Exhibit 10.1
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT FOR
THE LENDERS REFERENCED HEREIN
FLEET NATIONAL BANK
AS ISSUER
JPMORGAN BUSINESS CREDIT CORP.
JPMORGAN CHASE BANK
AS CO-AGENTS
GMAC COMMERCIAL FINANCE LLC
AS DOCUMENTATION AGENT
THE CIT GROUP/BUSINESS CREDIT INC.
AS SYNDICATION AGENT
FLEET SECURITIES, INC.
AS ARRANGER
OFFICEMAX, INC.
THE LEAD BORROWER
FOR:
OFFICEMAX, INC.
BIZMART, INC.
BIZMART (TEXAS), INC.
OFFICEMAX CORP.
OMX, INC.
THE BORROWERS
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May 2, 2003
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS:
ARTICLE 2 - THE REVOLVING CREDIT:
2-1. Establishment of Revolving Credit............................................................. 24
2-2. Advances in Excess of Borrowing Base (OverLoans).............................................. 26
2-3. Risks of Value of Collateral.................................................................. 26
2-4. Commitment to Make Revolving Credit Loans and Support Letters of Credit....................... 26
2-5. Revolving Credit Loan Requests................................................................ 26
2-6 Making of Revolving Credit Loans.............................................................. 28
2-7. SwingLine Loans............................................................................... 28
2-8. The Loan Account.............................................................................. 29
2-9. The Revolving Credit Notes.................................................................... 30
2-10. Payment of The Loan Account................................................................... 30
2-11. Interest on Revolving Credit Loans............................................................ 31
2-12 Voluntary Reduction of Commitment and Revolving Credit Ceiling................................ 32
2-13. Revolving Credit Commitment Fee............................................................... 32
2-14. Administrative Agent's Fee.................................................................... 32
2-15. Unused Fee.................................................................................... 32
2-16. Early Termination Fee......................................................................... 33
2-17. Procedures For Issuance of L/Cs............................................................... 33
2-18. Fees For L/Cs................................................................................. 34
2-19. Concerning L/Cs............................................................................... 35
2-20. Changed Circumstances......................................................................... 36
2-21. Designation of Lead Borrower as Borrowers' Agent.............................................. 37
2-22. Lenders' Commitments.......................................................................... 38
2-23. Replacement of Revolving Credit Lender........................................................ 39
ARTICLE 3 - CONDITIONS PRECEDENT:
3-1. Corporate Due Diligence....................................................................... 40
3-2. Opinion....................................................................................... 40
3-3 Tri-Party Agreement........................................................................... 40
3-4. Additional Documents.......................................................................... 41
3-5. Officers' Certificates........................................................................ 41
3-6 Due Diligence................................................................................. 41
3-7. Representations and Warranties................................................................ 41
3-8. All Fees and Expenses Paid.................................................................... 41
3-9. No Default.................................................................................... 41
3-10. No Adverse Change............................................................................. 41
3-11 Perfection of Encumbrances.................................................................... 41
3-12 Satisfaction of Existing Indebtedness......................................................... 41
3-13 Consents and Approvals........................................................................ 42
3-14 No Defaults under Applicable law or Material Agreements....................................... 42
3-15 No Litigation................................................................................. 42
3-16 No Negative Impact on Syndication............................................................. 42
3-17 No Change in Governmental Regulations......................................................... 42
3-18. Benefit of Conditions Precedent............................................................... 42
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ARTICLE 4 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:
4-1. Payment and Performance of Liabilities........................................................ 42
4-2. Due Organization. Authorization. No Conflicts................................................. 43
4-3. Trade Names................................................................................... 44
4-4. Intellectual property......................................................................... 44
4-5. Locations..................................................................................... 44
4-6. Title to Assets............................................................................... 45
4-7. Indebtedness.................................................................................. 46
4-8. Insurance..................................................................................... 47
4-9. Licenses...................................................................................... 48
4-10. Leases........................................................................................ 48
4-11. Requirements of Law........................................................................... 48
4-12. Labor Relations............................................................................... 49
4-13. Maintain Properties........................................................................... 49
4-14. Taxes......................................................................................... 50
4-15. No Margin Stock............................................................................... 51
4-16. ERISA......................................................................................... 51
4-17. Hazardous Materials........................................................................... 52
4-18. Litigation.................................................................................... 52
4-19. Dividends. Investments. Corporate Action...................................................... 52
4-20. Loans......................................................................................... 53
4-21. Protection of Assets.......................................................................... 54
4-22. Line of Business.............................................................................. 54
4-23. Affiliate Transactions........................................................................ 54
4-24. Further Assurances............................................................................ 54
4-25. Adequacy of Disclosure........................................................................ 55
4-26. No Restrictions on Liabilities................................................................ 55
4-27. Other Covenants............................................................................... 55
ARTICLE 5 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:
5-1. Maintain Records.............................................................................. 55
5-2. Access to Records............................................................................. 56
5-3. Immediate Notice to Administrative Agent...................................................... 57
5-4. Borrowing Base Certificate.................................................................... 58
5-5. Monthly Reports............................................................................... 58
5-6. Quarterly Reports............................................................................. 58
5-7. Annual Reports................................................................................ 59
5-8. Officers' Certificates........................................................................ 59
5-9. Inventories, Appraisals, and Audits........................................................... 59
5-10. Additional Financial Information.............................................................. 60
5-11. Financial Performance Covenants............................................................... 61
ARTICLE 6 - USE OF COLLATERAL:
6-1. Use of Inventory Collateral................................................................... 61
6-2. Inventory Quality............................................................................. 62
6-3. Adjustments and Allowances.................................................................... 62
6-4. Validity of Accounts.......................................................................... 62
6-5. Notification to Account Debtors............................................................... 62
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ARTICLE 7 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:
7-1. Depository Accounts........................................................................... 62
7-2. Credit Card Receipts.......................................................................... 63
7-3. The Concentration, Blocked, and Operating Accounts............................................ 63
7-4. Proceeds and Collections...................................................................... 64
7-5. Payment of Liabilities........................................................................ 65
ARTICLE 8 - GRANT OF SECURITY INTEREST:
8-1. Grant of Security Interest.................................................................... 65
8-2. Extent and Duration of Security Interest...................................................... 66
ARTICLE 9 - ADMINISTRATIVE AGENT AS BORROWER'S ATTORNEY-IN-FACT:
9-1. Appointment as Attorney-In-Fact............................................................... 66
9-2. No Obligation to Act.......................................................................... 67
ARTICLE 10 - EVENTS OF DEFAULT:
10-1. Failure to Pay the Revolving Credit........................................................... 68
10-2. Failure To Make Other Payments................................................................ 68
10-3. Failure to Perform Covenant or Liability (No Grace Period).................................... 68
10-4. Failure to Perform Covenant or Liability (Grace Period)....................................... 68
10-5. Misrepresentation............................................................................. 69
10-6. Acceleration of Other Debt. Breach of Lease................................................... 69
10-7. Uninsured Casualty Loss....................................................................... 69
10-8. Attachment. Judgment. Restraint of Business................................................... 69
10-9. Business Failure.............................................................................. 69
10-10. Bankruptcy.................................................................................... 70
10-11. Indictment - Forfeiture....................................................................... 70
10-12. Challenge to Loan Documents................................................................... 70
10-13. Change in Control............................................................................. 70
10-14 DEFAULT UNDER ASSOCIATES AGREEMENT............................................................ 70
ARTICLE 11 - RIGHTS AND REMEDIES UPON DEFAULT:
11-1 Acceleration.................................................................................. 71
11-2. Rights of Enforcement......................................................................... 71
11-3. Sale of Collateral............................................................................ 71
11-4. Occupation of Business Location............................................................... 72
11-5. Grant of Nonexclusive License................................................................. 72
11-6. Assembly of Collateral........................................................................ 73
11-7. Rights and Remedies........................................................................... 73
ARTICLE 12 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:
12-1. Revolving Credit Funding Procedures........................................................... 73
12-2. SwingLine Loans............................................................................... 73
12-3. Administrative Agent's Covering of Fundings:.................................................. 74
12-4. Ordinary Course Distributions................................................................. 76
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ARTICLE 13 - ACCELERATION AND LIQUIDATION:
13-1. Acceleration Notices.......................................................................... 77
13-2. Acceleration.................................................................................. 77
13-3. Initiation of Liquidation..................................................................... 77
13-4. Actions At and Following Initiation of Liquidation............................................ 77
13-5. Administrative Agent's Conduct of Liquidation................................................. 78
13-6. Distribution of Liquidation Proceeds:......................................................... 78
13-7. Relative Priorities To Proceeds of Liquidation................................................ 78
ARTICLE 14 - THE ADMINISTRATIVE AGENT:
14-1. Appointment of The Administrative Agent....................................................... 79
14-2. Responsibilities of Administrative Agent...................................................... 80
14-3. Concerning Distributions By the Administrative Agent.......................................... 80
14-4. Dispute Resolution:........................................................................... 81
14-5. Distributions of Notices and of Documents..................................................... 81
14-6. Confidential Information...................................................................... 82
14-7. Reliance by Administrative Agent.............................................................. 82
14-8. Non-Reliance on Administrative Agent and Other Revolving Credit Lenders....................... 82
14-9. Indemnification............................................................................... 83
14-10. Resignation of Administrative Agent........................................................... 83
ARTICLE 15 - ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS:
15-1. Administration of Credit Facilities........................................................... 84
15-2. Actions Requiring or On Direction of Majority Lenders......................................... 84
15-3 Actions Requiring or On Direction of SuperMajority Lenders................................... 84
15-4. Actions Requiring or Directed By Unanimous Consent............................................ 85
15-5. Actions Requiring SwingLine Lender Consent.................................................... 86
15-6. Actions Requiring Issuer Consent............................................................. 86
15-7. Actions Requiring Administrative Agent's Consent.............................................. 86
15-8. Miscellaneous Actions......................................................................... 86
15-9. Actions Requiring Lead Borrower's Consent..................................................... 87
15-10. NonConsenting Revolving Credit Lender......................................................... 87
ARTICLE 16 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS:
16-1. Assignments and Assumptions:.................................................................. 89
16-2. Assignment Procedures......................................................................... 89
16-3. Effect of Assignment.......................................................................... 90
ARTICLE 17 - NOTICES:
17-1. Notice Addresses.............................................................................. 90
17-2. Notice Given.................................................................................. 91
ARTICLE 18 - TERM:
18-1. Termination of Revolving Credit............................................................... 92
18-2. Actions On Termination........................................................................ 92
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ARTICLE 19 - GENERAL:
19-1. Protection of Collateral....................................................................... 93
19-2. Publicity...................................................................................... 93
19-3. Successors and Assigns......................................................................... 93
19-4. Severability................................................................................... 93
19-5. Amendments. Course of Dealing.................................................................. 93
19-6. Power of Attorney.............................................................................. 94
19-7. Application of Proceeds........................................................................ 94
19-8. Increased Costs................................................................................ 94
19-9. Costs and Expenses of the Administrative Agent................................................. 95
19-10. Copies and Facsimiles.......................................................................... 95
19-11. Massachusetts Law.............................................................................. 95
19-12. Consent to Jurisdiction........................................................................ 96
19-13. Indemnification................................................................................ 96
19-14. Rules of Construction.......................................................................... 96
19-15. Intent......................................................................................... 98
19-16. Participations:................................................................................ 98
19-17. Right of Set-Off............................................................................... 98
19-18. Pledges To Federal Reserve Banks:.............................................................. 98
19-19. Maximum Interest Rate.......................................................................... 99
19-20. Waivers........................................................................................ 99
19-21 Additional Waivers............................................................................. 100
19-22. Confidentiality................................................................................ 101
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EXHIBITS
1-1 : Realty Sales
3-1 : Good Standing Certificates
2-7(c) : SwingLine Note
2-9 : Revolving Credit Note
2-18 : Synthetic Leases
2-22 : Revolving Credit Lenders' Commitments
3-4 : Additional Documents
4-2 : Corporate Information
4-3 : Trade Names
4-5 : Locations, Leases, and Landlords
4-6 : Encumbrances
4-7 : Indebtedness
4-8 : Insurance Policies
4-10 : Capital Leases
4-12 : Collective Bargaining Agreements
4-14 : Taxes
4-18 : Litigation
4-19 : Existing Investments
4-23 : Affiliate Transactions
5-4 : Borrowing Base Certificate
5-5 : Financial Reporting Requirements
7-1 : DDA's.
