use of the proceeds of any thereof
will violate the Trading With the Enemy Act (50 USC §1 et seq., as amended) (the
“Trading
With the Enemy Act”)
or any
of the foreign assets control regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign
Assets Control Regulations”)
or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
Reg.
49079 (2001)) (the “Executive
Order”)
and
(b) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).
Furthermore, none of Group Members or any of their Affiliates (a) is or will
become a “blocked person” as described in the Executive Order, the Trading With
the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will
engage in any dealings or transactions, or be otherwise associated, with any
such “blocked person.”
69
Section 4.29 No
Burdensome Obligations; No Defaults.
No
Group Member is a party to any Contractual Obligation, no Group Member has
Governing Documents containing obligations, and, to the knowledge of any Group
Member, there are no applicable Requirements of Law, in each case the compliance
with which would have, in the aggregate, a Material Adverse Effect. No Group
Member (and, to the knowledge of each Group Member, no other party thereto)
is
in default under or with respect to any Contractual Obligation of any Group
Member, other than those that would not, in the aggregate, have a Material
Adverse Effect.
ARTICLE
V
REPORTING
COVENANTS
Each
Borrower (and, to the extent set forth in any other Loan Document, each other
Loan Party) agrees with the Lenders, the L/C Issuers and the Agents to each
of
the following, as long as any Obligation or any Commitment remains outstanding,
the Borrowers shall and shall cause each of their respective Subsidiaries to
do
all of the following:
Section 5.1 Accounting
System; Access.
Maintain a system of accounting that enables the Borrowers to produce financial
statements in accordance with GAAP and maintain records pertaining to the
Collateral that contain information as from time to time reasonably may be
requested by the Administrative Agent. The Borrowers also shall keep an
inventory reporting system that shows all additions, sales, claims, returns,
and
allowances with respect to the inventory. The Borrowers shall further
(a)
maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and
the
properties of its Subsidiaries, contingencies and other reserves and
(b)
at all
times engage independent certified public accountants satisfactory to the
Administrative Agent as the independent certified public accountants of the
Parent and its Subsidiaries and will not permit more than 90 days to elapse
between the cessation of such firm’s (or any successor firm’s) engagement as the
independent certified public accountants of the Parent and its Subsidiaries
and
the appointment in such capacity of a successor firm registered with the Public
Company Accounting Oversight Board.
Section 5.2 Collateral
Reporting.
(a) Provide
the Administrative Agent (and if so requested by the Administrative Agent,
with
copies for each Lender) the documents set forth on Schedule
5.2
in
accordance with the delivery schedule set forth thereon; and
(b) concurrently
with each delivery of a Compliance Certificate pursuant to Section
5.3(a)(iii),
provide
the Administrative Agent (and if so requested by the Administrative Agent,
with
copies for each Lender) with an updated Perfection Certificate illustrating
all
changes to the information set forth in the Perfection Certificate previously
delivered pursuant to Section
3.1(a)(x)
or this
Section
5.2(b)
(including such updates and amendments required by Section
4.4,
4.6,
4.18,
6.5
or
6.18
of this
Agreement or the Guaranty and Security Agreement or any other provision of
any
Loan Document, except if such information is otherwise required to be provided
under this Agreement); provided,
that
delivery of an updated Perfection Certificate shall not cure any Default or
Event of Default occurring as a result of failure of the Group Members to give
any prior notice or obtain any consent required under this
Agreement.
70
Section 5.3 Financial
Statements, Reports, Certificates.
Deliver
to the Administrative Agent, with copies to each Lender:
(a) as
soon
as available, but in any event within 45 days after the end of each of the
11
Fiscal Periods during each of Parent’s Fiscal Years,
(i) a
company
prepared consolidated balance sheet, income statement, and statement of cash
flow covering Parent’s and its Subsidiaries’ operations during such period, in
each case setting forth in comparative form the figures for the corresponding
period in the prior Fiscal Year;
(ii) a
certificate signed by the chief financial officer of Parent to the effect
that:
(A) the
financial statements delivered hereunder have been prepared in accordance with
GAAP (except for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects the financial condition
of Parent and its Subsidiaries;
(B) the
representations and warranties of the Borrowers contained in this Agreement
and
the other Loan Documents are true and correct in all material respects on and
as
of the date of such certificate, as though made on and as of such date (except
to the extent that such representations and warranties relate solely to an
earlier date); and
(C) there
does not exist any condition or event that constitutes a Default or Event of
Default (or, to the extent of any non-compliance, describing such non-compliance
as to which he or she may have knowledge and what action the Borrowers have
taken, are taking, or propose to take with respect thereto).
(iii) a
Compliance Certificate.
(b) As
soon
as available, but in any event within 90 days after the end of each of Parent’s
Fiscal Years, consolidated financial statements of Parent and its Subsidiaries
for each such Fiscal Year, audited by independent certified public accountants
reasonably acceptable to the Administrative Agent and certified by such
accountants to have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income statement, and statement
of cash flow and, a copy of any “final” management letter delivered to Parent,
its board of directors or any committees thereof), together with a certificate
signed by the chief financial officer of Parent certifying as to the matters
set
forth in Section
5.3(a)(ii)(A)-(C)
and a
Compliance Certificate;
71
(c) as
soon
as available, but in any event within 90 days after the end of each of Parent’s
Fiscal Years, copies of the Borrowers’ Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to the
Administrative Agent, in its sole discretion, for the forthcoming Fiscal Year,
on a month by month basis, certified by the chief financial officer of Parent
as
being such officer’s good faith reasonable estimate of the financial performance
of Parent and its Subsidiaries during the period covered thereby, it being
understood that such Projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any
Projections may differ from the projected results and no assurance can be given
that the Projections will be realized;
(d) if
and
when filed by any Borrower,
(i) Form
10-Q
quarterly reports, Form 10-K annual reports, and Form 8-K current
reports;
(ii) any
other
filings made by any Borrower with the SEC;
(iii) upon
request by the Administrative Agent, in its Permitted Discretion, copies of
the
Borrowers’ federal income tax returns, and any amendments thereto, filed with
the Internal Revenue Service; and
(iv) any
other
information that is provided by Parent to its shareholders
generally;
provided,
that
for purposes of this clause (d), any information to be delivered hereunder
shall
be deemed to have been delivered when posted on the Parent’s website or
otherwise made available on the website of the SEC;
(e) as
soon
as a Borrower has knowledge of any event or condition that constitutes a Default
or an Event of Default, notice thereof together with a reasonably detailed
description thereof and a statement of the curative action that the Borrowers
propose to take with respect thereto;
(f) promptly
after the commencement thereof, but in any event within 10 Business Days after
the service of process with respect thereto on any Group Member, notice of
all
actions, suits, or proceedings brought by or against any Group Member before
any
Governmental Authority which, if determined adversely to such Group Member,
reasonably could be expected to result in a Material Adverse Effect;
(g) upon
the
request of the Administrative Agent in its Permitted Discretion, any other
report reasonably requested relating to the financial condition of any Group
Member; provided,
that
such reports shall not be overly burdensome for any Borrower to prepare;
and
(h) as
part
of the Compliance Certificate delivered pursuant to clause (a)(iii) above,
each
in form and substance satisfactory to the Administrative Agent, a certificate
by
the Responsible Officer of the Parent certifying that (i) the Corporate Chart
attached thereto (or the last Corporate Chart delivered pursuant to this
clause
(h))
is
correct and complete as of the date of such Compliance Certificate, (ii) the
Loan Parties have delivered all documents (including an updated Perfection
Certificate as to locations of Collateral) they are required to deliver pursuant
to any Loan Document on or prior to the date of delivery of such Compliance
Certificate and (iii) complete and correct copies of all documents
modifying any term of any Governing Document of any Group Member or any
Subsidiary or joint venture thereof on or prior to the date of delivery of
such
Compliance Certificate have been delivered to the Administrative Agent or are
attached to such certificate.
72
In
addition to the financial statements referred to above, the Borrowers agree
to
deliver financial statements prepared on both a consolidated and consolidating
basis; provided,
that
(a) only Parent’s consolidated financial statements shall be audited, (b)
consolidating financial statements shall be prepared without footnotes, and
(c)
the Borrowers shall only be required to deliver balance sheets and income
statements on a consolidating basis. Parent agrees to cooperate with the
Administrative Agent to allow the Administrative Agent to consult with its
independent certified public accountants if the Administrative Agent reasonably
requests the right to do so (and the Administrative Agent shall notify Parent
as
to the timing of such consultation and permit Parent to be present thereat
or to
otherwise participate therein) and that, in such connection, their independent
certified public accountants are authorized to communicate with the
Administrative Agent and to release to the Administrative Agent whatever
financial information concerning any Group Member that the Administrative Agent
reasonably may request.
Section 5.4 Right
to Inspect; Inventories, Appraisals Audits and Assessments.
(a) The
Administrative Agent (through any of its affiliates or any its or their
respective officers, employees, or agents) shall have the right, from time
to
time hereafter (which shall be at reasonable times following reasonable notice
to Parent, prior to the occurrence of and during the continuation of an Event
of
Default) to (i)
visit
and inspect the property of each Borrower and examine the Books and make copies
or abstracts thereof and to check, test, and appraise the Collateral in order
to
verify the Borrowers’ financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral; (ii)
discuss
the affairs, finances and accounts of each Borrower with the Chief Financial
Officer, the Treasurer or any Assistant Treasurer or any other Persons
designated by such officers and (iii)
communicate directly with any registered certified public accountants (including
the Borrowers’ accountants) of any Borrower, and such accountants shall be
authorized to communicate directly with the Administrative Agent, the Lenders,
the L/C Issuers and their respective affiliates and to disclose to the
Administrative Agent, the Lenders, the L/C Issuers or their respective
affiliates, all financial statements and other documents and information as
they
might have and the Administrative Agent or any Lender or any L/C Issuer
reasonably requests with respect to any Borrower.
(b) Without
limiting the generality of the foregoing:
(i) At
the
Borrowers’ expense, an Approved Inventory Servicer shall conduct physical
inventories at, at least 95% of the Borrowers’ store locations 1 time per Fiscal
Year, and at each of the Borrowers’ distribution centers at least 1 time per
Fiscal Year at such times as shall be determined by the Borrowers with notice
to
the Administrative Agent. The Administrative Agent, at the expense of the
Borrowers, may participate in and/or observe each physical count and/or
inventory of so much of the Collateral as consists of inventory which is
undertaken on behalf of the Borrowers at each of the Borrowers’ distribution
centers and at not more than 10% of the Borrowers’ store locations. The Parent
shall provide the Administrative Agent with the preliminary inventory levels
at
each store of each Borrower within 15 Business Days following the completion
of
such inventory. The Parent, within 45 days following the completion of each
such
physical inventory, in the aggregate, shall provide the Administrative Agent
with an aggregate reconciliation of the results of such inventory and shall
post
such results to Borrowers’ stock ledger and general ledger, as applicable. The
Administrative Agent, in its Permitted Discretion, if Adjusted Availability
is
less than 10% of the Aggregate Borrowing Base, may, and shall at the Required
Lender’s direction, cause 1 additional inventory per Fiscal Year to be taken (at
the expense of Borrowers).
73
(ii) At
the
Borrowers’ expense, upon the request of the Administrative Agent from time to
time, the Borrowers will obtain and deliver to the Administrative Agent, or,
if
the Administrative Agent so elects, will cooperate with the Administrative
Agent
in the Administrative Agent’s obtaining, a report of an independent collateral
auditor satisfactory to the Administrative Agent (which may be affiliated with
one of Lenders) with respect to the Books and Accounts and inventory components
included in the Aggregate Borrowing Base, which report shall indicate whether
or
not the information set forth in the Borrowing Base Certificate most recently
delivered is accurate and complete in all material respects based upon a review
by such auditors of the Accounts (including verification with respect to the
amount, aging, identity and credit of the respective account debtors and the
billing practices of the Borrowers) and inventory (including verification as
to
the value, location and respective types); provided,
however,
that
the Borrowers shall not be obligated to pay for more than 2 commercial finance
exams in any 12 month period unless Adjusted Availability is less than 10%
of
the Aggregate Borrowing Base, in which case, the Borrowers shall be obligated
to
pay for 4 commercial finance exams in such 12 month period; provided,
further,
that
the Borrower shall be obligated to pay for any additional commercial finance
exams conducted in connection with the Borrowers request to add Eligible
Accounts of Wholesale, Accounts with respect to private label credit cards,
or
Accounts with respect to Permitted Acquisitions to the U.S. Borrowing Base.
(iii) The
Administrative Agent may from time to time obtain inventory appraisals conducted
by such appraisers as are satisfactory to the Administrative Agent or conduct
inventory appraisals (in all events, at the Borrowers’ expense). If the
Administrative Agent determines that there have been changes in markdowns,
inventory mix and composition, accounting methods or any other factors affecting
the value of the Collateral, the Administrative Agent may in its Permitted
Discretion have the inventory reappraised by a qualified appraisal company
selected by the Administrative Agent from time to time after the Closing Date
for the purpose of redetermining the Net Liquidation Percentage of the Eligible
Inventory portion of the Collateral and, as a result, redetermining the
Aggregate Borrowing Base; provided,
however,
that
the Borrowers shall not be obligated to pay for more than 2 inventory appraisals
in any 12 month period unless the Adjusted Availability is less than 10% of
the
Aggregate Borrowing Base, in which case, the Borrowers shall be obligated to
pay
for 4 inventory appraisals in such 12 month period; provided,
further,
that
the Borrowers shall be obligated to pay for any additional inventory appraisals
(A)
conducted in connection with the Borrowers request to add inventory with respect
to Permitted Acquisitions to the U.S. Borrowing Base and (B)
with
respect to inventory at a port of entry in a State of the United States or
from
a third party location to a location set forth on Schedule
4(b)
of the
Perfection Certificate.
74
(iv) At
the
Borrowers’ expense, upon the request of the Administrative Agent, the Borrowers
will obtain and deliver to the Administrative Agent, or, if the Administrative
Agent so elects, will cooperate with the Administrative Agent in the
Administrative Agent’s obtaining, 1 real property appraisal in any 12 month
period from an independent real estate appraiser satisfactory to the
Administrative Agent (which may be affiliated with one of Lenders) with respect
to the Eligible Real Property; provided,
however,
that if
the Adjusted Availability is less than 10% of the Aggregate Borrowing Base,
the
Borrowers shall be obligated to pay for 1 “desktop” review of the most recent
real property appraisal; provided,
further,
that
(A) the Borrowers shall be obligated to pay for any real property appraisals
conducted in connection with the Borrowers request to add Eligible Real
Property, or Real Property acquired pursuant to Permitted Acquisitions, to
the
Borrowing Base and (B) any real property appraisal obtained in accordance with
Section
2.8(a)
shall
not be subject to this clause
(iv).
(v) Upon
the
request of the Administrative Agent from time to time, the Borrowers shall
furnish statements and schedules further identifying and describing the
Collateral and such other documents in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail and in
form and reasonably satisfactory to the Administrative Agent.
ARTICLE
VI
AFFIRMATIVE
COVENANTS
Each
Borrower (and, to the extent set forth in any other Loan Document, each other
Loan Party) agrees with the Lenders, the L/C Issuers and the Agents, as long
as
any Obligation or any Commitment remains outstanding, the Borrowers shall and
shall cause each of their respective Subsidiaries to do each of the
following:
Section 6.1 Returns.
Account
for returns of inventory and customer credits and record the effects thereof
on
the general ledger on the same basis and in accordance with the usual and
customary practices of the applicable Borrower, as they exist at the time of
the
execution and delivery of this Agreement except where failure to do so could
not
reasonably be expected to result in a Material Adverse Effect.
Section 6.2 Maintenance
of Properties.
(a) At
all
times preserve and keep in full force and effect each Borrower’s valid existence
and good standing and any rights and franchises material to the Borrowers’
business;
(b) Maintain
and preserve all of their properties which are necessary or useful in the proper
conduct to their business in good working order and condition, ordinary wear
and
tear excepted;
(c) Cause
to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrowers may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times;
(d) Continue
to engage in the businesses of selling home furnishings at the retail and
wholesale level, and related businesses; and
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(e) Comply
at
all times with the provisions of all leases to which it is a party as lessee,
so
as to prevent any loss or forfeiture thereof or thereunder;
provided,
that
nothing in this Section
6.2
shall
prevent the Borrowers from discontinuing the operation and maintenance of any
of
their properties or any of those of its Subsidiaries if such discontinuance
is,
in the judgment of the relevant Borrower, desirable in the conduct of its or
their business and that do not in the aggregate cause a Material Adverse
Effect.
Section 6.3 Taxes.
Cause
all assessments and taxes, whether real, personal, or otherwise, due or payable
by, or imposed, levied, or assessed against the Group Members, or any of their
respective assets to be paid in full, before delinquency or before the
expiration of any extension period, as well as all claims for labor materials
or
supplies that if unpaid might by law become a Lien or charge upon its property,
except to the extent that the validity of such assessment or tax shall be the
subject of a Permitted Protest. The Borrowers will and will cause their
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of them by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish the Administrative Agent with
proof satisfactory to the Administrative Agent indicating that the applicable
Group Member has made such payments or deposits.
Section 6.4 Insurance.
At the
Borrowers’ expense, maintain in full force and effect all policies of insurance
respecting the Group Members’ assets wherever located, covering loss or damage
by fire, theft, explosion, and other hazards and risks and also shall maintain
business interruption, public liability, product liability, property damage,
other casualty, workers’ compensation insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation, all as ordinarily are
insured against by other Persons engaged in the same or similar business and
with financially sound and reputable insurance companies or associations. All
such policies of insurance shall be in such amounts which are customary for
Persons engaged in the same or similar business and with nationally recognized
insurance companies. The Borrowers shall deliver copies of all such policies
to
the Administrative Agent with a satisfactory lender’s loss payable endorsement
naming the relevant Agent as loss payee (with respect to the Collateral) or
additional insured, as appropriate. Each such policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days
prior
written notice to the Administrative Agent in the event of cancellation of
the
policy for any reason whatsoever.
Section 6.5 Location
of Inventory.
Keep
each Group Member’s inventory (other than Eligible In-Transit Inventory) only at
the locations identified on Schedule
4(b)
of the
Perfection Certificate and their chief executive offices only at the locations
identified on Section
2(b)
of the
Perfection Certificate; provided,
however,
that
(a) Parent may amend Section
2(b)
and
Schedule
4(b)
of the
Perfection Certificate so long as such amendment occurs by written notice to
the
Administrative Agent not less than 30 days prior to the date on which such
inventory is moved to such new location or such chief executive office is
relocated, so long as such new location is within the United States or Canada
(other than Eligible In-Transit Inventory), which amendment shall be included
in
any Perfection Certificate delivered pursuant to Section
5.2,
and so
long as, at the time of such written notification, the applicable Borrower
provides any financing statements or other documents necessary to perfect and
continue the Administrative Agent’s Liens on such assets and also provides a
Collateral Access Agreement with respect thereto if such location is a
warehouse, distribution center, fulfillment center, contract warehouse or other
real property (other than a retail store location) leased by a Borrower, and
(b)
each Group Member may keep inventory during the period from September 1 to
December 31 of each year at warehouses leased by such Persons or in a
fulfillment center or contract warehouse, in each case without a Collateral
Access Agreement, in an aggregate amount not to exceed 5% of the Cost of
Eligible Inventory.
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Section 6.6 Compliance
with Laws, Etc.
Comply
with all Requirements of Law, and orders of any Governmental Authority, and
make
all necessary filings with, and give all appropriate notices to, Governmental
Authorities, including the Fair Labor Standards Act and the Americans With
Disabilities Act, and with all Contractual Obligations and Permits, other than
laws, rules, regulations, orders, Contractual Obligations and Permits the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section 6.7 Leases.
Pay
when due all rents and other amounts payable under any leases to which any
Group
Member is a party or by which any Group Member’s properties and assets are
bound, unless such payments are the subject of a Permitted Protest or unless
nonpayment of such rents and other amounts individually or in the aggregate
could not reasonably be expected to result in a Material Adverse
Effect.
Section 6.8 Existence.
At all
times preserve and keep in full force and effect each Group Member’s valid
existence and good standing and any rights and franchises material to their
businesses except as otherwise permitted pursuant to Section
7.4.
Section 6.9 Environmental.
Except
for such Environmental Liens, failures to comply, releases, Environmental
Actions, notices, citations or orders which individually or in the aggregate
could not reasonably be expected to result in a Material Adverse Effect (a)
keep
any property either owned or operated by any Group Member free of any
Environmental Liens or post bonds or other financial assurances sufficient
to
satisfy the obligations or liability evidenced by such Environmental Liens,
(b)
comply with all applicable Environmental Laws and provide to the Administrative
Agent documentation of such compliance which Agent reasonably requests, (c)
promptly notify the Administrative Agent of any release of a Hazardous Material
of any reportable quantity from or onto property owned or operated by any Group
Member and take any Remedial Actions required to ▇▇▇▇▇ said release or otherwise
to come into compliance with applicable Environmental Law, and (d) promptly,
but
in any event within 5 days of its receipt thereof, provide the Administrative
Agent with written notice of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of any Group Member, (ii) commencement of any Environmental Action or notice
that an Environmental Action will be filed against any Group Member, and (iii)
notice of a violation, citation, or other administrative order which reasonably
could be expected to result in a Material Adverse Effect.
Section 6.10 Disclosure
Updates.
Promptly and in no event later than 5 Business Days after obtaining knowledge
thereof, notify the Administrative Agent if any written information, exhibit,
or
report furnished to the Lender Group contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements contained therein not misleading in any material respect (other
than
industry-wide risks normally associated with the types of businesses conducted
by the Group Members) in light of the circumstances in which made; provided,
that
Projections, Perfection Certificates and Schedules furnished to the Lender
Group
shall be deemed to be updated as and when delivered pursuant to and in
accordance with the terms hereof. The foregoing to the contrary notwithstanding,
any notification pursuant to the foregoing provision will not cure or remedy
the
effect of the prior untrue statement of a material fact or omission of any
material fact nor shall any such notification have the affect of amending or
modifying this Agreement, any Perfection Certificate or any of the Schedules
hereto.
77
Section 6.11 Formation
of Subsidiaries; Further Assurances.
(a)
At the
time that any Borrower forms any direct or indirect Subsidiary or acquires
any
direct or indirect Subsidiary after the Closing Date, such Borrower shall (i)
cause such new Subsidiary to provide to the Administrative Agent a joinder
to
this Agreement and the Guaranty and Security Agreement or the Canadian Security
Documents, as applicable, allonges to Notes, and other security documents,
as
well as appropriate UCC-1 financing statements, PPSA or other relevant filings
in such jurisdictions as may be required by the Loan Documents or applicable
Requirements of Law or as the Administrative Agent may otherwise reasonably
request, all in form and substance satisfactory to the Administrative Agent
(including being sufficient to grant the Administrative Agent a first priority
Lien (subject to Permitted Liens) in and to the assets of such newly formed
or
acquired Subsidiary in scope similar to the collateral granted hereunder);
and
(ii) provide to the Administrative Agent all other documentation, including
one
or more opinions of counsel satisfactory to the Administrative Agent, which
in
its opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above. (b)
The
Borrower shall take all other actions necessary or advisable to ensure the
validity or continuing validity of any guaranty for any Obligation or any Lien
securing any Obligation, to perfect, maintain, evidence or enforce any Lien
securing any Obligation or to ensure such Liens have the same priority as that
of the Liens on similar Collateral set forth in the Loan Documents executed
on
the Closing Date (or, for Collateral located outside the United States, a
similar priority acceptable to the Administrative Agent). Any document,
agreement, or instrument executed or issued pursuant to this Section
6.11
shall be
a Loan Document.
Section 6.12 Additional
Collateral Covenants.
Except
for Permitted Liens, be the owners of the Collateral free from any right or
claim of any other Person or any Lien, and shall defend the same against all
claims and demands of all Persons at any time claiming the same or any interests
therein adverse to the Administrative Agent or any Lender. The Borrowers may
grant such allowances, discounts or other adjustments to the Borrowers’ Account
Debtors as the Borrowers may reasonably deem to accord with sound business
practice pursuant to past practices.
Section 6.13 Investment
Proceeds, Etc.
The
proceeds of any funds received by any Borrower whether or not from ordinary
course business operations (including, without limitation, tax refunds, damage
awards, or insurance or condemnation proceeds) with respect to the Collateral
shall be deposited directly into the Cash Collateral Account to be applied
on
account of the Obligations in accordance with Section
2.12
if a
Cash Dominion Event has occurred and is continuing.
Section 6.14 Immediate
Notice to the Administrative Agent.
(a) The
Parent shall provide the Administrative Agent with written notice promptly
upon
the occurrence of any of the following events, which written notice shall state
with reasonable particularity the facts and circumstances of the event for
which
such notice is being given:
78
(i) The
completion of any physical count of all or a material portion of the Borrowers’
inventory (together with a copy of the results thereof certified by the
Parent);
(ii) Any
failure by the Borrowers to pay rent on a timely basis at 20% or more of any
of
the Borrowers’ locations, and as and when such rent payment is due;
(iii) Any
Material Adverse Effect;
(iv) The
occurrence of any Default or Event of Default;
(v) Any
setoff, claims, withholdings or other defenses to which any of the Collateral,
or the Administrative Agent’s rights with respect to the Collateral, are
subject; or
79
(vi) The
obtaining of an organization identification number by any Borrower which did
not
have one on the Closing Date, together with such number.
(b) The
Parent shall:
(i) Provide
the Administrative Agent, when so distributed, with copies of any materials
distributed to the shareholders of any Borrower (provided,
that
for purposes of this clause (i), any materials to be delivered hereunder shall
be deemed to have been delivered when posted on the Parent’s website or
otherwise made available on the website of the SEC);
(ii) Add
the
Administrative Agent as an addressee on all mailing lists maintained by or
for
Borrowers;
(iii) At
the
reasonable request of the Administrative Agent, from time to time, provide
the
Administrative Agent with copies of all requested advertising (including copies
of all print advertising and duplicate tapes of all requested video and radio
advertising);
(iv) At
the
request of the Administrative Agent, provide the Administrative Agent, following
review by the Audit and Finance Committee of the Parent’s Board of Directors,
with a copy of any management letter or similar communications from any
accountant of the Borrowers; and
(v) Provide
the Administrative Agent with details of all credit card arrangements to which
any Group Member is from time to time a party, including details relating to
such Group Member’s compliance with the terms of payment to the applicable the
Cash Collateral Account of the proceeds of all credit card charges for sales
by
such Group Member.
(vi) The
Parent shall provide the Administrative Agent with (a) prior written notice
of
any entity’s becoming or ceasing to be a Subsidiary and (b) prompt written
notice of any entity’s becoming or ceasing to be an Affiliate (other than a
Subsidiary).
Section 6.15 Certain
Subsidiaries.
The
Parent shall not permit ▇▇▇▇▇▇ Street Trading Company and BMAJ, Inc. to engage
in any trade or business or own any assets or incur any Indebtedness to any
Person.
The
Bombay Furniture Company, Inc. shall not engage in any business or activity
other than managing the foreign offices of the Group Members and holding
immaterial assets incidental thereto.
Section 6.16 Further
Assurances.
Cooperate with Lenders and the Administrative Agent and execute such further
instruments and documents as Lenders or the Administrative Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.
Section 6.17 Governing
Documents.
Deliver
to the Administrative Agent complete and correct copies of all documents
modifying any term of any Governing Document of any Group Member or joint
venture thereof on or prior to the date of delivery of any Compliance
Certificate delivered pursuant to Section
5.3(a)(iii).
Section 6.18 Deposit
Accounts; Securities Accounts and Cash Collateral Accounts.
(a) The
Borrowers shall (i) establish and maintain cash management services of a type
and on terms satisfactory to the Administrative Agent at one or more of the
banks (a “Cash
Management Bank”)
set
forth on Schedule 8
of the
Perfection Certificate, (ii) promptly, and in any event no later than the first
Business Day after the date of receipt thereof, cause all Collections of
Borrowers or cash proceeds of Accounts of Borrowers to be deposited only into
Store Accounts or Concentration Accounts, each set forth on Schedule 8
of the
Perfection Certificate and (iii) direct all Cash Management Banks with Store
Accounts to (A) so long as no Cash Dominion Event has occurred and is
continuing, cause all Collections of Borrowers in an amount greater than $50,000
to be transferred no less frequently than twice each week, to and only to,
a
Concentration Account or a Cash Collateral Account, and (B) after the occurrence
and during the continuance of a Cash Dominion Event cause all Collections of
Borrowers in an amount greater than $10,000 then held in each such Store Account
to be transferred no less frequently than once each day to, and only to, a
Concentration Account or a Cash Collateral Account. If, notwithstanding the
provisions of this Section 6.18,
after
the occurrence and during the continuance of a Cash Dominion Event, any Borrower
receives or otherwise has dominion over or control of any Collections, such
Borrower shall hold such Collections in trust for the Administrative Agent
or
the Canadian Agent, as the case may be, and shall not commingle such Collections
with any of Borrowers’ other funds or deposit such Collections in any account of
Borrowers except as instructed by the Administrative Agent or the Canadian
Agent, as the case may be.
(b) Borrowers
shall establish and maintain Control Agreements with the Administrative Agent
or
the Canadian Agent, as applicable, and each Cash Management Bank with respect
to
each Concentration Account. Each such Control Agreement shall provide, among
other things, that after the occurrence and during the continuance of a Cash
Dominion Event, (i) upon notice from the Administrative Agent or the Canadian
Agent, as applicable, the Cash Management Bank will comply with instructions
of
the Administrative Agent or the Canadian Agent, as applicable, directing the
disposition of funds in the Concentration Account without further consent by
Borrowers, (ii) the Cash Management Bank has no rights of setoff or recoupment
or any other claim against the applicable Concentration Account, other than
for
payment of its service fees and other charges directly related to the
administration of such Concentration Account and for returned checks or other
items of payment, and (iii) it immediately will forward by daily sweep all
amounts in the applicable Concentration Accounts to a Cash Collateral Account
designated by the Administrative Agent or the Canadian Agent, as
applicable.
80
(c) Borrowers
shall establish and maintain Credit Card Agreements with the Administrative
Agent or the Canadian Agent, as applicable, and each Credit Card Processor.