7-2 : Credit Card Arrangements
7-3 : Blocked Account Banks
16-2 : Assignment / Assumption
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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May 2, 2003
THIS AGREEMENT is made between
Fleet Retail Finance Inc. (in such capacity, herein the
"ADMINISTRATIVE AGENT"), a Delaware corporation with offices at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the ratable
benefit of the "REVOLVING CREDIT LENDERS", who are, at present, those
financial institutions identified on the signature pages of this
Agreement and who in the future are those Persons (if any) who become
"Revolving Credit Lenders" in accordance with the provisions of Section
2-22, below;
and
The Revolving Credit Lenders;
Fleet National Bank ("FLEET"), a bank organized under the laws
of the United States of America, having an office at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
JPMorgan Business Credit Corp., a corporation organized under
the laws of New York, and JPMorgan Chase Bank, a New York banking
corporation, each having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, as Co-Agents (the "CO-AGENTS");
and
GMAC Commercial Finance LLC, a duly organized limited
liability company having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "DOCUMENTATION AGENT");
and
The CIT Group/Business Credit, Inc., a duly organized
corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "SYNDICATION AGENT")
and
OfficeMax, Inc. (in such capacity, the "LEAD BORROWER"), an
Ohio corporation with its principal executive offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as agent for the
following (individually, a "BORROWER" and collectively, the
"BORROWERS"):
Said OfficeMax, Inc., BizMart, Inc., a Delaware corporation
with its principal executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, BizMart (Texas),
Inc., a Delaware corporation with its principal executive
offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ and OfficeMax Corp., an Ohio corporation with its
principal executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and OMX, Inc., a Nevada
corporation with its
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principal executive offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,
WITNESSETH:
ARTICLE 1 - DEFINITIONS:
As used herein, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:
"ACCOUNT DEBTOR": Has the meaning given that term in the UCC.
"ACCOUNTS" and "ACCOUNTS RECEIVABLE" include, without limitation,
"accounts" as defined in the UCC, and also all: accounts,
accounts receivable, receivables, and rights to payment
(whether or not earned by performance): for property that has
been or is to be sold, leased, licensed, assigned, or
otherwise disposed of; for services rendered or to be
rendered; arising out of the use of a credit or charge card or
information contained on or used with that card; and also all
reclaimed, returned, rejected or repossessed Inventory (if
any) the sale of which gave rise to any Account.
"ACH": Automated clearing house.
"ACQUISITION": The purchase or acquisition of all or substantially all
of the assets of any Person, the purchase of a controlling
equity interest in any Person, or the merger or consolidation
of any Person with any other Person, in any transaction or
group of transactions which are part of a common plan, in each
case excluding any transaction involving a Related Entity.
"ADMINISTRATIVE AGENT": Is referred to in the Preamble.
"ADMINISTRATIVE AGENT'S COVER": Defined in Section 12-3(c)(i).
ADMINISTRATIVE AGENT'S FEE": Is defined in Section 2-14. "
ADMINISTRATIVE AGENT'S RIGHTS AND REMEDIES": Is defined in Section
11-7.
"AFFILIATE": The following:
(a) With respect to any two Persons, a
relationship in which (i) one holds, directly or indirectly,
not less than twenty five percent (25%) of the capital stock,
beneficial interests, partnership interests, or other equity
interests of the other; or (ii) one has, directly or
indirectly, the right, under ordinary circumstances, to vote
for the election of a majority of the directors (or other body
or Person who has those powers customarily vested in a board
of directors of a corporation); or (iii) not less than twenty
five percent (25%) of their respective ownership is directly
or indirectly held by the same third Person.
(b) Any Person which: is a parent,
brother-sister, Subsidiary, or affiliate, of a Borrower; could
have such enterprise's tax returns or financial statements
2
consolidated with that Borrower's; could be a member of the
same controlled group of corporations (within the meaning of
Section 1563(a)(l), (2) and (3) of the Internal Revenue Code
of 1986, as amended from time to time) of which any Borrower
is a member; controls or is controlled by any Borrower.
"AGREEMENT": This Amended and Restated Loan and Security Agreement, as
such may hereafter be modified, amended, restated, or
supplemented from time to time.
"APPLICABLE LAW": As to any Person: (i) All statutes, rules,
regulations, orders, or other requirements having the force of
law and (ii) all court orders and injunctions, arbitrator's
decisions, and/or similar rulings, in each instance ((i) and
(ii)) of or by any federal, state, municipal, and other
governmental authority, or court, tribunal, panel, or other
body which has or claims jurisdiction over such Person, or any
property of such Person.
"APPLICABLE MARGIN": The rates for Base Margin Loans and Eurodollar
Loans based upon the following criteria:
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BASE
REVOLVING CREDIT MARGIN EURODOLLAR
LOANS AND L/Cs APPLICABLE APPLICABLE
LEVEL OUTSTANDING MARGIN MARGIN
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1 Less than
$350,000,000 0% 1.75%
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2 Greater than or equal
to $350,000,000, but
less than $430,000,000 0% 2.00%
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3 Greater than or equal
to $430,000,000 0% 2.50%
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The Applicable Margin shall be adjusted monthly as of the first day of
each calendar month, commencing March 1, 2003, based upon the average
Revolving Credit Loans and L/Cs outstanding during the immediately
preceding calendar month. During the existence of an Event of Default,
interest shall accrue at the rate set forth in Section 2-11(f).
"APPRAISED INVENTORY LIQUIDATION VALUE": The product of (a) the Cost of
Eligible Inventory (net of Inventory Reserves) multiplied by
(b) that percentage, determined from the then most recent
appraisal of the Borrowers' Inventory undertaken at the
request of the Administrative Agent by an independent
appraiser reasonably acceptable to the Lead Borrower, to
reflect the appraiser's estimate of the net recovery on the
Borrowers' Inventory in the event of an in-store liquidation
of that Inventory.
"APPRAISED INVENTORY PERCENTAGE": 80%.
"ARRANGER": Fleet Securities, Inc.
"ASSIGNING REVOLVING CREDIT LENDER": Defined in Section 16-1 (a).
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"ASSIGNMENT AND ACCEPTANCE": Defined in Section 16-2.
"AVAILABILITY": The lesser of (a) or (b), where:
(a) is the result of
(i) The Revolving Credit Ceiling
Minus
(ii) The aggregate unpaid balance of the
Loan Account
Minus
(iii) The aggregate undrawn Stated Amount
of all then outstanding L/Cs.
(b) is the result of
(i) The Borrowing Base
Minus
(ii) The aggregate unpaid balance of the
Loan Account
Minus
(iii) The aggregate undrawn Stated Amount
of all then outstanding L/Cs.
Minus
(iv) The aggregate of the Availability
Reserves.
"AVAILABILITY RESERVES": Such reserves as the Administrative Agent from
time to time determines (after consultation with the Lead
Borrower (whose consent to any Availability Reserve shall not
be required)) in the Administrative Agent's reasonable
business judgment as being appropriate to reflect the
impediments to the Administrative Agent's ability to realize
upon the Collateral. Without limiting the generality of the
foregoing, Availability Reserves may include (but are not
limited to) reserves based on the following:
(i) Rent (but only if a landlord's waiver,
acceptable to the Administrative Agent, has
not been received by the Administrative
Agent).
(ii) Customer Credit Liabilities.
(iii) Taxes and other governmental charges,
including, ad valorem, personal property,
and other taxes which have priority over the
Collateral Interests of the Administrative
Agent in the Collateral.
(iv) Payables more than forty-five (45) days
beyond normal terms.
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"BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.
"BASE": For any day, (a) the Prime Rate announced from time to time by
Fleet National Bank (or any successor in interest to Fleet
National Bank) as its "Prime Rate" or (b) if no such Prime
Rate is announced by Fleet National Bank, the Federal Funds
Effective Rate in effect on such day plus one-half of one
percent (0.50%) per annum. The "Prime Rate" is a reference
rate and does not necessarily represent the lowest or best
rate being charged to any customer. Any change in the Prime
Rate due to a change in Fleet National Bank's Prime Rate or
the Federal Funds Effective Rate shall be effective on the
effective date of such change in Fleet National Bank's Prime
Rate or the Federal Funds Effective Rate, respectively.
"BASE MARGIN LOAN": Each Revolving Credit Loan while bearing interest
at the Base Margin Rate.