Each
such Credit Card Agreement shall provide, among other things, that each such
Credit Card Processor shall transfer all proceeds due with respect to credit
card charges for sales (net of expenses and chargebacks of the Credit Card
Issuer or Credit Card Processor) by Borrowers received by it (or other amounts
payable by such Credit Card Processor) into a designated Concentration Account
on a daily basis. Borrowers shall not attempt to change any direction or
designation set forth in the Credit Card Agreements regarding payment of charges
without the prior written consent of the Administrative Agent or the Canadian
Agent, as applicable.
(d) So
long
as no Cash Dominion Event has occurred and is continuing, the Parent may amend
Schedule 8
of the
Perfection Certificate to add or replace a Cash Management Bank or deposit
account; provided,
however,
that
(i) such prospective Cash Management Bank shall be satisfactory to the
Administrative Agent and the Administrative Agent shall have consented in
writing in advance to the opening of such deposit account with the prospective
Cash Management Bank, and (ii) prior to the time of the opening of any
Concentration Account, Borrowers and such prospective Cash Management Bank
shall
have executed and delivered to the Administrative Agent or the Canadian Agent,
as applicable, a Control Agreement in accordance with clause
(b)
above.
Borrowers shall close any of their deposit accounts (and establish replacement
cash management accounts in accordance with the foregoing sentence) promptly
and
in any event within 30 days of notice from the Administrative Agent or the
Canadian Agent, as applicable, that the creditworthiness of any Cash Management
Bank is no longer acceptable in the Administrative Agent’s or the Canadian
Agent’s reasonable judgment, or as promptly as practicable and in any event
within 60 days of notice from the Administrative Agent or the Canadian Agent,
as
applicable, that the operating performance, funds transfer, or availability
procedures or performance of the Cash Management Bank with respect to
Concentration Accounts or the Administrative Agent’s or the Canadian Agent’s
liability under any Control Agreement with such Cash Management Bank is no
longer acceptable in the Administrative Agent’s or the Canadian Agent’s
reasonable judgment. If, notwithstanding the provisions of this Section 6.18,
after
the occurrence and during the continuance of a Cash Dominion Event, any Borrower
receives or otherwise has dominion over or control of any Collections, such
Borrower shall hold such Collections in trust for the Administrative Agent
or
the Canadian Agent, as applicable, and shall not commingle such Collections
with
any of the Borrowers’ other funds or deposit such Collections in any account of
the Borrowers except as instructed by the Administrative Agent or the Canadian
Agent, as applicable.
81
(e) After
the
occurrence and during the continuance of a Cash Dominion Event, the deposit
accounts shall be cash collateral accounts, with all cash, checks and similar
items of payment in such accounts securing payment of the Obligations, and
in
which Borrowers have granted a Lien on each deposit account to the
Administrative Agent or the Canadian Agent pursuant to the Loan
Documents.
(f) Following
the occurrence of a Cash Dominion Event, the Borrowers agree that they will
not,
and will not permit their Subsidiaries to, transfer assets out of any of their
deposit accounts or securities accounts. Following the occurrence of a Cash
Dominion Event, the Borrowers agree that they will and will cause their
Subsidiaries to take any or all reasonable steps that the Administrative Agent
requests in order for the Administrative Agent to obtain control in accordance
with the UCC with respect to any of its or their securities accounts, deposit
accounts, electronic chattel paper, investment property, and letter-of-credit
rights. No arrangement contemplated hereby or by any Control Agreement in
respect of any deposit accounts, securities accounts or other investment
property shall be modified by Borrowers without the prior written consent of
the
Administrative Agent. Upon the occurrence and during the continuance of a
Default or Event of Default, the Administrative Agent may notify any bank or
securities intermediary to liquidate the applicable deposit account or
securities account or any related investment property maintained or held thereby
and remit the proceeds thereof to a Cash Collateral Account identified by the
Administrative Agent.1
(g) Neither
the Administrative Agent nor the Canadian Agent shall have any responsibility
for, or bear any risk of loss of, any investment or income of any funds in
any
deposit account. From time to time after funds are deposited in any Cash
Collateral Account, the Administrative Agent or the Canadian Agent, as
applicable, may apply funds then held in such Cash Collateral Account to the
payment of Obligations in accordance with Section 2.12.
No
Group Member and no Person claiming on behalf of or through any Group Member
shall have any right to demand payment of any funds held in any Cash Collateral
Account at any time prior to the termination of all Commitments and the payment
in full of all Obligations and, in the case of L/C Cash Collateral Accounts,
the
termination of all outstanding Letters of Credit.
Section 6.19 Release
of Eligible Real Property.
On or
after the date that is 6 months after the Closing Date, following the Parent’s
written request therefor, the Administrative Agent shall release its Lien upon
the Eligible Real Property, at the expense of the Borrowers, so long as (a)
Borrowers shall have provided the Administrative Agent with fifteen (15)
Business Days’ prior notice thereof; (b) Borrowers shall have complied with
Section
2.8(a),
if
applicable; (c) at the time of such request and after giving effect thereto
no
Default or Event of Default shall have occurred and be continuing and (d)
Adjusted Availability at the time of such request and after giving effect
thereto shall be not less than 20% of the Aggregate Borrowing Base on such
date
and for the next two Fiscal Periods succeeding the Fiscal Period in which such
release shall occur.
Section 6.20 [Reserved].
82
Section 6.21 Grant
of Non-Exclusive License.
For the
purpose of enabling the Administrative Agent to exercise the Administrative
Agent’s rights and remedies under Section
8
of this
Agreement and Section
6.1
of the
Guaranty and Security Agreement (including, without limitation, in order to
take
possession of, hold, preserve, process, assemble, prepare for sale, market
for
sale, sell or otherwise dispose of the Collateral) at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies under Section
8
of this
Agreement and Section
6.1
of the
Guaranty and Security Agreement, each U.S. Borrower hereby (a) grants to the
Administrative Agent and its agents, for the benefit of each Secured Party,
a
royalty free, non-exclusive, irrevocable worldwide license, such license being
with respect to the Administrative Agent’s exercise of its rights and remedies
under Section 8
of this
Agreement and Section
6.1
of the
Guaranty and Security Agreement including, without limitation, in connection
with any completion of the manufacture of inventory or any sale or other
disposition of inventory (i) to use, apply, and affix any trademark, trade
name,
logo, or the like in which any U.S. Borrower now or hereafter has rights, (ii)
to use, license or sublicense any Intellectual Property or computer software
now
owned, held or hereafter acquired by such U.S. Borrower, including in such
license access to all media such and to the extent to which any of the licensed
items may be recorded or stored and to all computer software programs such
and
to the extent used for the compilation or print out thereof; provided,
that
each Agent’s use of the property described in clauses
(i)
and
(ii)
above
will comply with all Requirements of Law, and (iii) to use any and all
furniture, fixtures and equipment contained in any premises owned or occupied
by
any U.S. Borrower in connection with the exercise of each Agent’s rights and
remedies under Section
8
of this
Agreement and Section
6.1
of the
Guaranty and Security Agreement, and (b) agrees to provide the Administrative
Agent and/or its agents with access to, and the right to use, any such premises
owned or occupied by any U.S. Borrower.
Section 6.22 Post-Closing
Covenants.
(a) The
Borrowers shall, within 45 days after the Closing Date (or such later date
as
shall be acceptable to the Administrative Agent in its sole discretion), deliver
such Collateral Access Agreements as the Administrative Agent shall request
in
its Permitted Discretion.
(b)
The
Borrowers shall, no later than February 3, 2007 (or such later date as shall
be
acceptable to the Administrative Agent in its Permitted Discretion), deliver
to
the Administrative Agent evidence that (i) the bank account number ▇▇▇▇▇▇▇▇▇▇▇▇
at the Bank of Nova Scotia has been rendered inactive, (ii) the bank account
number ▇▇▇▇▇▇▇▇▇▇▇▇ at the Bank of Nova Scotia either (A) has been rendered
inactive or (B) is functioning solely as a Store Account and all amounts therein
are swept into an account over which there is a Control Agreement and (iii)
all
payments from credit cards and Canadian Store Accounts are swept on a daily
basis into an account at the Royal Bank of Canada over which the Canadian Agent
has a valid perfected Lien pursuant to a Control Agreement.
83
ARTICLE
VII
NEGATIVE
COVENANTS
Each
Borrower (and, to the extent set forth in any other Loan Document, each other
Loan Party) agrees with the Lenders, the L/C Issuers and the Agents, as long
as
any Obligation or any Commitment remains outstanding, no Borrower shall, nor
shall it permit any Group Member to:
Section 7.1 Indebtedness.
Create,
incur, assume, suffer to exist, guarantee, or otherwise become or remain,
directly or indirectly, liable with respect to any Indebtedness,
except:
(a) the
Obligations;
(b) Indebtedness
set forth on Schedule
7.1;
(c) Permitted
Purchase Money Indebtedness;
(d) refinancings,
renewals, or extensions of Indebtedness permitted under clauses
(b)
and
(c)
of this
Section
7.1
(and
continuance or renewal of any Permitted Liens associated therewith) so long
as:
(i) the terms and conditions of such refinancings, renewals, or extensions
do
not, in the Administrative Agent’s Permitted Discretion, materially impair the
prospects of repayment of the Obligations by the Borrowers or materially impair
the Borrowers’ creditworthiness, (ii) such refinancings, renewals, or extensions
do not result in an increase in the then extant principal amount of, or interest
rate with respect to, the Indebtedness so refinanced, renewed, or extended
or
add one or more Borrower as liable with respect thereto if such additional
Borrowers were not liable with respect to the original Indebtedness, (iii)
such
refinancings, renewals, or extensions do not result in a shortening of the
average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, nor are they on terms or conditions, that, taken as a whole, are
materially more burdensome or restrictive to the applicable Borrower, (iv)
if
the Indebtedness that is refinanced, renewed, or extended was subordinated
in
right of payment to the Obligations, then the terms and conditions of the
refinancing, renewal, or extension Indebtedness must include subordination
terms
and conditions that are at least as favorable to the Lender Group as those
that
were applicable to the refinanced, renewed, or extended Indebtedness, and (v)
the Indebtedness that is refinanced, renewed, or extended is not recourse to
any
Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended;
(e) at
any
time following the release of the Eligible Real Property in accordance with
Section
6.19,
Permitted Office Building Indebtedness and all refinancings, renewals, or
extensions thereof (and continuance or renewal or any Permitted Liens associated
therewith);
(f) endorsement
of instruments or other payment items for deposit;
(g) Indebtedness
composing Permitted Investments;
(h) Indebtedness
of a Borrower to another Borrower;
84
(i) Indebtedness
of a Group Member in respect of Hedging Agreements entered into by such Person
with the purpose and effect of fixing interest rates on a principal amount
of
Indebtedness of such Person that is accruing interest at a variable rate;
provided,
that
each such contract is with a counterparty or has a guarantor of the obligation
of the counterparty who at the time the contract is made has long-term
obligations rated A or Aa3 or better, respectively, by S&P and ▇▇▇▇▇’▇;
and
(j) other
unsecured Indebtedness of any Group Member, in an aggregate amount not to exceed
at any time $2,000,000.
Section 7.2 Liens.
Create,
incur, assume, or suffer to exist, directly or indirectly, any Lien on or with
respect to any of its assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted Liens
(including Liens that are replacements of Permitted Liens to the extent that
the
original Indebtedness is refinanced, renewed, or extended under Section
7.1(d) or (e)
and so
long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
Section 7.3 Restrictions
on Negative Pledges and Upstream Limitation.
(a) Enter
into or permit to exist any arrangement or agreement (excluding this Agreement
and the other Loan Documents) which directly or indirectly prohibits any Group
Member from creating, assuming or incurring any Lien upon its properties,
revenues or assets or those of any of their Subsidiaries whether now owned
or
hereafter acquired; or
(b) Enter
into any agreement, contract or arrangement (excluding this Agreement and the
other Loan Documents) restricting the ability of any Subsidiary of any Borrower
to pay or make dividends or distributions in cash or kind to the Borrowers,
to
make loans, advances or other payments of whatsoever nature to the Borrowers,
or
to make transfers or distributions of all or any part of its assets to the
Borrowers;
in
each
case other than (i) restrictions on specific assets which assets are the subject
of Permitted Purchase Money Indebtedness or at any time following the release
of
the Eligible Real Property in accordance with Section
6.19,
Permitted Office Building Indebtedness, (ii) customary anti-assignment
provisions contained in leases and licensing agreements entered into by such
Group Member in the ordinary course of its business and (iii) customary
restrictions contained in asset sale agreements limiting the transfer of such
assets pending the closing of such sale.
Section 7.4 Restrictions
on Fundamental Changes.
(a)
Enter into any merger or consolidation, (b) liquidate, wind up, or dissolve
itself (or suffer any liquidation or dissolution), or (c) convey, sell, lease,
license, assign, transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its assets,
except:
(i) any
Borrower may be merged with or into another Borrower, or be liquidated, wound
up
or dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to any Borrower; provided,
that
(A) at the time of any such event, no Event of Default shall exist or shall
result from such event and (B) in the case of such an event, a Borrower shall
be
the continuing or surviving Person;
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(ii) (A)
any
Subsidiary of a Borrower that is a Domestic Person may be merged with or into
another Subsidiary of a Borrower that is a Domestic Person, or be liquidated,
wound up or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to any Subsidiary of a Borrower that
is
a Domestic Person; provided,
that at
the time of any such event no Event of Default shall exist or shall result
from
such event, and (B) any Subsidiary of a Borrower that is a Domestic Person
may
be merged with and into a Borrower, or be liquidated, wound up or dissolved,
or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series
of
transactions, to any Borrower; provided,
that
(1) at the time of any such event, no Event of Default shall exist or shall
result from such event, (2) a Borrower shall be the continuing or surviving
Person, and (3) the Borrowers shall have obtained the Administrative Agent’s
prior written consent;
(iii) in
connection with (A) sales or closures of stores or distribution centers in
the
normal course of business, and (B) dispositions of inventory and other assets
located at such locations (or used in connection with the operation thereof)
and
related non-depreciated leasehold interests related thereto, in each case on
reasonable terms consistent with such Person’s usual practice in connection with
such sales or closures; provided,
that
the proceeds of such sales and dispositions of inventory closures are used
to
repay or prepay the Obligations pursuant to Section
2.8;
(iv) the
sale,
in one transaction or a series of transactions, of the Bombay Office
Complex;
(v) dispositions
permitted by Section
7.5;
and
(vi) any
other
disposition of assets in any Fiscal Year for full and fair consideration as
long
as the value of such assets does not exceed $1,000,000.
Section 7.5 Disposal
of Assets; Sale and Leaseback.
Other
than Permitted Dispositions, and dispositions permitted by Section
7.4,
convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of any Group Member. The Borrowers will not, and will not permit any
of
their Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby any Group Member shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that
any
Group Member intends to use for substantially the same purpose as the property
being sold or transferred other than (a) sale leaseback transactions (in one
transaction or a series of transactions) in respect of the Bombay Office Complex
and (b) other sale leaseback transactions not to exceed $2,500,000 in the
aggregate at any time.
Section 7.6 Change
Name; Change Governing Documents.
(a)
Change any Group Member’s name, FEIN, organizational identification number, type
of organization, jurisdiction of organization or other legal structure or
relocate any Group Member’s chief executive office to a new location, without
the consent of the Administrative Agent (not to be unreasonably withheld so
long
as, at the time of such request for consent, such Group Member provides any
financing statements necessary to perfect and continue perfected the
Administrative Agent’s Liens or any constitutive documents resulting from such
change); provided,
however,
that a
Group Member may change its name or chief executive office location upon at
least 30 days prior written notice by Parent to the Administrative Agent of
such
change and so long as, at the time of such written notification, such Group
Member provides any financing statements necessary to perfect and continue
perfected the Administrative Agent’s Liens; provided,
further,
that no
Group Member shall change its name, identity or corporate or organizational
structure in any manner that might make any financing statement filed in
connection herewith or any other Loan Document materially misleading within
the
meaning of section 46(4) of the PPSA (or any comparable provision then in
effect) except upon prior written notice to the Administrative Agent and after
the Administrative Agent’s written acknowledgement that any reasonable action
requested by the Administrative Agent in connection therewith, including to
continue the perfection of any Liens in favor of the Administrative Agent,
on
behalf of the Lenders; or
86
(b)
Change, waive or otherwise modify any Governing Document of, or otherwise change
the capital structure of, any Group Member (including the terms of any of their
outstanding Stock or Stock Equivalents), in each case except for those
modifications and waivers that (i) do not elect, or permit the election, to
treat the Stock Equivalents of any limited liability company (or similar entity)
as certificated and (ii) do not materially affect the rights and privileges
of
any Group Member and do not materially affect the interests of any Secured
Party
under the Loan Documents or in the Collateral.
Section 7.7 Prepayments
and Amendments.
Except
in connection with a refinancing permitted by Section
7.1(d),
(a) prepay,
redeem, defease, purchase, or otherwise acquire any Indebtedness of any Group
Member, other than the Obligations in accordance with this Agreement;
or
(b) directly
or indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Section
7.1(b)
or
(c).
Section 7.8 Consignments.
Consign
any of their inventory or sell any of their inventory on ▇▇▇▇ and hold, sale
or
return, sale on approval, or other conditional terms of sale, except for (a)
consignments of inventory not to exceed the aggregate Cost amount of $1,000,000
at any time, and (b) rights of purchasers to return inventory pursuant to any
Group Member’s return policy.
Section 7.9 Distributions.
Other
than distributions or declaration and payment of dividends by a Borrower to
another Borrower, make any distribution or declare or pay any dividends (in
cash
or other property, other than common Stock or options or rights with respect
to
common Stock) on, or purchase, acquire, redeem, or retire any of any Borrower’s
Stock, of any class, whether now or hereafter outstanding; provided,
however,
that
(a) the Borrowers may purchase, acquire, redeem or retire any of the Borrowers’
Stock or may pay cash dividends on any Borrowers’ Stock so long as (i) at the
time of such purchase, acquisition redemption, retirement, payment and after
giving effect thereto, no Default or Event of Default shall have occurred and
be
continuing and (ii) immediately after giving effect thereto, Availability shall
be at least equal to $25,000,000 and the Parent shall have delivered to the
Administrative Agent a Compliance Certificate and Projections evidencing the
maintenance of Availability of at least $25,000,000 for the 2 Fiscal Quarters
then ended immediately prior to such purchase, acquisition, redemption or
retirement of any Borrower’s Stock and (b) Borrowers may make distributions or
declare and pay any dividends on and may purchase, acquire, redeem, or retire
any Borrower’s Stock in a substantially contemporaneous exchange for common
Stock or other common equity interests of such Borrower (including as a result
of new issuances of common Stock or common equity interests).
87
Section 7.10 Accounting
Methods.
Modify
or change their Fiscal Year or their method of accounting (other than as may
be
required to conform to GAAP).
Section 7.11 Investments,
Acquisitions.
Except
for Permitted Investments and Permitted Acquisitions, directly or indirectly,
make or acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided,
however,
that
such Investments will be considered Investments permitted by this Section
7.11
only if
all actions have been taken to the satisfaction of the Administrative Agent
to
provide to the Administrative Agent, for the benefit of Lenders and the
Administrative Agent, a first priority perfected security interest in all of
such Investments free of all Liens other than Permitted Liens.
Section 7.12 Transactions
with Affiliates.
Engage
in any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real
or personal property to or from, or otherwise requiring payments to or from
any
such Affiliate or, to the knowledge of the Borrowers, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm’s-length basis in the
ordinary course of business except (a) reasonable and customary fees and other
consideration paid to members of the board of directors of Parent and (b)
compensation and benefit arrangements for officers and other employees of any
Group Member entered into in the ordinary course of business and (c)
transactions among Parent and its wholly-owned Subsidiaries in the ordinary
course of business consistent with past practices. Each Affiliate of the
Borrowers is listed on Schedule
7.12
(as such
Schedule may be updated from time to time).
Section 7.13 Suspension.
Suspend
or go out of a substantial portion of their business, other than in relation
to
Permitted Dispositions or transactions expressly permitted by Sections
7.4
and
7.5.
Section 7.14 Use
of
Proceeds.
Use the
proceeds of the Loans for any purpose other than (a) on the Closing Date, (i)
to
repay in full the outstanding principal, accrued interest, and accrued fees
and
expenses owing to the lenders under the Existing Credit Agreement, and (ii)
to
pay transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, for its lawful and permitted purposes.
Section 7.15 Inventory
with Bailees.
Unless
the Administrative Agent has granted its prior written consent and the Borrowers
have delivered to the Administrative Agent a Bailee Acknowledgment with respect
to the applicable inventory, no inventory shall at any time now or hereafter
be
stored with a bailee, warehouseman, or similar party (other than inventory
located at retail locations).
88
Section 7.16 Store
Openings and Closings.
Other
than in respect of the store closings set forth on Schedule
7.16,
open or
close any location at which the Borrowers maintain, offer for sale or store
any
of the Collateral unless the Borrowers have provided the Administrative Agent
at
least 30 days’ prior written notice of such opening or closing and (a) in the
case of any such opening, such opening results in no more than a 24 store
difference in the projected store openings set forth in the Projections or
(b)
in the case of any such closing, such closing results in no more than a 24
store
difference in the projected store openings set forth in the
Projections.
Section 7.17 Securities
Accounts.
Establish or maintain any securities account unless the Administrative Agent
shall have received a Control Agreement in respect of such securities account
in
compliance with Section
6.18.
No
Borrower shall transfer assets out of any securities account; provided,
however,
that,
so long as no Cash Dominion Event has occurred and is continuing or would result
therefrom, the Borrowers may use such assets (and the proceeds thereof) to
the
extent not prohibited by this Agreement.
Section 7.18 Deposit
Accounts, Credit Card Agreements, etc.
(a)
Establish any bank accounts, credit card clearinghouse or processors, other
than
those deposit accounts, securities accounts, Credit Card Agreements and other
accounts, all listed on Schedule 8
of the
Perfection Certificate or Schedule 4.20,
without
providing advance written notice to the Administrative Agent, provided that,
in
the case of securities accounts and deposit accounts, the Borrowers shall
provide the Administrative Agent with Control Agreements simultaneously with
the
opening of such new accounts, (b) violate directly or indirectly any Control
Agreement with respect to a Controlled Deposit Account or a Controlled
Securities Account or other bank agency or lock box agreement in favor of the
Administrative Agent for the benefit of the Lender Group with respect to such
account, (c) deposit into any of the payroll accounts listed on Schedule 8
of the
Perfection Certificate any amounts in excess of amounts necessary to pay current
payroll obligations from such accounts or (d) change any direction or
designation relating to any Credit Card Processor.
Section 7.19 Employee
Benefit Plans.
(a) Engage
in
any “prohibited transaction”
within
the meaning of §406 of ▇▇▇▇▇ ▇▇ §▇▇▇▇ of the Code which could reasonably be
expected to result in a Material Adverse Effect; or
(b) permit
any Guaranteed Pension Plan to incur an “accumulated funding deficiency”,
as
such term is defined in §302 of ERISA, whether or not such deficiency is or may
be waived; or
(c) fail
to
contribute to any Guaranteed Pension Plan to an extent which, or terminate
any
Guaranteed Pension Plan in a manner which, could result in the imposition of
a
lien or encumbrance on the assets of any Group Member pursuant to §302(f) or
§4068 of ERISA; or
(d) amend
any
Guaranteed Pension Plan in circumstances requiring the posting of security
pursuant to §307 of ERISA or §401(a)(29) of the Code; or
89
(e) establish,
maintain, contribute to, or have any obligation or liability, contingent or
otherwise, with respect to a Benefit Plan, Canadian Benefit Plan or Canadian
Pension Plan; or
(f) permit
or
take any action which would result in the aggregate benefit liabilities (with
the meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the
value of the aggregate assets of such Plans, disregarding for this purpose
the
benefit liabilities and assets of any such Plan with assets in excess of benefit
liabilities, by more than $250,000.
Section 7.20 Margin
Regulations.
Use all
or any portion of the proceeds of any credit extended hereunder to purchase
or
carry margin stock (within the meaning of Regulation U of the Federal Reserve
Board) in contravention of Regulation U of the Federal Reserve Board.
ARTICLE
VIII
EVENTS
OF
DEFAULT
Section 8.1 Definition.
Each of
the following shall be an Event of Default:
(a) any
Borrower shall fail to pay (i) when due any installment of principal whether
at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment of the Obligations, (ii) when due any L/C Reimbursement
Obligation payable to any L/C Issuer, and (iii) any interest (including any
interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts), fees under any Loan Document or any other Obligation
not set forth in the preceding clauses (i) or (ii) herein (x) so long as any
Cash Dominion Event shall not have occurred, within 5 days after the date due,
and (y) when the same shall be due and payable at any time any Cash Dominion
Event shall have occurred;
(b) (i)
any
Group Member shall fail to comply with any of the provisions contained in
Sections 5.2
(with
respect to delivery of the Borrowing Base Certificate), 6.8,
6.14(a)(iii),
6.14(a)(iv),
6.18,
or
Article
VII;
(ii)
any Group Member shall fail to comply with any of the provisions contained
in
Sections
5.2
(other
than with respect to delivery of the Borrowing Base Certificate) or 6.4
for 5
Business Days, (iii) any Group Member shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents (other
than
those specified elsewhere in this Article VIII)
for 20
days after written notice of such failure has been given to the Parent by the
Administrative Agent; and (iv) any representation or warranty of any Group
Member in this Agreement or any of the other Loan Documents or any Record or
in
any other document or instrument delivered pursuant to or in connection with
this Agreement shall prove to have been false in any material respect upon
the
date when made or deemed to have been made or repeated;
(c) if
any
material portion of any Group Member’s assets is attached, seized, subject to a
writ or distress warrant, levied upon, or comes into the possession of any
third
Person and the same is not discharged for 30 days or more;
(d) if
an
Insolvency Proceeding is commenced by any Group Member;
90
(e) if
an
Insolvency Proceeding is commenced against any Group Member, and any of the
following events occur: (i) the applicable Group Member consents to the
institution of the Insolvency Proceeding against it, (ii) the petition
commencing the Insolvency Proceeding is not timely controverted; provided,
however,
that,
during the pendency of such period, each Lender and the L/C Issuer shall be
relieved of its obligations to extend credit hereunder, (iii) the petition
commencing the Insolvency Proceeding is not dismissed within 60 calendar days
of
the date of the filing thereof; provided,
however,
that,
during the pendency of such period, each Lender and each L/C Issuer shall be
relieved of its obligation to extend credit hereunder, (iv) a trustee,
custodian, liquidator, monitor, receiver or receiver manager is appointed to
take possession of all or any substantial portion of the properties or assets
of, or to operate all or any substantial portion of the business of, any Group
Member, (v) an order for relief shall have been entered therein, (vi) any Group
Member shall generally not pay its debts as such debts become due, shall admit
in writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors or (vii) any Group Member shall take
any
corporate or similar action or any other action to authorize any action
described in clause
(i)
or
(vi)
above;
(f) if
any
Group Member is enjoined, restrained, or in any way prevented by court order
from continuing to conduct all or any material part of its business
affairs;
(g) if
a
notice of Lien, levy, or assessment is filed of record with respect to any
Group
Member’s assets by any Governmental Authority, or if any taxes or debts owing at
any time hereafter to any one or more of such entities becomes a Lien, whether
▇▇▇▇▇▇ or otherwise, upon any Group Member’s assets and the same is not paid
prior to becoming delinquent;
(h) if
any
Group Member suffers the entry against it of a final judgment for the payment
of
money in excess of $1,000,000 (not covered by insurance) and such judgment
is
unstayed and undischarged for a period of thirty consecutive days after the
date
of entry thereof;
(i) if
there
is a default in any material agreement
to which any Group Member is a party relative to such Person’s Indebtedness
involving an aggregate amount of $10,000,000, or more, and such default (i)
occurs at the final maturity of the obligations thereunder, or (ii) results
in a
right by the other party thereto, irrespective of whether exercised, to
accelerate the maturity of the applicable Group Member’s obligations thereunder,
or to terminate such agreement;
(j) if
any
Group Member makes any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of
the
subordination provisions application to such Indebtedness;
(k) if
any of
the Loan Documents shall be cancelled, terminated, revoked or rescinded or
Agents’ Liens the Collateral with a value in excess of $5,000,000 shall cease to
be perfected, or shall cease to have the priority contemplated by the Loan
Documents, in each case otherwise than in accordance with the terms thereof
or
with the express prior written agreement, consent or approval of the Lenders,
or
any action at law, suit or in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of
any
Group Member or any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to
the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
91
(l) any
Borrower or any ERISA Affiliate incurs any liability to the PBGC or a Guaranteed
Pension Plan pursuant to Title IV of ERISA in an aggregate amount exceeding
$1,000,000, or any Borrower or any ERISA Affiliate is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring
aggregate annual payments exceeding $1,000,000, or any of the following occurs
with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or
a
failure to make a required installment or other payment (within the meaning
of
§ 302(f)(1) of ERISA), provided
that the
Administrative Agent determines in its Permitted Discretion that such event
(x)
could be expected to result in liability of any Borrower or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $1,000,000 and (y) could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States District
Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan;
(m) any
Group
Member shall be indicted for a state or federal crime, or any civil or criminal
action shall otherwise have been brought or threatened against any Group Member,
a punishment for which in any such case could include the forfeiture of any
assets of such Group Member not included in the Aggregate Borrowing Base or
any
assets of such Group Member not included in the Aggregate Borrowing Base but
having a fair market value in excess of $5,000,000; or
(n) a
Change
of Control shall occur.
Section 8.2 Remedies.
During
the continuance of any Event of Default, the Administrative Agent may, and,
at
the request of the Required Lenders, shall, in each case by notice to the
Borrowers and in addition to any other right or remedy provided under any Loan
Document or by any applicable Requirement of Law, do each of the following:
(a)
declare all or any portion of the Commitments terminated, whereupon the
Commitments shall immediately be reduced by such portion or, in the case of
a
termination in whole, shall terminate together with any obligation any Lender
may have hereunder to make any Loan and any L/C Issuer may have hereunder to
Issue any Letter of Credit or (b) declare immediately due and payable all or
part of any Obligation (including any accrued but unpaid interest thereon),
whereupon the same shall become immediately due and payable, without
presentment, demand, protest or further notice or other requirements of any
kind, all of which are hereby expressly waived by Parent and the Borrowers
(and,
to the extent provided in any other Loan Document, other Loan Parties);
provided,
however,
that,
effective immediately upon the occurrence of the Events of Default specified
in
Section 8.1(e)(ii),
(x) the
Commitments of each Lender to make Loans and the commitment of each L/C Issuer
to Issue Letters of Credit shall each automatically be terminated and (y) each
Obligation (including in each case any accrued all accrued but unpaid interest
thereon) shall automatically become and be due and payable, without presentment,
demand, protest or further notice or other requirement of any kind, all of
which
are hereby expressly waived by the Borrowers (and, to the extent provided in
any
other Loan Document, any other Loan Party).