"BASE MARGIN RATE": The aggregate of Base plus the Applicable Margin
for Base Margin Loans.
"BLOCKED ACCOUNT": Any DDA into which the contents of any other DDA is
transferred.
"BLOCKED ACCOUNT AGREEMENT": An Agreement, in form satisfactory to the
Administrative Agent, which Agreement recognizes the
Administrative Agent's Collateral Interest in the contents of
the DDA which is the subject of such Agreement and agrees
that, after and during the continuance of a Cash Control
Event, such contents shall be transferred only to the
Concentration Account or as otherwise instructed by the
Administrative Agent.
"BORROWER" AND "BORROWERS": Is defined in the Preamble and includes all
domestic Subsidiaries of any Borrower hereafter acquired or
created which own any Inventory or Accounts.
"BORROWING BASE": The aggregate of the following:
The face amount of Eligible Credit Card Receivables
multiplied by the Credit Card Advance Rate.
Plus
The lesser of (a) the Cost of Eligible Inventory (net
of Inventory Reserves) multiplied by the Inventory Advance
Rate or (b) the Appraised Inventory Percentage of the
Appraised Inventory Liquidation Value, provided that any
reduction in the amounts available to be borrowed under this
paragraph as a result of a change in the Appraised Inventory
Liquidation Value shall not take place until five (5) days
after the date that the Lead Borrower is advised by the
Administrative Agent of such change in the Appraised Inventory
Liquidation Value.
"BORROWING BASE CERTIFICATE": Is defined in Section 5-4.
"BUSINESS DAY": Any day other than (a) a Saturday or Sunday; (b) any
day on which banks in Boston, Massachusetts or in Cleveland,
Ohio, and when involving any DDA or Blocked Account, the
office of the financial institution at which that DDA or
Blocked Account, as the case may be, is maintained, generally
are not open to the general public for the purpose of
conducting commercial banking business; or (c) a day on which
the
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principal office of the Administrative Agent is not open to
the general public to conduct business.
"CAPITAL EVENT": The issuance by any Borrower on or after the Closing
Date (a) of Indebtedness for borrowed money in an underwritten
public offering or private placement with institutional
investors or (b) of any equity interest for cash, excluding
any sale or issuance to management, employees or directors
pursuant to stock option or similar plans and excluding any
sale or issuance of an amount not to exceed an aggregate of
$20,000,000.00 of proceeds received from and after the Closing
Date. Nothing contained in this definition or in any provision
relating to Capital Events shall permit or be deemed to permit
the Borrowers to effectuate a Capital Event which is otherwise
prohibited hereunder.
"CAPITAL EXPENDITURES": The expenditure of funds or the incurrence of
liabilities which may be capitalized in accordance with GAAP.
"CAPITAL LEASE": Any lease which may be capitalized in accordance with
GAAP.
"CASH CONTROL EVENT": Either (a) the occurrence and continuance of any
Event of Default, or (b) the occurrence and continuance of
each of the following: (i) Availability at any time is less
than $40,000,000, and (ii) the Fixed Charge Coverage Ratio is
less than 1:1. For purposes hereof, the occurrence of a Cash
Control Event under clause (b) hereof shall be deemed
continuing notwithstanding that Availability may thereafter
exceed the amounts set forth in the such clause unless and
until Availability exceeds such amounts for three consecutive
months, in which case a Cash Control Event shall no longer be
deemed to be continuing for purposes hereof; provided that a
Cash Control Event under clause (b) hereof shall be deemed
continuing (even if Availability exceeds the required amounts
for three consecutive months) if a Cash Control Event has
occurred and been discontinued on three occasions in any
twelve month period.
"CHANGE IN CONTROL": The occurrence of any of the following:
(a) The acquisition, by any group of persons
(within the meaning of the Securities Exchange Act of 1934, as
amended) or by any Person, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission) of 33 1/3% or more of the issued and outstanding
capital stock of the Lead Borrower having the right, under
ordinary circumstances, to vote for the election of directors
of the Lead Borrower, other than (i) the Lead Borrower, (ii)
any trustee or other fiduciary holding securities under an
employee benefit plan of the Lead Borrower, or (iii) any
members of the Current Holder Group (as hereinafter defined).
As used herein, the term "Current Holder Group" shall mean (1)
those Persons who currently hold 5% or more of the issued and
outstanding capital stock of the Lead Borrower on Closing
Date, (2) Persons who are officers or directors of the Lead
Borrower on the Closing Date, (3) the spouses, heirs,
legatees, descendants and relatives of any Person described in
(1) or (2), (4) the executors, administrators of the estate of
any Person described in (1) or (2), and any court appointed
guardian of any such Person, and (5) any trust, family
partnership or similar investment entity for the benefit of
any Person described in (1) or (2).
(b) More than half of the persons who were
directors of the Lead Borrower on the first day of any period
consisting of twelve (12) consecutive calendar months (the
first of which twelve (12) month periods commencing with the
first day of the month during which this Agreement was
executed), cease, for any reason other than
6
retirement, death or disability, to be directors of the Lead
Borrower, and their respective replacements are not nominated
or appointed by a majority of the Persons who were directors
on the first day of such twelve (12) consecutive calendar
months or who were nominated or appointed by directors so
nominated or appointed.
(c) Any failure of the Lead Borrower to own,
directly or indirectly, beneficially and of record, 100% of
the capital stock of all other Borrowers.
"CLOSING DATE": The date upon which the conditions precedent set forth
in Article 3 hereof have been satisfied or waived.
"CO-AGENTS": Is referred to in the Preamble.
"COLLATERAL": Is defined in Section 8-1.
"COLLATERAL INTEREST": Any interest in property to secure an
obligation, including, without limitation, a security
interest, mortgage, and deed of trust.
"CONCENTRATION ACCOUNT": Is defined in Section 7-3.
"CONSENT": Actual consent given by the Lender from whom such consent is
sought; or the passage of seven (7) Business Days from receipt
of written notice to a Revolving Credit Lender from the
Administrative Agent of a proposed course of action to be
followed by the Administrative Agent without such Revolving
Credit Lender's giving the Administrative Agent written notice
of that Revolving Credit Lender's objection to such course of
action, provided that the Administrative Agent may rely on
such passage of time as consent by a Revolving Credit Lender
only if such written notice states that consent will be deemed
effective if no objection is received within such time period.
"CONSOLIDATED": When used to modify a financial term, test, statement,
or report, refers to the application or preparation of such
term, test, statement or report (as applicable) based upon the
consolidation, in accordance with GAAP, of the financial
condition or operating results of the Lead Borrower and its
Subsidiaries.
"COST": The lower of (a) or (b), where:
(a) is the calculated cost of purchases, based upon
the Borrowers' accounting practices in effect on the date on
which this Agreement was executed as such calculated cost is
determined from: invoices received by the Borrowers; the
Borrowers' purchase journal; or the Borrowers' perpetual
inventory system.
(b) is, without duplication of any Inventory Reserves
for Markdowns, the lowest ticketed or promoted price at which
the subject Inventory is offered to the public by the
Borrowers, after all ▇▇▇▇-▇▇▇▇▇ (whether or not such price is
then reflected on the Borrowers' accounting system).
"Cost" does not include inventory capitalization costs or
other non-purchase price charges (such as freight) used in the
Borrowers' calculation of cost of goods sold.
"COSTS OF COLLECTION": Includes, without limitation, all reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred
by the Administrative Agent's attorneys, and all reasonable
out-of-pocket costs incurred by the Administrative Agent in
the administration of the Liabilities and/or the Loan
Documents, including, without
7
limitation, reasonable costs and expenses associated with
travel on behalf of the Administrative Agent, where such costs
and expenses are directly or indirectly related to or in
respect of the Administrative Agent's: administration and
management of the Liabilities; negotiation, documentation, and
amendment of any Loan Document; or efforts to preserve,
protect, collect, or enforce the Collateral, the Liabilities,
and/or the Administrative Agent's Rights and Remedies and/or
any of the rights and remedies of the Administrative Agent
against or in respect of any guarantor or other person liable
in respect of the Liabilities (whether or not suit is
instituted in connection with such efforts). "Costs of
Collection" shall also include the reasonable fees and
expenses of Lenders' Special Counsel. The Costs of Collection
are Liabilities, and at the Administrative Agent's option may
bear interest at the then effective Base Margin Rate.
"COVENANT COMPLIANCE EVENT": Availability at any time is less than ten
(10) percent of the then Revolving Credit Ceiling (rounded to
the nearest million). For purposes hereof, the occurrence of a
Covenant Compliance Event shall be deemed continuing (a) as
long as the Borrowers are not in compliance with the required
Fixed Charge Coverage Ratio, notwithstanding that Availability
may thereafter exceed the amounts set forth in the preceding
sentence, or (b) as long as the Borrowers are in compliance
with the required Fixed Charge Coverage Ratio, until
Availability exceeds the amounts set forth in the preceding
sentence.
"CREDIT CARD ADVANCE Rate":85%
"CUSTOMER CREDIT LIABILITY": Gift certificates, merchandise credits,
layaway obligations, frequent shopping programs, and similar
liabilities of any Borrower to its retail customers and
prospective customers.
"DDA": Any checking or other demand daily depository account maintained
by any Borrower in which proceeds of the Borrowers' Inventory
and Accounts are deposited.
"DEBT SERVICE CHARGES": For any fiscal period, the sum of (i) the
expenses of the Lead Borrower and its Subsidiaries for such
period for interest paid in cash with respect to Indebtedness
(including, without limitation, the Liabilities but excluding
any synthetic lease payments) and all fees paid in cash on
account of or with respect thereto, plus (ii) principal
payments made or required to be made on account of
Indebtedness (excluding the Liabilities and any synthetic
lease payments but including, without limitation, Capitalized
Leases) for such period, in each case determined in accordance
with GAAP.
"DEFAULT": Any occurrence, circumstance, or state of facts with respect
to a Borrower which (a) is an Event of Default; or (b) would
become an Event of Default if any requisite notice were given
and/or any requisite period of time were to run and such
occurrence, circumstance, or state of facts were not
absolutely cured within any applicable grace period.
"DELINQUENT REVOLVING CREDIT LENDER": Defined in Section 12-3(c).
"DEPOSIT ACCOUNT": Has the meaning given that term in the UCC.