92
Section 8.3 Actions
in Respect of Letters of Credit.
At any
time (a) upon the Revolving Credit Termination Date, (b) after the Revolving
Credit Termination Date when the aggregate funds on deposit in L/C Cash
Collateral Accounts shall be less than 103% of the L/C Obligations for all
Letters of Credit at such time and (c) as required by Section 2.12(c),
the
U.S. Borrowers shall pay to the Administrative Agent in immediately available
funds at the Administrative Agent’s office referred to in Section 10.11,
for
deposit in a L/C Cash Collateral Account, the amount required so that, after
such payment, the aggregate funds on deposit in the L/C Cash Collateral Accounts
equals or exceeds 103% of the L/C Obligations for all Letters of Credit at
such
time (not to exceed, in the case of clause
(c)
above,
the payment to be applied pursuant to Section 2.12(c)
to
provide cash collateral for Letters of Credit).
ARTICLE
IX
THE
ADMINISTRATIVE AGENT
Section 9.1 Appointment
and Duties.
(a) Appointment
of Agents.
Each
Lender and each L/C Issuer hereby appoints GE Capital (together with any
successor Administrative Agent pursuant to Section 9.9)
as the
Administrative Agent hereunder and authorizes the Administrative Agent to (i)
execute and deliver the Loan Documents and accept delivery thereof on its behalf
from any Group Member, (ii) take such action on its behalf and to exercise
all
rights, powers and remedies and perform the duties as are expressly delegated
to
the Administrative Agent under such Loan Documents and (iii) exercise such
powers as are reasonably incidental thereto. Each Lender hereby appoints GE
Canada Finance Holding Company (together
with any successor Canadian Agent pursuant to Section 9.9)
as the
Canadian Agent hereunder and authorizes the Canadian Agent to (i) execute and
deliver the Loan Documents and accept delivery thereof on its behalf from any
Group Member, (ii) take such action on its behalf and to exercise all rights,
powers and remedies and perform the duties as are expressly delegated to the
Canadian Agent under such Loan Documents and (iii) exercise such powers as
are
reasonably incidental thereto.
(b) Duties
as Collateral and Disbursing Agent.
Without
limiting the generality of clause
(a)
above,
the Agents shall have the sole and exclusive right and authority (to the
exclusion of the Lenders and L/C Issuers), and are hereby authorized, to
(i) act as the disbursing and collecting agent for the Lenders and the L/C
Issuers with respect to all payments and collections arising in connection
with
the Loan Documents (including in any Insolvency Proceeding described in
Section 8.1(e)(ii)
or any
other bankruptcy, insolvency or similar proceeding), and each Person making
any
payment in connection with any Loan Document to any Secured Party is hereby
authorized to make such payment to the Administrative Agent, in the case of
an
obligation of the U.S. Borrowers, and the Canadian Agent, in the case of an
obligation of Bombay Canada, (ii) file and prove claims and file other documents
necessary or desirable to allow the claims of the Secured Parties with respect
to any Obligation in any proceeding described in Section 8.1(e)(ii)
or any
other bankruptcy, insolvency or similar proceeding (but not to vote, consent
or
otherwise act on behalf of such Secured Party), (iii) act as collateral agent
for each Secured Party for purposes of the perfection of all Liens created
by
such agreements and all other purposes stated therein, (iv) manage, supervise
and otherwise deal with the Collateral, (v) take such other action as is
necessary or desirable to maintain the perfection and priority of the Liens
created or purported to be created by the Loan Documents, (vi) except as may
be
otherwise specified in any Loan Document, exercise all remedies given to the
Administrative Agent, the Canadian Agent and the other Secured Parties with
respect to the Collateral, whether under the Loan Documents, applicable
Requirements of Law or otherwise and (vii) execute any amendment, consent or
waiver under the Loan Documents on behalf of any Lender that has consented
in
writing to such amendment, consent or waiver; provided,
however,
that
the Administrative Agent and the Canadian Agent hereby appoint, authorize and
direct each other, each Lender and L/C Issuer to act as collateral sub-agent
for
the Administrative Agent, the Canadian Agent, the Lenders and the L/C Issuers
for purposes of the perfection of all Liens with respect to the Collateral,
including any deposit account maintained by a Loan Party with, and cash and
Cash
Equivalents held by, such Lender or L/C Issuer, and may further authorize and
direct each other, the Lenders and the L/C Issuers to take further actions
as
collateral sub-agents for purposes of enforcing such Liens or otherwise to
transfer the Collateral subject thereto to the Administrative Agent or the
Canadian Agent, as applicable, and each Lender and L/C Issuer hereby agrees
to
take such further actions to the extent, and only to the extent, so authorized
and directed.
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(c) Limited
Duties.
Under
the Loan Documents, the Administrative Agent and the Canadian Agent (i) is
acting solely on behalf of the Lenders and the L/C Issuers (except to the
limited extent provided in Section 2.14(b)
with
respect to the Register and in Section 9.11),
with
duties that are entirely administrative in nature, notwithstanding the use
of
the defined term “Administrative Agent”, “Canadian Agent” and Agent” the terms
“agent”, “administrative agent” “Canadian agent”, and “collateral agent” and
similar terms in any Loan Document to refer to the Administrative Agent, which
terms are used for title purposes only, (ii) is not assuming any obligation
under any Loan Document other than as expressly set forth therein or any role
as
agent, fiduciary or trustee of or for any Lender, L/C Issuer or any other
Secured Party and (iii) shall have no implied functions, responsibilities,
duties, obligations or other liabilities under any Loan Document, and each
Lender and L/C Issuer hereby waives and agrees not to assert any claim against
the Administrative Agent or the Canadian Agent based on the roles, duties and
legal relationships expressly disclaimed in clauses
(i)
through
(iii)
above.
Section 9.2 Binding
Effect.
Each
Lender and each L/C Issuer agrees that (i) any action taken by the
Administrative Agent, the Canadian Agent, or the Required Lenders (or, if
expressly required hereby, a greater proportion of the Lenders) in accordance
with the provisions of the Loan Documents, (ii) any action taken by the
Administrative Agent or Canadian Agent in reliance upon the instructions of
the
Required Lenders (or, where so required, such greater proportion) and (iii)
the
exercise by the Administrative Agent the Canadian Agent or the Required Lenders
(or, where so required, such greater proportion) of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Secured
Parties.
Section 9.3 Use
of
Discretion.
(a) No
Action without Instructions.
Neither
the Administrative Agent nor the Canadian Agent shall be required to exercise
any discretion or take, or to omit to take, any action, including with respect
to enforcement or collection, except any action it is required to take or omit
to take (i) under any Loan Document or (ii) pursuant to instructions from
the Required Lenders.
(b) Right
Not to Follow Certain Instructions.
Notwithstanding clause
(a)
above,
neither the Administrative Agent nor the Canadian Agent shall be required to
take, or to omit to take, any action (i) unless, upon demand, the
requesting Agent receives an indemnification satisfactory to it from the Lenders
(or, to the extent applicable and acceptable to such Agent, any other Secured
Party) against all Liabilities that, by reason of such action or omission,
may
be imposed on, incurred by or asserted against Agent or any of its Related
Person thereof or (ii) that is, in the opinion of such Agent or its counsel,
contrary to any Loan Document or applicable Requirement of Law.
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Section 9.4 Delegation
of Rights and Duties.
The
Agents may, upon any term or condition it specifies, delegate or exercise any
of
its rights, powers and remedies under, and delegate or perform any of its duties
or any other action with respect to, any Loan Document by or through any
trustee, co-agent, employee, attorney-in-fact and any other Person (including
any Secured Party). Any such Person shall benefit from this Article IX
to the
extent provided by such Agent.
Section 9.5 Reliance
and Liability.
(a)
The
Agents may, without incurring any liability hereunder, (i) treat the payee
of
any Note as its holder until such Note has been assigned in accordance with
Section 10.2(e),
(ii)
rely on the Register to the extent set forth in Section 2.14,
(iii)
consult with any of its Related Persons and, whether or not selected by it,
any
other advisors, accountants and other experts (including advisors to, and
accountants and experts engaged by, any Loan Party) and (iv) rely and act upon
any document and information (including those transmitted by Electronic
Transmission) and any telephone message or conversation, in each case believed
by it to be genuine and transmitted, signed or otherwise authenticated by the
appropriate parties.
(b) None
of
the Agents and their Related Persons shall be liable for any action taken or
omitted to be taken by any of them under or in connection with any Loan
Document, and each Lender, L/C Issuer, and the Borrowers hereby waive and shall
not assert (and each of the Borrowers shall cause each other Loan Party to
waive
and agree not to assert) any right, claim or cause of action based thereon,
except to the extent of liabilities resulting primarily from the gross
negligence or willful misconduct of the relevant Agent or, as the case may
be,
such Related Person (each as determined in a final, non-appealable judgment
by a
court of competent jurisdiction) in connection with the duties expressly set
forth herein. Without limiting the foregoing, the Agents:
(i) shall
not
be responsible or otherwise incur liability for any action or omission taken
in
reliance upon the instructions of the Required Lenders or for the actions or
omissions of any of its Related Persons selected with reasonable care (other
than employees, officers and directors of such Agent, when acting on behalf
of
such Agent);
(ii) shall
not
be responsible to any Secured Party for the due execution, legality, validity,
enforceability, effectiveness, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, any Loan Document;
(iii) makes
no
warranty or representation, and shall not be responsible, to any Secured Party
for any statement, document, information, representation or warranty made or
furnished by or on behalf of any Loan Party or any Loan Party’s Related Person
in connection with any Loan Document or any transaction contemplated therein
or
any other document or information with respect to any Loan Party, whether or
not
transmitted or (except for documents expressly required under any Loan Document
to be transmitted to the Lenders) omitted to be transmitted by the relevant
Agent, including as to completeness, accuracy, scope or adequacy thereof, or
for
the scope, nature or results of any due diligence performed by the Agents in
connection with the Loan Documents; and
95
(iv) shall
not
have any duty to ascertain or to inquire as to the performance or observance
of
any provision of any Loan Document, whether any condition set forth in any
Loan
Document is satisfied or waived, as to the financial condition of any Loan
Party
or as to the existence or continuation or possible occurrence or continuation
of
any Default or Event of Default and shall not be deemed to have notice or
knowledge of such occurrence or continuation unless it has received a notice
from the Borrower, any Lender or L/C Issuer describing such Default or Event
of
Default clearly labeled “notice of default” (in which case the relevant Agent
shall promptly give notice of such receipt to all Lenders);
and,
for
each of the items set forth in clauses (i) through (iv) above, each Lender,
L/C
Issuer and the Borrowers hereby waives and agrees not to assert (and each of
the
Borrowers shall cause each other Loan Party to waive and agree not to assert)
any right, claim or cause of action it might have against the Agents based
thereon.
Section 9.6 Agent
Individually.
The
Agents and their Affiliates may make loans and other extensions of credit to,
acquire Stock and Stock Equivalents of, engage in any kind of business with,
any
Loan Party or Affiliate thereof as though it were not acting as an Agent and
may
receive separate fees and other payments therefor. To the extent the Agents
or
any of their Affiliates makes any Loan or otherwise becomes a Lender hereunder,
it shall have and may exercise the same rights and powers hereunder and shall
be
subject to the same obligations and liabilities as any other Lender and the
terms “Lender”, “Canadian Lender”, “U.S. Lender”, “Required Lender” and any
similar terms shall, except where otherwise expressly provided in any Loan
Document, include, without limitation, the relevant Agent or such Affiliate,
as
the case may be, in its individual capacity as Lender, Canadian Lender or U.S.
Lender or as one of the Required Lenders, respectively.
Section 9.7 Lender
Credit Decision.
Each
Lender and each L/C Issuer acknowledges that it shall, independently and without
reliance upon the Agents, any Lender or L/C Issuer or any of their Related
Persons or upon any document (including the Disclosure Documents) solely or
in
part because such document was transmitted by any Agent or any of its Related
Persons, conduct its own independent investigation of the financial condition
and affairs of each Loan Party and make and continue to make its own credit
decisions in connection with entering into, and taking or not taking any action
under, any Loan Document or with respect to any transaction contemplated in
any
Loan Document, in each case based on such documents and information as it shall
deem appropriate. Except for documents expressly required by any Loan Document
to be transmitted by any Agent to the Lenders or L/C Issuers, the Agents shall
not have any duty or responsibility to provide any Lender or L/C Issuer with
any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any Loan Party
or
any Affiliate of any Loan Party that may come in to the possession of either
Agent or any of its Related Persons.
Section 9.8 Expenses;
Indemnities.
(a)
Each
Lender agrees to reimburse the Agents and each of its Related Persons (to the
extent not reimbursed by any Loan Party) promptly upon demand for such Lender’s
Pro Rata Share with respect to the Facilities of any costs and expenses
(including fees, charges and disbursements of financial, legal and other
advisors and Taxes paid in the name of, or on behalf of, any Loan Party) that
may be incurred by the Agents or any of their Related Persons in connection
with
the preparation, syndication, execution, delivery, administration, modification,
consent, waiver or enforcement (whether through negotiations, through any
work-out, bankruptcy, restructuring or other legal or other proceeding or
otherwise) of, or legal advice in respect of its rights or responsibilities
under, any Loan Document.
96
(b) Each
Lender further agrees to indemnify the Agents and each of their Related Persons
(to the extent not reimbursed by any Loan Party), from and against such Lender’s
aggregate Pro Rata Share with respect to the Facilities of the Liabilities
(including taxes, interests and penalties imposed for not properly withholding
or backup withholding on payments made to on or for the account of any Lender)
that may be imposed on, incurred by or asserted against the Agents or any of
their Related Persons in any matter relating to or arising out of, in connection
with or as a result of any Loan Document, any Related Document or any other
act,
event or transaction related, contemplated in or attendant to any such document,
or, in each case, any action taken or omitted to be taken by any Agent or any
of
its Related Persons under or with respect to any of the foregoing; provided,
however,
that no
Lender shall be liable to any Agent or any of its Related Persons to the extent
such liability has resulted from the gross negligence or willful misconduct
of
such Agent or, as the case may be, such Related Person.
Section 9.9 Resignation
of Administrative Agent or L/C Issuer.
(a) Either
Agent may resign at any time by delivering notice of such resignation to the
Lenders and the Parent, effective on the date set forth in such notice (or
provided such effective date is at least 30 days after the date of such notice).
If an Agent delivers any such notice, the Required Lenders shall have the right
to appoint a successor Administrative Agent or Canadian Agent. If, within 30
days after the retiring Agent has given notice of resignation, no successor
Administrative Agent or Canadian Agent has been appointed by such Lenders that
has accepted such appointment, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent or Canadian Agent, as
applicable from among the relevant Lenders. Each appointment under this
clause
(a)
shall be
subject to the prior consent of the Parent, which may not be unreasonably
withheld but shall not be required during the continuance of a
Default.
(b) Effective
immediately upon its resignation, (i) the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents, (ii) the relevant
Lenders shall assume and perform all of the duties of such Agent until a
successor Agent shall have accepted a valid appointment hereunder, (iii) the
retiring Agent and its Related Persons shall no longer have the benefit of
any
provision of any Loan Document other than with respect to any actions taken
or
omitted to be taken while such retiring Agent was, or because such Agent had
been, validly acting as Administrative Agent or Canadian Agent, as the case
may
be, under the Loan Documents and (iv) subject to its rights under Section 9.3,
the
retiring Administrative Agent shall take such action as may be reasonably
necessary to assign to the successor Administrative Agent its rights as
Administrative Agent under the Loan Documents. Effective immediately upon its
acceptance of a valid appointment as Administrative Agent or Canadian Agent,
as
the case may be, a successor Administrative Agent or Canadian Agent shall
succeed to, and become vested with, all the rights, powers, privileges and
duties of the retiring Administrative Agent or Canadian Agent under the Loan
Documents.
97
(c) Any
L/C
Issuer may resign at any time by delivering notice of such resignation to the
Administrative Agent, effective on the date set forth in such notice or, if
no
such date is set forth therein, on the date such notice shall be effective.
Upon
such resignation, the L/C Issuer shall remain an L/C Issuer and shall retain
its
rights and obligations in its capacity as such (other than any obligation to
Issue Letters of Credit but including the right to receive fees or to have
Lenders participate in any L/C Reimbursement Obligation thereof) with respect
to
Letters of Credit issued by such L/C Issuer prior to the date of such
resignation and shall otherwise be discharged from all other duties and
obligations under the Loan Documents.
Section 9.10 Release
of Collateral or Guarantors.
Each
Lender and L/C Issuer hereby consents to the release and hereby directs the
Administrative Agent and the Canadian Agent, as applicable, to release (or,
in
the case of clause
(b)(ii)
below,
release or subordinate) the following:
(a) any
Subsidiary of a Borrower from its guaranty of any Obligation of any Loan Party
or any Borrower (other than Parent) if all of the Securities of such Person
owned by any Group Member are Sold in a Sale permitted under the Loan Documents
(including pursuant to a waiver or consent), to the extent that, after giving
effect to such Sale, such Person would not be required to guaranty any
Obligations pursuant to Section 6.11
or be a Borrower hereunder;
and
(b) any
Lien
held by an Agent for the benefit of the Secured Parties against (i) any
Collateral that is Sold by a Loan Party in a Sale permitted by the Loan
Documents (including pursuant to a valid waiver or consent), to the extent
all
Liens required to be granted in such Collateral pursuant to Section 6.11
after
giving effect to such Sale have been granted, (ii) any property subject to
a
Lien permitted hereunder in reliance upon Section
7.2
and
(iii) all of the Collateral and all Loan Parties, upon (A) termination of the
Commitments, (B) payment and satisfaction in full of all Loans, all L/C
Reimbursement Obligations and all other Obligations that the Agents have been
notified in writing are then due and payable, (C) deposit of cash collateral
with respect to all contingent Obligations (or, in the case of any L/C
Obligation, a back-up letter of credit has been issued), in amounts and on
terms
and conditions and with parties satisfactory to the Agents and each Indemnitee
that is owed such Obligations and (D) to the extent requested by the Agents,
receipt by the Secured Parties of liability releases from the Loan Parties
each
in form and substance acceptable to the Agent.
Each
Lender and L/C Issuer hereby directs the Agents, and the Agents hereby agree,
upon receipt of reasonable advance notice from the Parent, to execute and
deliver or file such documents and to perform other actions reasonably necessary
to release the guaranties and Liens when and as directed in this Section 9.10.
98
Section 9.11 Additional
Secured Parties.
The
benefit of the provisions of the Loan Documents directly relating to the
Collateral or any Lien granted thereunder shall extend to and be available
to
any Secured Party that is not a Lender or L/C Issuer as long as, by accepting
such benefits, such Secured Party agrees, as among the Administrative Agent
or
the Canadian Agent, as applicable, and all other Secured Parties, that such
Secured Party is bound by (and, if requested by the relevant Agent, shall
confirm such agreement in a writing in form and substance acceptable to the
relevant Agent) this Article IX,
Section 10.8
(Right
of Setoff),
Section 10.9
(Sharing
of Payments)
and
Section 10.20
(Confidentiality)
and the
decisions and actions of the relevant Agent and the Required Lenders to the
same
extent a Lender is bound; provided,
however,
that,
notwithstanding the foregoing, (a) such Secured Party shall be bound by
Section 9.8
only to
the extent of Liabilities, costs and expenses with respect to or otherwise
relating to the Collateral held for the benefit of such Secured Party, in which
case the obligations of such Secured Party thereunder shall not be limited
by
any concept of Pro Rata Share or similar concept, (b) each of the Agents, the
Lenders and the L/C Issuers shall be entitled to act at its sole discretion,
without regard to the interest of such Secured Party, regardless of whether
any
Obligation to such Secured Party thereafter remains outstanding, is deprived
of
the benefit of the Collateral, becomes unsecured or is otherwise affected or
put
in jeopardy thereby, and without any duty or liability to such Secured Party
or
any such Obligation and (c) such Secured Party shall not have any right to
be
notified of, consent to, direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under any Loan
Document.
ARTICLE
X
MISCELLANEOUS
Section 10.1 Amendments,
Waivers, Etc.
(a)
No
amendment or waiver of any provision of any Loan Document (other than the Fee
Letter, the Control Agreements and the L/C Reimbursement Agreement) and no
consent to any departure by any Loan Party therefrom shall be effective unless
the same shall be in writing and signed (i) in the case of an amendment, consent
or waiver to cure any ambiguity, omission, defect or inconsistency or granting
a
new Lien for the benefit of the Secured Parties or extending an existing Lien
over additional property, by the Administrative Agent and the Parent, (ii)
in
the case of any other waiver, or consent, by the Required Lenders (or by the
Administrative Agent with the consent of the Required Lenders) and (3) in the
case of any other amendment, by the Required Lenders (or by the Administrative
Agent with the consent of the Required Lenders) and the Borrowers; provided,
however,
that no
amendment, consent or waiver described in clauses (2)
or
(3)
above
shall, unless in writing and signed by each Lender directly affected thereby
(or
by the Administrative Agent with the consent of such Lender), in addition to
any
other Person the signature of which is otherwise required pursuant to any Loan
Document, do any of the following:
(i) waive
any
condition specified in Section 3.1,
except
any condition referring to any other provision of any Loan
Document;
(ii) increase
the Commitment of such Lender or subject such Lender to any additional
obligation;
(iii) reduce
(including through release, forgiveness, assignment or otherwise) (A) the
principal amount of, the interest rate on, or any obligation of the Borrower
to
repay (whether or not on a fixed date), any outstanding Loan owing to such
Lender, (B) any fee or accrued interest payable to such Lender or (C) if
such Lender is a Revolving Credit Lender, any L/C Reimbursement Obligation
or
any obligation of the Borrowers to repay (whether or not on a fixed date) any
L/C Reimbursement Obligation; provided,
however,
that
this clause
(iii)
does not
apply to (x) any change to any provision increasing any interest rate or
fee during the continuance of an Event of Default or to any payment of any
such
increase, (y) any modification to the definition of Adjusted Availability or
principally used therein or (z) any reduction occurring as a result of a
conversion of any Obligation to a different currency or a change in the manner
or timing of such conversion;
99
(iv) waive
or
postpone any scheduled maturity date or other scheduled date fixed for the
payment, in whole or in part, of principal of or interest on any Loan or fee
owing to such Lender or for the reduction of such Lender’s Commitment;
provided,
however,
that
this clause
(iv)
does not
apply to any change to mandatory prepayments, including those required under
Section 2.8,
or to
the application of any payment, including as set forth in Section 2.12;
(v) except
as
provided in Section 10.9,2
release
all or substantially all of the Collateral or any Borrower or any Guarantor
from
its guaranty of any Obligation of the Borrowers;
(vi) reduce
or
increase the proportion of Lenders required for the Lenders (or any subset
thereof) to take any action hereunder or change the definition of the terms
“Required Lenders”, “Pro Rata Share” or “Pro Rata Outstandings”; or
(vii) amend
Section 9.10,
Section 10.9
or this
Section 10.1;
and
provided,
further,
that
(x) no amendment, waiver or consent shall affect the rights or duties under
any
Loan Document of, or any payment to, any Agent (or otherwise modify any
provision of Article IX
or the
application thereof), the Swingline Lender, the Canadian Swingline Lender,
any
L/C Issuer that has been granted an option pursuant to Section 10.2(f)
unless
in writing and signed by the affected Agent, the Swingline Lender, the Canadian
Swingline Lender, such L/C Issuer or, as the case may be, in addition to any
signature otherwise required and (y) the consent of the Borrowers shall not
be
required to change any order of priority set forth in Section 2.12.
(b) Each
waiver or consent under any Loan Document shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on any Loan Party shall entitle any Loan Party to any notice or
demand in the same, similar or other circumstances. No failure on the part
of
any Secured Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of
any such right preclude any other or further exercise thereof or the exercise
of
any other right.
Section 10.2 Assignments
and Participations; Binding Effect.
(a) Binding
Effect.
This
Agreement shall become effective when it shall have been executed by the
Borrowers, the Canadian Agent and the Administrative Agent and when the relevant
Agent shall have been notified by each Lender and L/C Issuer that such Lender
or
L/C Issuer has executed it. Thereafter, it shall be binding upon and inure
to
the benefit of the Borrowers (in each case except for Article IX),
the
Administrative Agent, the Canadian Agent, each Lender and L/C Issuer and, to
the
extent provided in Section 9.11,
each
other Indemnitee and Secured Party and, in each case, their respective
successors and permitted assigns. None of the Borrowers, the Canadian Agent,
any
L/C Issuer or the Agents (except to a successor Administrative Agent named
pursuant to Section 9.10
or
otherwise to facilitate the transaction contemplated in such Section 9.10)
shall
have the right to assign any rights or obligations hereunder or any interest
herein.
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(b) Right
to Assign.
Each
Lender may sell, transfer, negotiate or assign all or a portion of its rights
and obligations hereunder (including all or a portion of its Commitments and
its
rights and obligations with respect to Loans and Letters of Credit) to (i)
in
the case of the U.S. Lenders, any existing U.S. Lender, (ii) any Affiliate
or
Approved Fund of any such Lender or (iii) any other Person acceptable (which
acceptance shall not be unreasonably withheld or delayed) to the Administrative
Agent (in the case of the U.S. Lenders) or the Canadian Agent (in the case
of
the Canadian Lenders) and, as long as no Event of Default is continuing, the
Parent; provided,
however,
that
(x) such Sales do not have to be ratable between the Facilities but must be
ratable among the obligations owing to and owed by such Lender with respect
to a
Facility and (y) for each Facility, the aggregate outstanding principal amount
(determined as of the effective date of the applicable Assignment) of the Loans,
Commitments and L/C Obligations subject to any such Sale shall be an integral
multiple of $1,000,000, unless such Sale is made to an existing Lender or an
Affiliate or Approved Fund of any existing Lender, is of the assignor’s
(together with its Affiliates and Approved Funds) entire interest in such
Facility or is made with the prior consent of the Borrowers and the
Administrative Agent; provided
further,
that in
the case of an assignment by a Canadian Lender under this Section
10.2(b),
the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder; provided,
that
prior to the occurrence of an Event of Default that is continuing, if such
assignee is a non-resident of Canada for purposes of Part XIII of the ITA in
respect of any payment that may be made by a Loan Party under any Loan Document,
such assignee shall not be entitled to any gross-up payment or indemnification
pursuant to Section
2.17
(Taxes)
from any Loan Party on account of any Canadian withholding taxes (including
interest and penalties in respect thereof) exigible on any such
payment.
(c) Procedure.
The
parties to each Sale made in reliance on clause
(b)
above
(other than those described in clause
(e)
or
(f)
below)
shall execute and deliver to the Administrative Agent or the Canadian Agent,
as
the case may be, (which shall keep a copy thereof) an Assignment, together
with
any existing Note subject to such Sale (or any affidavit of loss therefor
acceptable to the relevant Agent), any tax forms required to be delivered
pursuant to Section 2.17(a)
and
payment by the assignee of an assignment fee in the amount of $3,500. Upon
receipt of all the foregoing, and conditioned upon such receipt and upon the
relevant Agent consenting to such Assignment, from and after the effective
date
specified in such Assignment, the Agents shall record or cause to be recorded
in
the Register the information contained in such Assignment.
(d) Effectiveness.
Effective upon the entry of such record in the Register, (i) such assignee
shall become a party hereto and, to the extent that rights and obligations
under
the Loan Documents have been assigned to such assignee pursuant to such
Assignment, shall have the rights and obligations of a Lender, (ii) any
applicable Note shall be transferred to such assignee through such entry and
(iii) the assignor thereunder shall, to the extent that rights and obligations
under this Agreement have been assigned by it pursuant to such Assignment,
relinquish its rights (except for those surviving the termination of the
Commitments and the payment in full of the Obligations) and be released from
its
obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an
Assignment covering all or the remaining portion of an assigning Lender’s rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto except that each Lender agrees to remain bound by Article IX,
Section 10.8
and
Section 10.9
to the
extent provided in Section 9.11).
101
(e) Grant
of Security Interests.
In
addition to the other rights provided in this Section 10.2,
each
Lender may grant a security interest in, or otherwise assign as collateral,
any
of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans), to (A)
any
federal reserve bank (pursuant to Regulation A of the Federal Reserve Board),
without notice to the Administrative Agent or (B) any holder of, or trustee
for the benefit of the holders of, such Lender’s Securities by notice to the
Administrative Agent; provided,
however,
that no
such holder or trustee, whether because of such grant or assignment or any
foreclosure thereon (unless such foreclosure is made through an assignment
in
accordance with clause
(b)
above),
shall be entitled to any rights of such Lender hereunder and no such Lender
shall be relieved of any of its obligations hereunder.
(f) Participants.
In
addition to the other rights provided in this Section 10.2,
each
Lender may without notice to or consent from the Agents or the Borrowers,
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents (including all its rights and
obligations with respect to the, Revolving Loans and Letters of Credit);
provided,
however,
that,
whether as a result of any term of any Loan Document or of such grant or
participation, (i) no such participant shall have a commitment, or be deemed
to
have made an offer to commit, to make Loans hereunder, and, except as provided
in the applicable option agreement, none shall be liable for any obligation
of
such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights
and obligations of the Loan Parties and the Secured Parties towards such Lender,
under any Loan Document shall remain unchanged and each other party hereto
shall
continue to deal solely with such Lender, which shall remain the holder of
the
Obligations in the Register, except that (A) each such participant shall be
entitled to the benefit of Sections 2.16
and
2.17,
but
only to the extent (x) such participant delivers the tax forms such Lender
is
required to collect pursuant to Section 2.17(a)
and then
only to the extent of any amount to which such Lender would be entitled in
the
absence of any such grant or participation and (y) that prior to an Event of
Default, each such participant in the Canadian Revolving Credit Commitment
that
it is a non-resident of Canada in respect of any payment made by Bombay Canada
to such participant under the Loan Documents for the purposes of Part XIII
of
the ITA shall not be entitled to any payment of any additional amount or
indemnification pursuant to Section
2.17
from any
Loan Party on account of any Canadian withholding taxes (including interest
and
penalties in respect thereof) exigible on any such payment; provided,
however,
that in
no case shall participant have the right to enforce any of the terms of any
Loan
Document, and (iii) the consent of such participant shall not be required
(either directly, as a restraint on such Lender’s ability to consent hereunder
or otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses (iii)
and
(iv)
of
Section 10.1(a)
with
respect to amounts, or dates fixed for payment of amounts, to which such
participant would otherwise be entitled and, except for those described in
Section 10.1(a)(v)
(or
amendments, consents and waivers with respect to Section 9.10
to
release all or substantially all of the Collateral).