"DOCUMENTARY L/Cs": L/Cs issued pursuant to this Agreement to support
any Borrower's purchases in the ordinary course of business of
Inventory for use in its retail store business, the drawing
under which requires the delivery of bills of lading, airway
bills or other similar types of documents of title.
8
"DOCUMENTATION AGENT": Is referred to in the Preamble.
"DOCUMENTS": Has the meaning given that term in the UCC.
"EBITDA": Consolidated earnings before interest, taxes, depreciation,
and amortization, each as determined in accordance with GAAP.
"ELIGIBLE ASSIGNEE": A bank, insurance company, finance company or
other financial institution or fund engaged in the business of
making or investing in commercial loans in the ordinary course
of its business having a combined capital and surplus or
assets under management in excess of $300,000,000 or any
Affiliate of any Revolving Credit Lender, or any Person to
whom a Revolving Credit Lender assigns its rights and
obligations under this Agreement as part of a programmed
assignment and transfer of such Revolving Credit Lender's
rights in and to a material portion of such Revolving Credit
Lender's portfolio of asset based credit facilities.
"ELIGIBLE CREDIT CARD RECEIVABLES": Accounts due on a non-recourse
basis from major credit card processors (which, if due on
account of a private label credit card program, are deemed in
the reasonable discretion of the Administrative Agent to be
eligible) as arise in the ordinary course of business, as have
been earned by performance. Unless otherwise approved in
writing by the Administrative Agent, none of the following
shall be deemed to be Eligible Credit Card Receivables:
(a) Accounts that have been outstanding for more than six
(6) 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 Encumbrance (other than Encumbrances
granted to the Administrative Agent, for its benefit
and the ratable benefit of the other Revolving Credit
Lenders, pursuant to the Loan Documents);
(c) Accounts which are disputed, are with recourse, or
with respect to which a claim, counterclaim, offset
or chargeback has been asserted (to the extent of
such claim, counterclaim, offset or chargeback);
(d) Accounts which the Administrative Agent determines in
its reasonable discretion to be uncertain of
collection.
"ELIGIBLE INVENTORY": Inventory owned by any Borrower and maintained by
a Borrower at a warehouse or held for sale in any of the
Borrowers' retail stores, in each case in the United States of
America (including its territories and possessions), which is
reflected in the Borrowers' perpetual inventory, as to which
Inventory, the Administrative Agent has a perfected security
interest which is prior and superior to all security
interests, claims, and Encumbrances. In no event, however,
does "Eligible Inventory" include: any inventory-in-transit to
the Borrowers, non-merchandise inventory (such as labels,
bags, and packaging materials); damaged goods; return to
vendor merchandise; packaways; or consigned inventory.
"EMPLOYEE BENEFIT PLAN": As defined in ERISA.
"ENCUMBRANCE": Each of the following:
9
(a) A Collateral Interest or agreement to create
or grant a Collateral Interest; the interest of a lessor under
a Capital Lease; conditional sale or other title retention
agreement; sale of accounts receivable or chattel paper; or
other arrangement pursuant to which any Person is entitled to
any preference or priority with respect to the property or
assets of another Person or the income or profits of such
other Person; each of the foregoing whether consensual or
non-consensual and whether arising by way of agreement,
operation of law, legal process or otherwise.
(b) The filing of any financing statement under
the UCC or comparable law of any jurisdiction.
"END DATE": The date upon which both (a) all Liabilities (excluding any
contingent Liabilities not then due and payable) have been
paid in full and (b) all obligations of any Revolving Credit
Lender to make loans and advances and to provide other
financial accommodations to the Borrowers hereunder shall have
been irrevocably terminated.
"ENVIRONMENTAL LAWS": All of the following:
(a) Applicable Law which regulates or relates
to, or imposes any standard of conduct or liability on account
of or in respect to environmental protection matters,
including, without limitation, Hazardous Materials, as are now
or hereafter in effect.
(b) The common law relating to damage to Persons
or property from Hazardous Materials.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE": Any Person which is under common control with a
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes any Borrower and which would be
treated as a single employer under Section 414 of the Internal
Revenue Code of 1986, as amended.
"EURODOLLAR BUSINESS DAY": Any day which is both a Business Day and a
day on which the principal market in Eurodollars in which
Fleet National Bank participates is open for dealings in
United States Dollar deposits.
"EURODOLLAR LOAN": Any Revolving Credit Loan which bears interest at a
Eurodollar Rate.
"EURODOLLAR OFFER RATE": That rate of interest (rounded upwards, if
necessary, to the next 1/100 of 1%) determined by the
Administrative Agent to be the highest prevailing rate per
annum at which deposits in U.S. Dollars are offered to Fleet
National Bank, by first-class banks in the Eurodollar market
in which Fleet National Bank participates at or about 10:OOAM
(Boston Time) two (2) Eurodollar Business Days before the
first day of the Interest Period for the subject Eurodollar
Loan, for a deposit approximately in the amount of the subject
loan for a period of time approximately equal to such Interest
Period.
"EURODOLLAR RATE": That per annum rate which is the aggregate of the
Eurodollar Offer Rate plus the Applicable Margin for
Eurodollar Loans, except that, in the event that the
Administrative Agent determines that any Revolving Credit
Lender may be subject to the Reserve Percentage, the
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Loans then outstanding (from the date on which that Reserve
Percentage
10
first became applicable to such Eurodollar Loans), and with
respect to all Eurodollar Loans thereafter made, an interest
rate per annum equal the sum of (a) plus (b), where:
(a) is the decimal equivalent of the following
fraction:
Eurodollar Offer Rate
---------------------
1 minus Reserve Percentage
(b) is the Applicable Margin for Eurodollar Loans.
"EVENTS OF DEFAULT": Is defined in Article 10.
"EXEMPT DDA": A depository account maintained by any Borrower, the only
contents of which may be transfers from the Operating Account
and actually used solely (i) for ▇▇▇▇▇ cash purposes; or (ii)
for payroll.
"FEDERAL FUNDS EFFECTIVE RATE". For any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the
Federal Reserve System arranged by federal fund brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
"FEE LETTER": That letter dated November 30, 2000 and styled "Fee
Letter" between the Lead Borrower and the Administrative
Agent, as amended and supplemented as of the date hereof, and
as such letter may from time to time hereafter be amended.
"FISCAL": When followed by "month" or "quarter", the relevant fiscal
period based on the Borrowers' fiscal year and accounting
conventions.
"FIXED CHARGE COVERAGE RATIO": As to the Lead Borrower and its
Subsidiaries, for any period, the ratio of (a) Consolidated
EBITDA minus Capital Expenditures incurred during such period
minus income taxes paid in cash during such period, to (b)
Debt Service Charges for such period, all as determined in
accordance with GAAP. The Fixed Charge Coverage Ratio shall be
calculated on a trailing four quarters basis.
"FLEET": Is defined in the Preamble hereto.
"FRFI": Fleet Retail Finance Inc.
"GAAP": Principles which are consistent with those promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors (or successors) in effect and applicable to that
accounting period in respect of which reference to GAAP is
being made, provided, however, in the event of a Material
Accounting Change, then unless otherwise specifically agreed
to by the Administrative Agent, (a) the Borrowers' compliance
with the financial performance covenants imposed pursuant to
Section 5-11 shall be determined as if such Material
Accounting Change had not taken place and (b) the Lead
Borrower shall include, with its monthly, quarterly, and
annual financial statements a schedule, certified by the Lead
Borrower's chief financial officer, on which the effect of
such Material Accounting Change on that statement shall be
described.
11
"GOODS": Has the meaning given that term in the UCC, and also includes
all things movable when a security interest therein attaches
and also all computer programs embedded in goods and any
supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such manner that it customarily
is considered part of the goods or (ii) by becoming the owner
of the goods, a Person acquires a right to use the program in
connection with the goods.
"HAZARDOUS MATERIALS": Any (a) substance which is defined or regulated
as a hazardous material in or under any Environmental Law and
(b) oil in any physical state.
"HEDGE AGREEMENTS": All obligations of any Person in respect of
interest rate swap agreements, currency swap agreements and
other similar agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates.
"INCREASED REPORTING EVENT": Either (a) the occurrence and continuance
of any Event of Default, or (b) Availability at any time is
less than 14.3 percent of the then Revolving Credit Ceiling
(rounded to the nearest million). For purposes hereof, the
occurrence of an Increased Reporting Event shall be deemed
continuing notwithstanding that Availability may thereafter
exceed the amounts set forth in the preceding sentence unless
and until Availability exceeds such amounts for thirty (30)
consecutive days, in which case a Increased Reporting Event
shall no longer be deemed to be continuing for purposes
hereof.
"INDEBTEDNESS": All indebtedness and obligations of or assumed by any
Person on account of or in respect to, without duplication,
any of the following:
(a) In respect of money borrowed (including any
indebtedness which is non-recourse to the credit of such
Person but which is secured by an Encumbrance on any asset of
such Person) whether or not evidenced by a promissory note,
bond, debenture or other written obligation to pay money.
(b) In connection with any letter of credit or
acceptance transaction (including, without limitation, the
face amount of all letters of credit and acceptances issued
for the account of such Person or reimbursement on account of
which such Person would be obligated).
(c) In connection with the sale or discount of
accounts receivable or chattel paper of such Person.
(d) On account of deposits or advances.
(e) As lessee under Capital Leases.
(f) On account of Hedge Agreements.
(g) In connection with any sale and leaseback
transaction.
"Indebtedness" also includes:
(1) Indebtedness of others
secured by an Encumbrance on any asset of
such Person, whether or not such
Indebtedness is assumed by such Person.
12
(2) Any guaranty, endorsement,
suretyship or other undertaking pursuant to
which that Person may be liable on account
of any obligation of any third party.
(3) The Indebtedness of a
partnership or joint venture for which such
Person is liable as a general partner or
joint venturer.
"INDEMNIFIED PERSON": Is defined in Section 19-13.
"INFORMATION": Is defined in Section 19-22.
"INSTRUMENTS": Has the meaning given that term in the UCC.
"INTEREST PAYMENT DATE": With reference to:
Each Eurodollar Loan: The last day of the Interest
Period relating thereto (provided that if the Interest Period
is greater than three months in length, the Interest Payment
Date shall be the last day of the third month of such Interest
Period and the last day of the Interest Period); the
Termination Date; and the End Date.
Each Base Margin Loan: The first day of each month;
the Termination Date; and the End Date.