102
Section 10.3 Costs
and Expenses.
Any
action taken by any Loan Party under or with respect to any Loan Document,
even
if required under any Loan Document or at the request of any Secured Party,
shall be at the expense of such Loan Party, and no Secured Party shall be
required under any Loan Document to reimburse any Loan Party or Group Member
therefor except as expressly provided therein. In addition, the Borrowers agree
to pay or reimburse upon demand (a) the Agents for all reasonable out-of-pocket
costs and expenses incurred by it or any of its Related Persons in connection
with the investigation, development, preparation, negotiation, syndication,
execution, interpretation or administration of, any modification of any term
of
or termination of, any Loan Document, any commitment or proposal letter
therefor, any other document prepared in connection therewith or the
consummation and administration of any transaction contemplated therein
(including periodic audits in connection therewith and environmental audits
and
assessments), in each case including the reasonable fees, charges and
disbursements of legal counsel to the Agents or such Related Persons, fees,
costs and expenses incurred in connection with Intralinks®
or any
other E-System and allocated to the Facilities by the Agents in its sole
discretion and fees, charges and disbursements of the auditors, appraisers,
printers and other of their Related Persons retained by or on behalf of any
of
them or any of their Related Persons, (b) the Agents for all reasonable costs
and expenses incurred by it or any of its Related Persons in connection with
internal audit reviews, field examinations and Collateral examinations (which
shall be reimbursed, in addition to the out-of-pocket costs and expenses of
such
examiners, at the per diem rate per individual charged by the Agents for its
examiners) and (c) each of the Agents, its Related Persons, and each Lender
and
L/C Issuer for all costs and expenses incurred in connection with (i) any
refinancing or restructuring of the credit arrangements provided hereunder
in
the nature of a “work-out”, (ii) the enforcement or preservation of any right or
remedy under any Loan Document, any Obligation, with respect to the Collateral
or any other related right or remedy or (iii) the commencement, defense, conduct
of, intervention in, or the taking of any other action with respect to, any
proceeding (including any bankruptcy or insolvency proceeding) related to any
Group Member, Loan Document, Obligation or Related Transaction (or the response
to and preparation for any subpoena or request for document production relating
thereto), including reasonable fees and disbursements of counsel (including
allocated costs of internal counsel).
Section 10.4 Indemnities.
(a)
The
Borrowers agree to indemnify, hold harmless and defend the Agents, each Lender,
each L/C Issuer, each Person that each L/C Issuer causes to Issue Letters of
Credit hereunder and each of their respective Related Persons (each such Person
being an “Indemnitee”)
from
and against all Liabilities (including brokerage commissions, fees and other
compensation) that may be imposed on, incurred by or asserted against any such
Indemnitee in any matter relating to or arising out of, in connection with
or as
a result of (i) any Loan Document, any Related Document, any Disclosure
Document, any Obligation (or the repayment thereof), any Letter of Credit,
the
use or intended use of the proceeds of any Loan or the use of any Letter of
Credit, any Related Transaction, or any securities filing of, or with respect
to, any Group Member, (ii) any commitment letter, proposal letter or term sheet
with any Person or any Contractual Obligation, arrangement or understanding
with
any broker, finder or consultant, in each case entered into by or on behalf
of
the Borrowers, any Group Member or any Affiliate of any of them in connection
with any of the foregoing and any Contractual Obligation entered into in
connection with any E-Systems or other Electronic Transmissions, (iii) any
actual or prospective investigation, litigation or other proceeding, whether
or
not brought by any such Indemnitee or any of its Related Persons, any holders
of
Securities or creditors (and including attorneys’ fees in any case), whether or
not any such Indemnitee, Related Person, holder or creditor is a party thereto,
and whether or not based on any securities or commercial law or regulation
or
any other Requirement of Law or theory thereof, including common law, equity,
contract, tort or otherwise, or (iv) any other act, event or transaction
related, contemplated in or attendant to any of the foregoing (collectively,
the
“Indemnified
Matters”);
provided,
however,
that
the Borrowers shall not have any liability under this Section 10.4
to any
Indemnitee with respect to any Indemnified Matter, and no Indemnitee shall
have
any liability with respect to any Indemnified Matter other than (to the extent
otherwise liable), to the extent such liability has resulted from the gross
negligence or willful misconduct of such Indemnitee, as determined by a court
of
competent jurisdiction in a final non-appealable judgment or order. Furthermore,
each Borrower waives and agrees not to assert against any Indemnitee, and shall
cause each other Loan Party to waive and not assert against any Indemnitee,
any
right of contribution with respect to any Liabilities that may be imposed on,
incurred by or asserted against any Related Person.
103
(b) Without
limiting the foregoing, “Indemnified
Matters”
includes all Environmental Liabilities, including those arising from, or
otherwise involving, any property of any Related Person or any actual, alleged
or prospective damage to property or natural resources or harm or injury alleged
to have resulted from any release of Hazardous Materials on, upon or into such
property or natural resource or any property on or contiguous to any real
property of any Related Person, whether or not, with respect to any such
Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any
leasehold mortgage, a mortgagee in possession, the successor-in-interest to
any
Related Person or the owner, lessee or operator of any property of any Related
Person through any foreclosure action, in each case except to the extent such
Environmental Liabilities (i) are incurred solely following foreclosure by
any
Secured Party or following any Secured Party having become the
successor-in-interest to any Loan Party and (ii) are attributable solely to
acts of such Indemnitee.
Section 10.5 Survival.
Any
indemnification or other protection provided to any Indemnitee pursuant to
any
Loan Document (including pursuant to Section 2.17,
Section 2.16,
Article IX,
Section 10.3,
Section 10.4
or this
Section 10.5)
and all
representations and warranties made in any Loan Document shall (A) survive
the termination of the Commitments and the payment in full of other Obligations
and (B) inure to the benefit of any Person that at any time held a right
thereunder (as an Indemnitee or otherwise) and, thereafter, its successors
and
permitted assigns.
Section 10.6 Limitation
of Liability for Certain Damages.
In no
event shall any Indemnitee be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including any loss of profits,
business or anticipated savings). Each Borrower hereby waives, releases and
agrees (and shall cause each other Loan Party to waive, release and agree)
not
to ▇▇▇ upon any such claim for any special, indirect, consequential or punitive
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 10.7 Lender-Creditor
Relationship.
The
relationship between the Lenders, the L/C Issuers and the Agents, on the one
hand, and the Loan Parties, on the other hand, is solely that of lender and
creditor. No Secured Party has any fiduciary relationship or duty to any Loan
Party arising out of or in connection with, and there is no agency, tenancy
or
joint venture relationship between the Secured Parties and the Loan Parties
by
virtue of, any Loan Document or any transaction contemplated
therein.
104
Section 10.8 Right
of Setoff.
Each
Agent, each Lender, each L/C Issuer and each Affiliate (including each branch
office thereof) of any of them is hereby authorized, without notice or demand
(each of which is hereby waived by each Borrower), at any time and from time
to
time during the continuance of any Event of Default and to the fullest extent
permitted by applicable Requirements of Law, to set off and apply any and all
deposits (whether general or special, time or demand, provisional or final)
at
any time held and other Indebtedness, claims or other obligations at any time
owing by the relevant Agent, such Lender, such L/C Issuer or any of their
respective Affiliates to or for the credit or the account of any Borrower
against any Obligation of any Loan Party now or hereafter existing, whether
or
not any demand was made under any Loan Document with respect to such Obligation
and even though such Obligation may be unmatured. Each Agent, each Lender and
each L/C Issuer agrees promptly to notify the Borrowers and the Agents after
any
such setoff and application made by such Lender or its Affiliates; provided,
however,
that
the failure to give such notice shall not affect the validity of such setoff
and
application. The rights under this Section 10.8
are in
addition to any other rights and remedies (including other rights of setoff)
that the Agents, the Lenders and the L/C Issuers and their Affiliates and other
Secured Parties may have.
Section 10.9 Sharing
of Payments, Etc.
If any
Lender, directly or through an Affiliate or branch office thereof, obtains
any
payment of any Obligation of any Loan Party (whether voluntary, involuntary
or
through the exercise of any right of setoff or the receipt of any Collateral
or
“proceeds”
(as
defined under the applicable UCC) of Collateral) other than pursuant to
Sections 2.16,
2.17
and
2.18
and such
payment exceeds the amount such Lender would have been entitled to receive
if
all payments had gone to, and been distributed by, the Agents in accordance
with
the provisions of the Loan Documents, such Lender shall purchase for cash from
other Secured Parties such participations in their Obligations as necessary
for
such Lender to share such excess payment with such Secured Parties to ensure
such payment is applied as though it had been received by the Agents and applied
in accordance with this Agreement (or, if such application would then be at
the
discretion of the Borrowers, applied to repay the Obligations in accordance
herewith); provided,
however,
that
(a) if such payment is rescinded or otherwise recovered from such Lender or
L/C
Issuer in whole or in part, such purchase shall be rescinded and the purchase
price therefor shall be returned to such Lender or L/C Issuer without interest
and (b) such Lender shall, to the fullest extent permitted by applicable
Requirements of Law, be able to exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrowers in the amount of such
participation.
Section 10.10 Marshaling;
Payments Set Aside.
No
Secured Party shall be under any obligation to marshal any property in favor
of
any Loan Party or any other party or against or in payment of any Obligation.
To
the extent that any Secured Party receives a payment from the Borrowers, from
the proceeds of the Collateral, from the exercise of its rights of setoff,
any
enforcement action or otherwise, and such payment is subsequently, in whole
or
in part, invalidated, declared to be fraudulent or preferential, set aside
or
required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligation or part thereof originally intended
to
be satisfied, and all Liens, rights and remedies therefor, shall be revived
and
continued in full force and effect as if such payment had not
occurred.
105
Section 10.11 Notices.
(a) Addresses.
All
notices, demands, requests, directions and other communications required or
expressly authorized to be made by this Agreement shall, whether or not
specified to be in writing but unless otherwise expressly specified to be given
by any other means, be given (i)
in
writing and addressed to:
(A) if
to
Parent or any Borrower, to:
The
Bombay Company, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copy
to:
▇▇▇▇▇▇▇▇
& Knight LLP
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
(B) if
to the
Administrative Agent or the Swingline Lender, to:
General
Electric Capital Corporation
401
▇▇▇▇▇▇▇ 7
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Bombay Account Manager
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copy
to:
General
Electric Capital Corporation
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Bombay Account Manager
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
and:
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
106
(C) if
to the
Canadian Agent or the Canadian Swingline Lender, to:
GE
Canada
Finance Holding Company
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
Attention:
Bombay
Account Manager
Tel:
(▇▇▇)
▇▇▇.▇▇▇▇
Fax:
(▇▇▇)
▇▇▇.▇▇▇▇
with
copy
to:
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
otherwise
to the party to be notified at its address specified on the signature page
of
any applicable Assignment, (ii) posted to Intralinks®
(to
the
extent such system is available and set up by or at the direction of the
Administrative Agent prior to posting) in an appropriate location by uploading
such notice, demand, request, direction or other communication to
▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, faxing it to ▇▇▇-▇▇▇-▇▇▇▇ with an appropriate bar-coded
fax
coversheet or using such other means of posting to Intralinks®
as may
be available and reasonably acceptable to the Administrative Agent prior to
such
posting, (iii) posted to any other E-System set up by or at the direction of
the
Administrative Agent in an appropriate location or (iv) addressed to such other
address as shall be notified in writing (A) in the case of the Borrowers, the
Agents, the Swingline Lender and the Canadian Swingline Lender, to the other
parties hereto and (B) in the case of all other parties, to the Borrowers and
the Administrative Agent. Transmission by electronic mail (including E-Fax,
even
if transmitted to the fax numbers set forth in clause
(i)
above)
shall not be sufficient or effective to transmit any such notice under this
clause
(a)
unless
such transmission is an available means to post to any E-System.
(b) Effectiveness.
All
communications described in clause
(a)
above
and all other notices, demands, requests and other communications made in
connection with this Agreement shall be effective and be deemed to have been
received (i) if delivered by hand, upon personal delivery, (ii) if delivered
by
overnight courier service, one Business Day after delivery to such courier
service, (iii) if delivered by mail, when deposited in the mails, (iv) if
delivered by facsimile (other than to post to an E-System pursuant to
clause
(a)(ii)
or
(a)(iii)
above),
upon sender’s receipt of confirmation of proper transmission, and (v) if
delivered by posting to any E-System, on the later of the date of such posting
in an appropriate location and the date access to such posting is given to
the
recipient thereof in accordance with the standard procedures applicable to
such
E-System; provided,
however,
that no
communications to any Agent pursuant to Article II
or
Article IX
shall be
effective until received by such Agent.
Section 10.12 Electronic
Transmissions.
(a) Authorization.
Subject
to the provisions of Section 10.11(a),
each
Agent, the Borrowers, the Lenders, the L/C Issuers and each of their Related
Persons is authorized (but not required) to transmit, post or otherwise make
or
communicate, in its sole discretion, Electronic Transmissions in connection
with
any Loan Document and the transactions contemplated therein. Each Borrower
and
each Secured Party hereby acknowledges and agrees, and each Borrower shall
cause
each other Group Member to acknowledge and agree, that the use of Electronic
Transmissions is not necessarily secure and that there are risks associated
with
such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.
107
(b) Signatures.
Subject
to the provisions of Section 10.11(a),
(i)(A)
no posting to any E-System shall be denied legal effect merely because it is
made electronically, (B) each E-Signature on any such posting shall be
deemed sufficient to satisfy any requirement for a “signature” and (C) each
such posting shall be deemed sufficient to satisfy any requirement for a
“writing”, in each case including pursuant to any Loan Document, any applicable
provision of any UCC, the federal Uniform Electronic Transactions Act, the
Electronic Signatures in Global and National Commerce Act and any substantive
or
procedural Requirement of Law governing such subject matter, (ii) each such
posting that is not readily capable of bearing either a signature or a
reproduction of a signature may be signed, and shall be deemed signed, by
attaching to, or logically associating with such posting, an E-Signature, upon
which each Secured Party and Loan Party may rely and assume the authenticity
thereof, (iii) each such posting containing a signature, a reproduction of
a
signature or an E-Signature shall, for all intents and purposes, have the same
effect and weight as a signed paper original and (iv) each party hereto or
beneficiary hereto agrees not to contest the validity or enforceability of
any
posting on any E-System or E-Signature on any such posting under the provisions
of any applicable Requirement of Law requiring certain documents to be in
writing or signed; provided,
however,
that
nothing herein shall limit such party’s or beneficiary’s right to contest
whether any posting to any E-System or E-Signature has been altered after
transmission.