"INTEREST PERIOD": The following:
(a) With respect to each Eurodollar Loan:
Subject to Subsection (c), below, the period commencing on the
date of the making or continuation of, or conversion to, the
subject Eurodollar Loan and ending one, two, three, or six
months thereafter, as the Lead Borrower may elect by notice
(pursuant to Section 2-5) to the Administrative Agent
(b) With respect to each Base Margin Loan:
Subject to Subsection (c), below, the period commencing on the
date of the making or continuation of or conversion to such
Base Margin Loan and ending on that date (i) as of which the
subject Base Margin Loan is converted to a Eurodollar Loan, as
the Lead Borrower may elect by notice (pursuant to Section
2-5) to the Administrative Agent, or (ii) on which the subject
Base Margin Loan is paid by the Borrowers.
(c) The setting of Interest Periods is in all
instances subject to the following:
(i) Any Interest Period for a Base
Margin Loan which would otherwise end on a day which
is not a Business Day shall be extended to the next
succeeding Business Day.
(ii) Any Interest Period for a
Eurodollar Loan which would otherwise end on a day
that is not a Business Day shall be extended to the
next succeeding Business Day, unless that succeeding
Business Day is in the next calendar month, in which
event such Interest Period shall end on the last
Business Day of the month during which the Interest
Period ends.
(iii) Subject to Subsection (iv) below,
any Interest Period applicable to a Eurodollar Loan,
which Interest Period begins on a day for which there
is no numerically corresponding day in the calendar
month during
13
which such Interest Period ends, shall end on the
last Business Day of the month during which that
Interest Period ends.
(iv) Any Interest Period which would
otherwise end after the Termination Date shall end on
the Termination Date.
(v) The number of Interest Periods in
effect at any one time is subject to Section 2-ll(d)
hereof.
"INVENTORY": Includes, without limitation, "inventory" as defined in
the UCC and also all: (a) Goods which are leased by a Person
as lessor; are held by a Person for sale or lease or to be
furnished under a contract of service; are furnished by a
Person under a contract of service; or consist of raw
materials, work in process, or materials used or consumed in a
business; (b) Goods of said description in transit; (c) Goods
of said description which are returned, repossessed and
rejected; (d) packaging, advertising, and shipping materials
related to any of the foregoing; and (e) Documents which
represent any of the foregoing.
"INVENTORY ADVANCE RATE": The following percentages for the periods
indicated:
---------------------------------------------------------------------------
Period Inventory Advance Rate
----------------------------------------------------------------------------
January 1 through June 30 of each year 59%
----------------------------------------------------------------------------
July 1 through December 31 of each 61%
year
----------------------------------------------------------------------------
"INVENTORY RESERVES": Such Reserves as may be established from time to
time by the Administrative Agent (after consultation with the
Lead Borrower (whose consent to any Inventory Reserve shall
not be required)), without duplication, in the Administrative
Agent's reasonable business judgment 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) reserves based on, without
duplication, the following:
(i) Obsolescence (based upon Inventory on hand
beyond a given number of days).
(ii) Seasonality.
(iii) Shrinkage.
(iv) Imbalance.
(v) Change in Inventory character except as
permitted pursuant to Section 4-22 hereof.
(vi) Change in Inventory composition.
(vii) Change in Inventory mix.
14
(viii) Markdowns (both permanent and point of
sale).
(ix) Retail markons and markups inconsistent with
prior period practice and performance; or
advertising calendar and planned advertising
events.
"ISSUER": The issuer of any L/C. The Issuer shall be Fleet or such
other Revolving Credit Lender (or Affiliate of a Revolving
Credit Lender) as the Administrative Agent may, in its
discretion, select with the consent of the Lead Borrower whose
consent shall not be unreasonably delayed or withheld.
"L/C": Any letter of credit, the issuance of which is procured by the
Administrative Agent for the account of any Borrower and any
acceptance made on account of such letter of credit.
"LANDLORD'S LIEN STATES": Collectively, Pennsylvania, Washington,
Virginia and each other state in which Applicable Law grants a
landlord a priority lien for amounts due or to become due
under a Lease.
"LEAD BORROWER": Is defined in the Preamble hereto.
"LEASE": Any lease or other agreement, no matter how styled or
structured, pursuant to which a Borrower is entitled to the
use or occupancy of any space.
"LENDERS' SPECIAL COUNSEL": A single counsel, selected by the Majority
Lenders during the existence of an Event of Default, to
represent the interests of the Revolving Credit Lenders in
connection with the enforcement, attempted enforcement, or
preservation of any rights and remedies under this, or any
other Loan Document, as well as in connection with any
"workout", forbearance, or restructuring of the credit
facility contemplated hereby.
"LETTER-OF-CREDIT RIGHT": Has the meaning given that term in the UCC
and also refers to any right to payment or performance under
an L/C, whether or not the beneficiary has demanded or is at
the time entitled to demand payment or performance.
"LIABILITIES": Collectively, the following:
(a) All and each of the following, whether now existing
or hereafter arising, under this Agreement or under any of the other
Loan Documents:
(i) Any and all direct and indirect liabilities,
debts, and obligations of each Borrower to the Administrative
Agent or any Revolving Credit Lender, each of every kind,
nature, and description.
(ii) Each obligation to repay any loan, advance,
indebtedness, note, obligation, overdraft, or amount now or
hereafter owing by any Borrower to the Administrative Agent or
any Revolving Credit Lender (including all future advances
whether or not made pursuant to a commitment by the
Administrative Agent or any Revolving Credit Lender), whether
or not any of such are liquidated, unliquidated, primary,
secondary, secured, unsecured, direct, indirect, absolute,
contingent, or of any other type, nature, or description, or
by reason of any cause of action which the Administrative
Agent or any Revolving Credit Lender may hold against any
Borrower.
15
(iii) All notes and other obligations of each
Borrower now or hereafter assigned to or held by the
Administrative Agent or any Revolving Credit Lender, each of
every kind, nature, and description.
(iv) All interest, fees, and charges and other
amounts which may be charged by the Administrative Agent or
any Revolving Credit Lender to any Borrower and/or which may
be due from any Borrower to the Administrative Agent or any
Revolving Credit Lender from time to time.
(v) All reasonable costs and expenses incurred
or paid by the Administrative Agent or any Revolving Credit
Lender in respect of any agreement between any Borrower and
the Administrative Agent or any Revolving Credit Lender or
instrument furnished by any Borrower to the Administrative
Agent or any Revolving Credit Lender (including, without
limitation, Costs of Collection, reasonable attorneys' fees,
and all reasonable court and litigation costs and expenses).
(vi) Any and all covenants of each Borrower to or
with the Administrative Agent or any Revolving Credit Lender
and any and all obligations of each Borrower to act or to
refrain from acting in accordance with any agreement between
that Borrower and the Administrative Agent or any Revolving
Credit Lender or instrument furnished by that Borrower to the
Administrative Agent or any Revolving Credit Lender.
(vii) Each of the foregoing as if each reference
to the "the Administrative Agent or any Revolving Credit
Lender" were to each Affiliate of the Administrative Agent.
(b) Any and all direct or indirect liabilities, debts,
and obligations of each Borrower to the Administrative Agent or any
Affiliate of the Administrative Agent, each of every kind, nature, and
description owing on account of any service or accommodation provided
to, or for the account of any Borrower pursuant to this or any other
Loan Document, including cash management services and the issuances of
L/Cs.
"LINE FEE": A fee equal to 0.25% per annum of the average difference,
during the quarter just ended (or relevant period with respect
to the payment being made on the Termination Date) between the
Revolving Credit Ceiling and the sum of (a) the aggregate of
the unpaid principal balance of the Revolving Credit Loans
(other than the SwingLine Loans) and (b) the undrawn Stated
Amount of L/Cs outstanding during the relevant period.
"LIQUIDATION": The exercise, by the Administrative Agent, of those
rights accorded to the Administrative Agent under the Loan
Documents as a creditor of the Borrowers during the existence
of an Event of Default looking towards the realization on the
Collateral. Derivations of the word "Liquidation" (such as
"Liquidate") are used with like meaning in this Agreement.
"LOAN ACCOUNT": Is defined in Section 2-8.
"LOAN DOCUMENTS": This Agreement, each instrument and document
executed and/or delivered as contemplated by Article 3, below,
and each other instrument or document from time to time
executed and/or delivered in connection with the arrangements
contemplated hereby or in connection with any transaction with
the Administrative Agent or any Affiliate of the
Administrative Agent, including, without limitation, any
transaction which arises out of any cash management,
depository, investment, letter of
16
credit, interest rate protection, or equipment leasing
services provided by the Administrative Agent or any Affiliate
of the Administrative Agent, as each may be amended from time
to time.
"MAJORITY LENDERS": Prior to termination of the Revolving Credit
Commitments, Revolving Credit Lenders (other than Delinquent
Revolving Credit Lenders) holding 51% or more of the Revolving
Credit Commitments (other than any Revolving Credit
Commitments held by Delinquent Revolving Credit Lenders).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 51% or more of the Liabilities (other
than any Liabilities held by Delinquent Revolving Credit
Lenders).
"MATERIAL ACCOUNTING CHANGE": Any change in GAAP applicable to
accounting periods subsequent to the Borrowers' fiscal year
most recently completed prior to the execution of this
Agreement, which change has a material effect on the
Borrowers' Consolidated financial condition or operating
results, as reflected on financial statements and reports
prepared by or for the Borrowers, when compared with such
condition or results as if such change had not taken place or
where preparation of the Borrowers' statements and reports in
compliance with such change results in the breach of a
financial performance covenant imposed pursuant to Section
5-11 where such a breach would not have occurred if such
change had not taken place or visa versa.
"MATURITY DATE": February 28, 2007.
"NOMINEE": A business entity (such as a corporation or limited
partnership) formed by the Administrative Agent to own or
manage any Post Foreclosure Asset.
"NOTICE OF ACCELERATION": Written notice as follows:
(a) From the Administrative Agent to the
Revolving Credit Lenders, as provided in 13-l(a).
(b) From the Majority Lenders to the
Administrative Agent, as provided in Section 13-l(b).
"OPERATING ACCOUNT": Is defined in Section 7-3.
"OVERLOAN": A loan, advance, or providing of credit support (such as
the issuance of any L/C) to the extent that, immediately after
its having been made, Availability is less than zero.
"PARTICIPANT": Is defined in Section 19-16, hereof.
"PAYMENT INTANGIBLE":HAS the meaning given that term in the UCC and
also refers to any general intangible under which the Account
Debtor's primary obligation is a monetary obligation.
"PERMISSIBLE OVERLOANS": Revolving Credit Loans which are OverLoans,
but as to which each of the following conditions is satisfied:
(a) the Revolving Credit Ceiling is not exceeded; and (b) when
aggregated with all other Permissible OverLoans, such
Revolving Credit Loans do not aggregate more than three
percent (3%) of the aggregate of the Borrowing Base; (c) the
Permissible Overloans shall not remain outstanding for more
than thirty (30) consecutive days, and (d) such Revolving
Credit
17
Loans are made or undertaken in the Administrative Agent's
discretion to protect and preserve the interests of the
Revolving Credit Lenders.
"PERMITTED ACQUISITIONS": An Acquisition in which each of the following
conditions are satisfied:
(i) No Default or Event of Default then exists or
would arise from the consummation of such
Acquisition.
(ii) Such Acquisition shall have been approved by the
Board of Directors of the Person (if such Person is a
corporation) which is the subject of such Acquisition
and such Person shall not have announced that it will
oppose such Acquisition or shall not have commenced
any action which alleges that such Acquisition will
violate applicable law.
(iii) The Lead Borrower shall have furnished the
Administrative Agent with thirty (30) days prior
notice of such intended Acquisition and shall have
furnished the Administrative Agent with a business
plan, a current draft of the acquisition agreement,
summary of any due diligence undertaken by the
Borrowers in connection with such Acquisition,
appropriate financial statements of the Person which
is the subject of such Acquisition, pro forma
financial statements for the twelve month period
following such Acquisition after giving effect to
such Acquisition, and such other information as the
Administrative Agent may reasonably require.
(iv) The structure of the Acquisition shall be
acceptable to the Administrative Agent in its
reasonable judgment, which acceptance shall not be
unreasonably withheld or delayed. After consummation
of the Acquisition, a Borrower shall own directly or
indirectly a majority of the equity interests in the
Person being acquired and shall control a majority of
any voting interests, and/or shall otherwise control
the governance of the Person being acquired.
(v) If the Acquisition involves a merger,
consolidation or stock acquisition, the Person which
is the subject of such Acquisition shall be engaged
in a line of business reasonably related to that of
the Lead Borrower or as otherwise permitted pursuant
to Section 4-22 hereof.
(vi) If the Person which is the subject of such
Acquisition will be maintained as a Subsidiary of the
Borrower, the Administrative Agent shall have
received a guaranty of the Liabilities from such
Subsidiary and a security interest in such
Subsidiary's inventory, accounts and other property
of the same nature as constitutes Collateral in order
to secure the Liabilities.
(vii) The total consideration paid for such
Acquisition (in the form of cash, earn outs,
property, or assumption of Indebtedness, exclusive of
common stock of the Lead Borrower) shall not exceed
$150,000,000.00 in the aggregate.
(viii) The aggregate consideration furnished in
connection with Permitted Acquisitions, howsoever
classified (whether in the form of cash, earn outs,
property, or assumption of Indebtedness, exclusive of
common stock of the Lead Borrower) for all
Acquisitions after the Closing Date, after giving
effect to the proposed Acquisition, shall not exceed
$200,000,000.00.
18
(ix) After giving effect to the Acquisition,
Availability shall be at least $200,000,000.00 and
Availability is projected on a pro forma basis to be
at least $200,000,000.00 for the six months
immediately following such Acquisition.
"PERMITTED ENCUMBRANCES": Any of the following:
(a) Encumbrances for taxes not yet due or which are being
contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto
are maintained on the books of the Borrowers in
accordance with GAAP, and provided further that, no
notice of tax lien has been filed with respect
thereto.
(b) Carrier's, warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or similar Encumbrances
arising in the ordinary course of business which are
not overdue by more than thirty (30) days or that are
being contested in good faith by appropriate
proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the
Borrowers in accordance with GAAP.
(c) Pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation.
(d) Deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like
nature in the ordinary course of business.
(e) Easements, rights of way, leases, restrictions and
other similar encumbrances incurred in the ordinary
course of business that in the aggregate are not
substantial in amount and which do not in any case
materially detract from the value of the real estate
subject thereto or materially interfere with the
conduct of the business of the Borrowers.
(f) Any interest or title of a lessor under any lease
entered into by any Borrower in the ordinary course
of business but only with respect to the assets so
leased.
The inclusion of the foregoing as "Permitted Encumbrances" shall not
limit or impair the right of the Administrative Agent to impose
Reserves on account thereof in accordance with the provisions of this
Agreement.
"PERMITTED INVESTMENTS": Each of the following:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing not more than one year from
the date of acquisition thereof;
(b) investments in commercial paper maturing not more
than one year from the date of acquisition thereof and having, at such
date of acquisition, the highest credit rating obtainable from Standard
& Poors or from ▇▇▇▇▇'▇ Investment Services, Inc.;
19
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing not more than one year from the
date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office
of any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (a)
above (without regard to the limitation on maturity contained in such
clause) and entered into with a financial institution satisfying the
criteria described in clause (c) above;
(e) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard &
Poors or from ▇▇▇▇▇'▇ Investment Services, Inc.; and
(f) investments in money market funds, substantially all
the assets of which are comprised of securities of the types described
in clauses (a) through (e) above.
"PERSON": Any natural person, and any corporation, limited liability
company, trust, partnership, joint venture, or other
enterprise or entity.
"POST FORECLOSURE ASSET": All or any part of the Collateral, ownership
of which is acquired by the Administrative Agent or a Nominee
on account of the "bidding in" at a disposition as part of a
Liquidation or by reason of a "deed in lieu" type of
transaction.
"PRIMARY BLOCKED ACCOUNT": Account No. ▇▇▇▇▇▇▇ maintained by the Lead
Borrower with National City Bank, or such other account as the
Borrower may so designate and the Administrative Agent shall
approve (which approval shall not be unreasonably delayed or
withheld). The Primary Blocked Account shall be deemed a
Blocked Account for all purposes of this Agreement.
"PROCEEDS": Includes, without limitation, "Proceeds" as defined in the
UCC and each type of property described in Section 8-1 hereof.
"REALTY SALE": Any sale, lease, conveyance, transfer, financing, or
other disposition by any Borrower (including by way of merger,
consolidation or a sale-leaseback transaction) in any
transaction or group of transactions that are part of a common
plan, of (a) any real estate described on EXHIBIT 1-1 hereto
or (b) any real estate which is presently the subject of a
synthetic lease and is hereafter acquired by any Borrower or
any Subsidiary or Affiliate of any Borrower with proceeds of
the Revolving Credit Loans or any L/C.
"RECEIPTS": All cash, cash equivalents, money, checks, credit card
slips, receipts and other Proceeds from any sale of the
Collateral.
"RECEIVABLES COLLATERAL": That portion of the Collateral which consists
of (i) Accounts, (ii) Instruments arising from, relating to,
or constituting proceeds of, the Borrowers' Accounts and
Inventory, (iii) Documents relating to the Borrowers'
Inventory, (iv) Payment Intangibles arising from, relating to,
or constituting proceeds of, the Borrowers' Accounts and
Inventory, and (v) Letter-of-Credit Rights, bankers'
20
acceptances, and all other rights to payment arising from, or
relating to, or constituting proceeds of, the Borrowers'
Accounts and Inventory.
"REGISTER": Is defined in Section 16-2(c).
"RELATED ENTITY": Any Person in which a Borrower is a partner, joint
venturer, stockholder, or member or in which a Borrower holds
an equity or other ownership interest, and which Person does
not constitute a Subsidiary of any Borrower.
"REQUIREMENTS OF LAW": As to any Person:
(a) Applicable Law.
(b) That Person's organizational documents.
(c) That Person's by-laws and/or other
instruments which deal with corporate or similar governance,
as applicable.
"RESERVE PERCENTAGE": The decimal equivalent of that rate applicable to
a Revolving Credit Lender under regulations issued from time
to time by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement of that
Revolving Credit Lender with respect to "Eurocurrency
liabilities" as defined in such regulations. The Reserve
Percentage applicable to a particular Eurodollar Loan shall be
based upon that in effect during the subject Interest Period,
with changes in the Reserve Percentage which take effect
during such Interest Period to take effect (and to
consequently change any interest rate determined with
reference to the Reserve Percentage) if and when such change
is applicable to such loans.
"RESERVES": The following: Availability Reserves and Inventory
Reserves. Notwithstanding any provisions of this Agreement to
the contrary, (a) the imposition of a new Reserve or a change
to a then existing Reserve may be made only with not less than
ten (10) Business Days prior notice to the Lead Borrower,
except that an increase or decrease in the amount of a then
existing Reserve, which increase or decrease is calculated in
accordance with the same methodology as was utilized to
establish the existing Reserve and merely reflects the results
of mathematical computations of the items already in the
category to which such Reserve applies (such as a change in
the aggregate of Customer Credit Liabilities or leases in
jurisdictions pursuant to which a priority landlord's lien may
exist), may be made without such notice, (b) the
Administrative Agent shall impose a new Reserve or change a
Reserve only utilizing the same criteria as the Administrative
Agent utilizes in imposing or changing Reserves for other of
its similar borrowers, and (c) Availability Reserves imposed
for Rent shall at no time exceed the sum of (i) three months
base rent for any locations in Landlord's Lien States (except
no such Reserve shall be established for locations for which
the Borrowers have obtained a landlord's waiver reasonably
acceptable in form and substance to the Administrative Agent),
plus (ii) subject to the provisions of Section 4-5(d) hereof,
three months base rent for any warehouses utilized by any
Borrower (except no such Reserve shall be established for
warehouses for which the Borrowers have obtained a
warehouseman's waiver reasonably acceptable in form and
substance to the Administrative Agent), plus (iii) an amount
equal to all past due rent and warehouse charges for any of
the Borrowers' locations, wherever located.
"REVOLVING CREDIT": Is defined in Section 2-1.
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"REVOLVING CREDIT CEILING": $550,000,000.00.
"REVOLVING CREDIT COMMITMENT": With respect to each Revolving Credit
Lender, that amount set forth on EXHIBIT 2-22, annexed hereto
(as such amounts may change in accordance with the provisions
of this Agreement).