(c) Separate
Agreements.
All
uses of an E-System shall be governed by and subject to, in addition to
Section 10.11
and this
Section 10.12,
separate terms and conditions posted or referenced in such E-System and related
Contractual Obligations executed by Secured Parties and Group Members in
connection with the use of such E-System.
(d) Limitation
of Liability.
All
E-Systems and Electronic Transmissions shall be provided “as is” and “as
available”. None of the Agents nor any of their respective Related Persons
warrants the accuracy, adequacy or completeness of any E-Systems or Electronic
Transmission, and each disclaims all liability for errors or omissions therein.
No Warranty of any kind is made by the Agents nor any of their respective
Related Persons in connection with any E-Systems or Electronic Communication,
including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third-party rights or freedom from viruses or other code
defects.
Each
Borrower and each Secured Party agrees (and Borrower shall cause each other
Loan
Party to agree) that the Agents have no responsibility for maintaining or
providing any equipment, software, services or any testing required in
connection with any Electronic Transmission or otherwise required for any
E-System.
Section 10.13 Governing
Law.
This
Agreement, each other Loan Document that does not expressly set forth its
applicable law, and the rights and obligations of the parties hereto and thereto
shall be governed by, and construed and interpreted in accordance with, the
law
of the State of New York.
108
Section 10.14 Jurisdiction.
(a) Submission
to Jurisdiction.
Any
legal action or proceeding with respect to any Loan Document may be brought
in
the courts of the State of New York located in the City of New York, Borough
of
Manhattan, or of the United States of America for the Southern District of
New
York and, by execution and delivery of this Agreement, each Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
(and, to the extent set forth in any other Loan Document, each other Loan Party)
hereby irrevocably waive any objection, including any objection to the laying
of
venue or based on the grounds of forum
non conveniens,
that
any of them may now or hereafter have to the bringing of any such action or
proceeding in such jurisdictions.
(b) Service
of Process.
Each
Borrower (and, to the extent set forth in any other Loan Document, each other
Loan Party) hereby irrevocably waives personal service of any and all legal
process, summons, notices and other documents and other service of process
of
any kind and consents to such service in any suit, action or proceeding brought
in the United States of America with respect to or otherwise arising out of
or
in connection with any Loan Document by any means permitted by applicable
Requirements of Law, including by the mailing thereof (by registered or
certified mail, postage prepaid) to the address of each Borrower specified
in
Section 10.11
(and
shall be effective when such mailing shall be effective, as provided therein).
Each Borrower (and, to the extent set forth in any other Loan Document, each
other Loan Party) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Bombay Canada hereby
irrevocably appoints CT Corporation System, in New York, New York (the
“Process
Agent”),
with
an office on the date hereof at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
as its agent and true and lawful attorney-in-fact in its name, place and stead
to accept on behalf of Bombay Canada and its property service of copies of
the
summons and complaint and any other process which may be served in any such
suit, action or proceeding brought in the State of New York. Such appointment
shall be irrevocable as long as the Loans are outstanding, except that if for
any reason the Process Agent appointed hereby ceases to act as such, Bombay
Canada will, by an instrument reasonably satisfactory to the Administrative
Agent, appoint another Person in the Borough of Manhattan, New York as such
Process Agent subject to the approval of the Administrative Agent (not to be
unreasonably withheld). Bombay Canada hereby further irrevocably consents to
the
service of process in any suit, action or proceeding in said courts by the
mailing thereof by any Agent or any Lender by registered or certified mail,
postage prepaid, at its address set forth beneath its signature hereto. Bombay
Canada covenants and agrees that it shall take any and all reasonable action,
including the execution and filing of any and all documents, that may be
necessary to continue the designation of a Process Agent pursuant to this
Section
10.14(b)
in full
force and effect and to cause the Process Agent to act as such.
(c) Non-Exclusive
Jurisdiction.
Nothing
contained in this Section 10.14
shall
affect the right of the Agents or any Lender to serve process in any other
manner permitted by applicable Requirements of Law or commence legal proceedings
or otherwise proceed against any Loan Party in any other
jurisdiction.
Section 10.15 Waiver
of Jury Trial.
Each
party hereto hereby irrevocably waives trial by jury in any suit, action or
proceeding with respect to, or directly or indirectly arising out of, under
or
in connection with, any Loan Document or the transactions contemplated therein
or related thereto (whether founded in contract, tort or any other theory).
Each
party hereto (A) certifies that no other party and no Related Person 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 the Loan Documents, as applicable, by the mutual waivers and
certifications in this Section 10.15.
109
Section 10.16 Severability.
Any
provision of any Loan Document being held illegal, invalid or unenforceable
in
any jurisdiction shall not affect any part of such provision not held illegal,
invalid or unenforceable, any other provision of any Loan Document or any part
of such provision in any other jurisdiction.
Section 10.17 Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts and by different parties
in separate counterparts, each of which when so executed shall be deemed to
be
an original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart. Delivery of an executed signature page
of
this Agreement by facsimile transmission or Electronic Transmission shall be
as
effective as delivery of a manually executed counterpart hereof.
Section 10.18 Entire
Agreement.
The
Loan Documents embody the entire agreement of the parties and supersede all
prior agreements and understandings relating to the subject matter thereof
and
any prior letter of interest, commitment letter, fee letter, confidentiality
and
similar agreements involving any Loan Party and any of the Agents, any Lender
or
any L/C Issuer or any of their respective Affiliates relating to a financing
of
substantially similar form, purpose or effect. In the event of any conflict
between the terms of this Agreement and any other Loan Document, the terms
of
this Agreement shall govern (unless such terms of such other Loan Documents
are
necessary to comply with applicable Requirements of Law, in which case such
terms shall govern to the extent necessary to comply therewith).
Section 10.19 Use
of
Name.
Each
Borrower agrees, and shall cause each other Loan Party to agree, that it shall
not, and none of its Affiliates shall, issue any press release or other public
disclosure (other than any document filed with any Governmental Authority
relating to a public offering of the Securities of any Loan Party) using the
name, logo or otherwise referring to GE Capital or of any of its Affiliates,
the
Loan Documents or any transaction contemplated therein to which the Secured
Parties are party without at least 2 Business Days’ prior notice to GE
Capital and without the prior consent of GE Capital except to the extent
required to do so under applicable Requirements of Law and then, only after
consulting with GE Capital prior thereto.3
Section 10.20 Non-Public
Information; Confidentiality.
(a)
Each
Lender and L/C Issuer acknowledges and agrees that it may receive material
non-public information hereunder concerning the Loan Parties and their
Affiliates and Securities and agrees to use such information in compliance
with
all relevant policies, procedures and Contractual Obligations and applicable
Requirements of Laws (including United States federal and state security laws
and regulations).
110
(b) Each
Lender, L/C Issuer and Agent agrees to use all reasonable efforts to maintain,
in accordance with its customary practices, the confidentiality of information
obtained by it pursuant to any Loan Document and designated in writing by any
Loan Party as confidential, except that such information may be disclosed (i)
with the Borrowers’ consent, (ii) to Related Persons of such Lender, L/C Issuer
or Agent, as the case may be, or to any Person that any L/C Issuer causes to
Issue Letters of Credit hereunder, that are advised of the confidential nature
of such information and are instructed to keep such information confidential,
(iii) to the extent such information presently is or hereafter becomes available
to such Lender, L/C Issuer or Agent, as the case may be, on a non-confidential
basis from a source other than any Loan Party, (iv) to the extent disclosure
is
required by applicable Requirements of Law or other legal process or requested
or demanded by any Governmental Authority, (v) to the extent necessary or
customary for inclusion in league table measurements or in any tombstone or
other advertising materials (and the Loan Parties consent to the publication
of
such tombstone or other advertising materials by the Agents, any Lender, any
L/C
Issuer or any of their Related Persons), (vi) to the National Association
of Insurance Commissioners or any similar organization, any examiner or any
nationally recognized rating agency or otherwise to the extent consisting of
general portfolio information that does not identify borrowers, (vii) to current
or prospective assignees, grantees of any option described in Section 10.2(f)
or
participants, direct or contractual counterparties to any Hedging Agreement
permitted hereunder and to their respective Related Persons, in each case to
the
extent such assignees, participants, counterparties or Related Persons agree
to
be bound by provisions substantially similar to the provisions of this
Section 10.20
and
(viii) in connection with the exercise of any remedy under any Loan Document.
In
the event of any conflict between the terms of this Section 10.20
and
those of any other Contractual Obligation entered into with any Loan Party
(whether or not a Loan Document), the terms of this Section 10.20
shall
govern.
Section 10.21 Judgment
Currency.
If for
the purpose of obtaining judgment in any court it is necessary to convert a
sum
due hereunder in Dollars into another currency (in this Section 10.21
called
the “judgment
currency”),
the
rate of exchange that shall be applied shall be that at which in accordance
with
normal banking procedures the Agents could purchase such Dollars in New York,
New York with the judgment currency on the Business Day next preceding the
day
on which such judgment is rendered. The obligation of the Borrowers in respect
of any such sum due from it to the Agents or any Lender hereunder (in this
Section 10.21
called
an “Entitled
Person”)
shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by such Entitled Person of any sum adjudged to be due hereunder in
the
judgment currency, such Entitled Person may in accordance with normal banking
procedures purchase and transfer Dollars to New York, New York with the amount
of the judgment currency so adjudged to be due; and the Borrowers hereby, as
a
separate obligation and notwithstanding any such judgment, agrees, to the
fullest extent that it may effectively do so to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in Dollars, the amount
(if
any) by which the sum originally due to such Entitled Person in Dollars
hereunder exceeds the amount of the Dollars so purchased and transferred. If
the
amount of Dollars so purchased exceeds the sum originally due to the Entitled
Person, such Entitled Person shall remit such excess to the
Borrowers.
111
Section 10.22 Patriot
Act Notice.
Each
Lender subject to the USA Patriot Act of 2001 (31 U.S.C. 5318 et seq.) hereby
notifies the Borrowers that, pursuant to Section 326 thereof, it is required
to
obtain, verify and record information that identifies the Borrowers, including
the name and address of the Borrowers and other information allowing such Lender
to identify the Borrowers in accordance with such act.
[SIGNATURE
PAGES FOLLOW]
112
1
Canadian
counsel to provide language for perfection in Canada.
2
Add any
section in any Loan Document that could provide for release of substantially
all
of the Collateral, if any.
3
Reciprocal provision re: use of name of the Borrowers to come.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized, as of the date first above
written.
THE
BOMBAY COMPANY, INC.
as
Parent
and a Borrower
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Senior Vice President, Chief Financial Officer and Treasurer
BBA
HOLDINGS, INC.
as
a
Borrower
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
President
BOMBAY
INTERNATIONAL, INC.
as
a
Borrower
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Vice President
THE
BOMBAY FURNITURE COMPANY OF CANADA INC.
as
a
Borrower
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Vice President
GENERAL
ELECTRIC CAPITAL CORPORATION
as
Administrative Agent, L/C Issuer, Swingline Lender and Lender
|
By:
|
/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Duly Authorized Signatory
GE
CANADA
FINANCE HOLDING COMPANY
as
Canadian Agent and as Canadian Lender
By:/s/
▇▇▇▇ ▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Senior Vice President
SCHEDULE
I
Commitments
U.S.
Revolving Credit Commitment:
General
Electric Capital Corporation $125,000,000
Canadian
Revolving Credit Commitment:
GE
Canada
Finance Holding Company $18,000,000
SCHEDULE
4.7
Subsidiaries
See
attached
SCHEDULE
4.9
Litigation
See
attached
SCHEDULE
4.14
Environmental
Condition
See
attached
SCHEDULE
4.20
Credit
Card Receipts
See
attached
SCHEDULE
5.2
Collateral
Reporting
Borrowers
shall provide Administrative Agent (and if so requested by Administrative Agent,
with copies for each Lender) with the following documents at the following
times
in form satisfactory to Administrative Agent:
(a) Weekly
Reports.
(i) Borrowing
Base Certificate.
If, at
any time, Adjusted Availability is less than 20% of the Aggregate Borrowing
Base, Parent shall provide to Administrative Agent, on Wednesday of each week,
a
signed Borrowing Base Certificate (in the form of Exhibit
I,
as such
form may be revised from time to time by Administrative Agent); provided,
however,
that
Parent, may, in its discretion, provide to Administrative Agent a Borrowing
Base
Certificate more frequently than as set forth herein. Such Certificate may
be
sent to Administrative Agent electronically (with an electronic signature)
or by
facsimile transmission; provided,
further,
that in
each case, upon request by Administrative Agent, the original thereof is
forwarded to Administrative Agent on the date of such transmission. No
adjustments to the Borrowing Base Certificate may be made without supporting
documentation and such other documentation as may be reasonably requested by
Administrative Agent from time to time.
(ii) If,
at
any time, Adjusted Availability is less than 20% of the Aggregate Borrowing
Base, a collateral activity summary or “roll forward” inventory
report.
(b) Monthly
Reports.
Monthly, Parent shall provide to Administrative Agent original counterparts
of
(each in such form as Agent from time to time may specify):
(i) Within
15
days of the end of each Fiscal Period for the immediately preceding Fiscal
Period or on the next Business Day, in the event the 15th day does not fall
on a
Business Day:
(A) at
all
times other than as set forth in clause (a)(i) above, a Borrowing Base
Certificate (in the form of Exhibit
I,
as such
form may be revised from time to time by Agent); provided,
however,
that
Parent, may, in its discretion, provide to Administrative Agent a Borrowing
Base
Certificate more frequently than as set forth herein. Such Borrowing Base
Certificate may be sent to Administrative Agent electronically (with an
electronic signature) or by facsimile transmission; provided,
that in
each case, upon request by Administrative Agent, the original thereof is
forwarded to Administrative Agent on the date of such transmission. No
adjustments to the Borrowing Base Certificate may be made without supporting
documentation and such other documentation as may be reasonably requested by
Administrative Agent from time to time;
(B) Top
10
Vendor Purchases report;
(C) sales
audit report and inventory summary by location and merchandise
class;
(D) inventory
certificate;
(E) state
of
store activity; and
(F) a
collateral activity summary or “roll forward” inventory report.
(ii) Within
45
days of the end of each Fiscal Period for the immediately preceding Fiscal
Period or on the next Business Day, in the event the 45th day does not fall
on a
Business Day:
(A) reconciliation
of the stock ledger to the general ledger and the calculation of Availability;
and
(B) rent,
tax
and insurance compliance certificate.
(iii) For
purposes of items(c)(i) and (c)(ii) above, the first “preceding month” in
respect of which the items required by that Section shall be provided shall
be
October, 2006.
In
addition, each Borrower agrees to use its commercially reasonable efforts to
assist Administrative Agent with the facilitation and implementation of a system
of electronic collateral reporting in order to provide electronic reporting
of
each of the items set forth above.
SCHEDULE
7.1
Existing
Indebtedness
See
attached
SCHEDULE
7.2
Existing
Liens
See
attached
SCHEDULE
7.13
Affiliates
See
attached
SCHEDULE
7.16
Scheduled
Store Closings
See
attached