"REVOLVING CREDIT COMMITMENT FEE": Is defined in Section 2-13.
"REVOLVING CREDIT COMMITMENT PERCENTAGE": With respect to each
Revolving Credit Lender, that percentage set forth on EXHIBIT
2-22, annexed hereto (as such percentages may change in
accordance with the provisions of this Agreement).
"REVOLVING CREDIT EARLY TERMINATION FEE": Is defined in Section 2-16.
"REVOLVING CREDIT LENDERS": Each Person who is or becomes a "Revolving
Credit Lender" in accordance with the provisions of this
Agreement.
"REVOLVING CREDIT LOANS": Loans made under the Revolving Credit, except
that where the term "Revolving Credit Loan" is used with
reference to available interest rates applicable to the loans
under the Revolving Credit, it refers to so much of the unpaid
principal balance of the Loan Account as bears the same rate
of interest for the same Interest Period. (See Section 2-11.
2-ll(c)).
"REVOLVING CREDIT NOTE": Is defined in Section 2-9.
"SEC": The Securities and Exchange Commission.
"STANDBY L/Cs": L/Cs issued pursuant to this Agreement, the drawing
under which does not require the delivery of bills of lading,
airway bills or other similar types of documents of title, or
which are customarily referred to as standby letters of
credit.
"STATED AMOUNT": The maximum amount for which an L/C may be honored.
"SUBSIDIARY": Any corporation, association, partnership, limited
liability company, trust, or other business entity of which
the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes or controlling interests) of the
outstanding voting interests.
"SUPERMAJORITY LENDERS': Prior to termination of the Revolving Credit
Commitments, Revolving Credit Lenders (other than Delinquent
Revolving Credit Lenders) holding 66 2/3% or more of the
Revolving Credit Commitments (other than any Revolving Credit
Commitments held by Delinquent Revolving Credit Lenders).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 66 2/3% or more of the Liabilities
(other than any Liabilities held by Delinquent Revolving
Credit Lenders).
"SUPPORTING OBLIGATION": Has the meaning given that term in the UCC and
also refers to a Letter-of-Credit Right or secondary
obligation which supports the payment or performance of an
Account, a Document, or an Instrument.
"SWINGLINE": The facility pursuant to which the SwingLine Lender may
advance Revolving Credit Loans aggregating up to the SwingLine
Loan Ceiling.
22
"SWINGLINE LENDER": FRFI.
"SWINGLINE LOAN CEILING": $30,000,000.00.
"SWINGLINE LOANS": Defined in Section 2-7.
"SYNDICATION AGENT": Is referred to in the Preamble.
"TERMINATION DATE": The earliest of (a) the Maturity Date; or (b) the
occurrence of any event described in Section 10-10, below; or
(c) the Administrative Agent's notice to the Lead Borrower
setting the Termination Date on account of the occurrence of
any Event of Default other than as described in Section 10-10,
below.
"TRANSFER": Wire transfer pursuant to the wire transfer system
maintained by the Board of Governors of the Federal Reserve
Board, or as otherwise may be agreed to from time to time by
the Administrative Agent making such Transfer and the subject
Revolving Credit Lender. Wire instructions may be changed in
the same manner that Notice Addresses may be changed (Section
17-1), except that no change of the wire instructions for
Transfers to any Revolving Credit Lender shall be effective
without the consent of the Administrative Agent.
"UCC": The Uniform Commercial Code as in effect from time to time in
Massachusetts.
"UNANIMOUS CONSENT": Prior to termination of the Revolving Credit
Commitments, Consent of Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 100% of the
Revolving Credit Commitments (other than Revolving Credit
Commitments held by a Delinquent Revolving Credit Lender).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 100% of the Liabilities (other than
any Liabilities held by Delinquent Revolving Credit Lenders)
"UNUSED FEE": A fee equal to 0.25% per annum of the average difference,
during the quarter just ended (or relevant period with
respect to the payment being made on the Termination Date)
between the Revolving Credit Ceiling and the sum of (a) the
aggregate of the unpaid principal balance of the Revolving
Credit Loans (including the SwingLine Loans) and (b) the
undrawn Stated Amount of L/Cs outstanding during the relevant
period.
ARTICLE 2 - THE REVOLVING CREDIT:
2-1. ESTABLISHMENT OF REVOLVING CREDIT
(a) The Revolving Credit Lenders hereby establish a
revolving line of credit (the "REVOLVING CREDIT") in the Borrowers' favor
pursuant to which each Revolving Credit Lender, subject to, and in accordance
with, this Agreement, acting through the Administrative Agent, shall make loans
and advances and otherwise provide financial accommodations to and for the
account of the Borrowers as provided herein.
(b) Loans, advances, and financial accommodations under
the Revolving Credit shall be made with reference to the Borrowing Base and
shall be subject to Availability. The Borrowing Base and Availability shall be
determined by the Administrative Agent by reference to Borrowing Base
Certificates furnished as provided in Section 5-4, below. Such determination
shall
23
take into account those Reserves as may be applicable thereto. The initial
Reserves as of the date of this Agreement are the following:
(i) Customer Credit Liabilities (an Availability
Reserve): An amount equal to 50% of the
outstanding Customer Credit Liabilities from
time to time.
(ii) Intentionally Omitted.
(iii) Damaged Goods (an Inventory Reserve): An
amount equal to 100% of the return to
vendors Inventory as reflected in the
Borrowers' books and records.
(iv) Rent (an Availability Reserve): An amount
equal to three months base rent for all
Leases in Landlord's Lien States (except no
such Reserve shall be established for
locations for which the Borrowers have
obtained a landlord's waiver reasonably
acceptable in form and substance to the
Administrative Agent), plus (ii) subject to
the provisions of Section 4-5 (d) hereof,
three months base rent for any warehouses
utilized by any Borrower (except no such
Reserve shall be established for warehouses
for which the Borrowers have obtained a
warehouseman's waiver reasonably acceptable
in form and substance to the Administrative
Agent), plus (iii) an amount equal to all
past due rent and warehouse charges for any
of the Borrowers' locations, wherever
located.
(v) In-Transit Inventory Reserve (an Inventory
Reserve): An amount equal to 100% of the
Inventory in transit to any Borrower as
reflected on the Borrowers' perpetual
inventory records.
(vi) Average Consigned Inventory Payables (an
Inventory Reserve). An amount equal to the
average outstanding payables from time to
time on account of inventory consigned to
the Borrowers. For purposes hereof, the
"average outstanding payables" shall mean
the sum of the outstanding payables as of
the first day and as of the last day of each
month divided by two.
(c) The commitment of each Revolving Credit Lender to
provide such loans, advances, and financial accommodations is subject to Section
2-22.
(d) The proceeds of borrowings under the Revolving Credit
shall be used solely to refinance existing Indebtedness and synthetic leases of
the Borrowers, to fund stock repurchases, for the Borrowers' working capital and
Capital Expenditures, all solely to the extent permitted by this Agreement.
2-2. ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS).
(a) No Revolving Credit Lender has any obligation to make
any Revolving Credit Loan, or otherwise to provide any credit to or for the
benefit of the Borrowers where the result of such Revolving Credit Loan or
credit is an OverLoan.
(b) The Revolving Credit Lenders' obligations, among
themselves, are subject to Section 12-3(a) (which relates to each Revolving
Credit Lender's making amounts available to the Administrative Agent) and to
Section 15-3(a) (which relates to Permissible OverLoans).
24
(c) The Revolving Credit Lenders' providing of an
OverLoan on any one occasion does not affect the obligations of each Borrower
hereunder (including each Borrower's obligation to immediately repay any amount
which otherwise constitutes an OverLoan) nor obligate the Revolving Credit
Lenders to do so on any other occasion.
2-3. RISKS OF VALUE OF COLLATERAL. The Administrative Agent's
reference to a given asset in connection with the making of Revolving Credit
Loans and the providing of financial accommodations under the Revolving Credit
and/or the monitoring of compliance with the provisions hereof shall not be
deemed a determination by the Administrative Agent or any Revolving Credit
Lender relative to the actual value of the asset in question. All risks
concerning the value of the Collateral are and remain upon the Borrowers. All
Collateral secures the prompt, punctual, and faithful performance of the
Liabilities whether or not relied upon by the Administrative Agent in connection
with the making of Revolving Credit Loans and the providing of financial
accommodations under the Revolving Credit.
2-4. COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS
OF CREDIT. Subject to the provisions of this Agreement, the Revolving Credit
Lenders shall make a loan or advance under the Revolving Credit and the Issuer
shall issue an L/C for the account of any Borrower, in each instance if duly and
timely requested by the Lead Borrower as provided herein provided that:
(a) Availability will not be exceeded.
(b) No Default has occurred and is continuing.
2-5. REVOLVING CREDIT LOAN REQUESTS.
(a) Requests for Revolving Credit Loans or for the
continuance or conversion of an interest rate applicable to a Revolving Credit
Loan may be requested by the Lead Borrower in such manner as may from time to
time be reasonably acceptable to the Administrative Agent.
(b) Subject to the provisions of this Agreement, the Lead
Borrower may request a Revolving Credit Loan and elect an interest rate and
Interest Period to be applicable to that Revolving Credit Loan by giving notice
to the Administrative Agent by no later than the following:
(i) If such Revolving Credit Loan is to be or is
to be converted to a Base Margin Loan: By 12:00 noon on the Business
Day on which the subject Revolving Credit Loan is to be made or is to
be so converted. Base Margin Loans requested by the Lead Borrower,
other than those resulting from the conversion of a Eurodollar Loan,
shall not be less than $10,000.00.
(ii) If such Revolving Credit Loan is to be, or
is to be continued as, or converted to, a Eurodollar Loan: By 1:OOPM
three (3) Eurodollar Business Days before the commencement of any new
Interest Period or the end of the then applicable Interest Period.
Eurodollar Loans and conversions to Eurodollar Loans shall each be not
less than $1,000,000 and in increments of $1,000,000 in excess of such
minimum.
(iii) Any Eurodollar Loan which matures while a
Default exists shall be converted, at the option of the Administrative
Agent, to a Base Margin Loan notwithstanding any notice from the Lead
Borrower that such Loan is to be continued as a Eurodollar Loan.
(c) Any request for a Revolving Credit Loan or for the
continuance or conversion of an interest rate applicable to a Revolving Credit
Loan which is made after the applicable deadline
25
therefor, as set forth above, shall be deemed to have been made at the opening
of business on the then next Business Day or Eurodollar Business Day, as
applicable.
(d) The Lead Borrower may request that the Administrative
Agent cause the issuance by the Issuer of L/Cs for the account of the Borrowers
as provided in Section 2-17.
(e) The Administrative Agent may rely on any request for
a Revolving Credit Loan or other financial accommodation under the Revolving
Credit which the Administrative Agent, in good faith, believes to have been made
by a Person duly authorized to act on behalf of the Lead Borrower and may
decline to make any such requested loan or advance, or issuance, or to provide
any such financial accommodation pending the Administrative Agent's being
furnished with such documentation concerning that Person's authority to act as
may be satisfactory to the Administrative Agent.
(f) A request by the Lead Borrower for loan or advance,
or other financial accommodation under the Revolving Credit shall be irrevocable
and shall constitute certification by each Borrower that as of the date of such
request, each of the following is true and correct:
(i) Each representation which is made herein or
in any of the Loan Documents is then true and complete in all material
respects as of and as if made on the date of such request (except for
representations that relate to an earlier date, in which case that
representation shall have been true on such earlier date).
(ii) No Default then exists.
(g) If, at any time or from time to time, any Default
exists:
(i) The Administrative Agent may, or at the
request of the Majority Lenders shall, suspend the Revolving Credit
immediately.
(ii) Neither the Administrative Agent nor any
Revolving Credit Lender shall be obligated, during such suspension, to
make any Revolving Credit Loans or to provide any financial
accommodation hereunder nor shall the Administrative Agent, any
Revolving Credit Lender or the Issuer be obligated, during such
suspension, to issue, or cause to be issued, any L/C.
(iii) The Administrative Agent may suspend the
right of the Lead Borrower to request any Eurodollar Loan or to convert
any Base Margin Loan to a Eurodollar Loan.
2-6 MAKING OF REVOLVING CREDIT LOANS.
(a) A Revolving Credit Loan shall be made by the transfer
of the proceeds of such Revolving Credit Loan to the Operating Account or as
otherwise instructed by the Lead Borrower.
(b) A Revolving Credit Loan shall be deemed to have been
made under the Revolving Credit (and the Borrowers shall be indebted to the
Administrative Agent and the Revolving Credit Lenders for the amount thereof
immediately) at the following:
(i) The Administrative Agent's initiation of the
transfer of the proceeds of such Revolving Credit Loan in accordance
with the Lead Borrower's instructions (if such Revolving Credit Loan is
of funds requested by the Lead Borrower).
(ii) The charging of the amount of such Revolving
Credit Loan to the Loan Account (in all other circumstances).
26
(c) There shall not be any recourse to or liability of
the Administrative Agent or any Revolving Credit Lender, on account of:
(i) Any delay in the making of any Revolving
Credit Loan requested under the Revolving Credit.
(ii) Any delay by any bank or other depository
institution in treating the proceeds of any such Revolving Credit Loan
as collected funds.
(iii) Any delay in the receipt, and/or any loss,
of funds which constitute a Revolving Credit Loan under the Revolving
Credit, the wire transfer of which was properly initiated by the
Administrative Agent in accordance with wire instructions provided to
the Administrative Agent by the Lead Borrower.
2-7. SWINGLINE LOANS.
(a) For ease of administration, Base Margin Loans may be
made by the SwingLine Lender (in the aggregate, the "SWINGLINE LOANS") in
accordance with the procedures set forth in this Agreement for the making of
loans and advances under the Revolving Credit, except that the Lead Borrower may
request a SwingLine Loan by giving notice to the Administrative Agent by no
later than 1:OOPM on the Business Day on which the subject SwingLine Loan is to
be made. The unpaid principal balance of the SwingLine Loans shall not at any
one time be in excess of the SwingLine Loan Ceiling.
(b) The aggregate unpaid principal balance of SwingLine
Loans shall bear interest at the rate applicable to Base Margin Loans and shall
be repayable as a loan under the Revolving Credit.
(c) The Borrowers' obligation to repay SwingLine Loans
shall be evidenced by a Note in the form of EXHIBIT 2-7(c), annexed hereto,
executed by the Borrowers, and payable to the SwingLine Lender. Neither the
original nor a copy of that Note shall be required, however, to establish or
prove any Liability. Upon the SwingLine Lender's request and, if applicable, the
delivery of an appropriate lost instrument indemnity, the Borrowers shall
execute a replacement of any SwingLine Note which has been lost, mutilated, or
destroyed thereof and deliver such replacement to the SwingLine Lender.
(d) For all purposes of this Loan Agreement, the
SwingLine Loans and the Borrowers' obligations to the SwingLine Lender
constitute Revolving Credit Loans and are secured as "Liabilities".
(e) SwingLine Loans may be subject to periodic settlement
with the Revolving Credit Lenders as provided in this Agreement.
2-8. THE LOAN ACCOUNT.
(a) An account ("LOAN ACCOUNT") shall be opened on the
books of the Administrative Agent in which a record shall be kept of all
Revolving Credit Loans made and L/Cs issued under the Revolving Credit.
(b) The Administrative Agent shall also keep a record
(either in the Loan Account or elsewhere, as the Administrative Agent may from
time to time elect) of all interest, fees, service charges, costs, expenses, and
other debits owed to the Administrative Agent and each Revolving Credit Lender
on account of the Liabilities and of all credits against such amounts so owed.
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(c) All credits against the Liabilities shall be
conditional upon final payment to the Administrative Agent for the account of
each Revolving Credit Lender of the items giving rise to such credits. The
amount of any item credited against the Liabilities which is charged back
against the Administrative Agent or any Revolving Credit Lender for any reason
or is not so paid shall be a Liability and shall be added to the Loan Account,
whether or not the item so charged back or not so paid is returned.
(d) Except as otherwise provided herein, all fees,
service charges, costs, and expenses for which any Borrower is obligated
hereunder are payable on demand. In the determination of Availability, the
Administrative Agent may deem fees, service charges, accrued interest, and other
payments which will be due and payable between the date of such determination
and the first day of the then next succeeding month as having been advanced
under the Revolving Credit whether or not such amounts are then due and payable.
(e) The Administrative Agent, without the request of the
Lead Borrower, may advance under the Revolving Credit any interest, fee, service
charge, or other payment to which the Administrative Agent or any Revolving
Credit Lender is entitled from any Borrower pursuant hereto and may charge the
same to the Loan Account notwithstanding that such amount so advanced may result
in the Borrowing Base being exceeded. Such action on the part of the
Administrative Agent shall not constitute a waiver of the Administrative Agent's
rights and each Borrower's obligations under Section 2-10(b). Any amount which
is added to the principal balance of the Loan Account as provided in this
Section 2-8(e) shall bear interest at the interest rate then and thereafter
applicable to Base Margin Loans.
(f) Any statement rendered by the Administrative Agent or
any Revolving Credit Lender to the Lead Borrower concerning the Liabilities
shall be considered correct and accepted by each Borrower and shall be
conclusively binding upon each Borrower unless the Lead Borrower provides the
Administrative Agent with written objection thereto within one hundred twenty
(120) days from the mailing of such statement, which written objection shall
indicate, with particularity, the reason for such objection. The Loan Account
and the Administrative Agent's books and records concerning the loan arrangement
contemplated herein and the Liabilities shall be prima facie evidence and proof
of the items described therein.
2-9. THE REVOLVING CREDIT NOTES. The Borrowers' obligation to
repay loans and advances under the Revolving Credit, with interest as provided
herein, shall be evidenced by Notes (each, a "REVOLVING CREDIT NOTE") in the
form of EXHIBIT 2-9, annexed hereto, executed by each Borrower, one payable to
each Revolving Credit Lender. Neither the original nor a copy of any Revolving
Credit Note shall be required, however, to establish or prove any Liability.
Upon a Revolving Lender's request and, if applicable, the delivery of an
appropriate lost instrument indemnity, each Borrower shall execute a replacement
thereof and deliver such replacement to the Administrative Agent in the event
that any Revolving Credit Note is ever lost, mutilated, or destroyed.
2-10. PAYMENT OF THE LOAN ACCOUNT.
(a) The Borrowers may repay all or any portion of the
principal balance of the Loan Account from time to time until the Termination
Date.
(b) The Borrowers, without notice or demand from the
Administrative Agent or any Revolving Credit Lender, shall pay the
Administrative Agent that amount, from time to time, which is necessary so that
there is no OverLoan outstanding.
(c) During the continuance of a Cash Control Event, the
Borrowers shall repay the Revolving Credit
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(i) in an amount equal to the proceeds realized
from the sale or other disposition of, or realization upon, any
Collateral;
(ii) in an amount equal to the proceeds realized
from any Realty Sale, Capital Event and/or condemnation and casualty insurance
proceeds received by any Borrower to the extent that such proceeds are not
reinvested in replacement assets within 180 days after the date of receipt of
such proceeds; and
(iii) in accordance with the provisions of Article
7 hereof.
All amounts prepaid under this Section 2-10(c) may be reborrowed under the
Revolving Credit, subject to and in accordance with, the terms of this
Agreement.
(d) The Borrowers shall repay the then entire unpaid
balance of the Loan Account and all other Liabilities on the Termination Date.
(e) No payment of Eurodollar Loans shall be permitted
hereunder other than on the last day of an Interest Period applicable thereto,
unless the Borrowers simultaneously reimburses the Revolving Credit Lenders for
all amounts described in Section 2-10(f) below associated therewith. In order to
avoid payment of the amounts described in Section 2-10(f) below, as long as no
Event of Default has occurred and is continuing, at the request of the Lead
Borrower, the Administrative Agent shall hold all amounts required to be applied
to Eurodollar Loans in a non-interest bearing cash collateral account and will
apply such funds to the applicable Eurodollar Loans at the end of the then
pending Interest Period therefor (provided that the foregoing shall in no way
limit or restrict the Administrative Agent's rights upon the subsequent
occurrence of an Event of Default).
(f) The Borrowers shall indemnify the Administrative
Agent and each Revolving Credit Lender and hold the Administrative Agent and
each Revolving Credit Lender harmless from and against any loss, cost or expense
(including loss of anticipated profits and amounts payable by the Administrative
Agent or such Revolving Credit Lender on account of "breakage fees" (so-called))
which the Administrative Agent or such Revolving Credit Lender may sustain or
incur (including, without limitation, by virtue of acceleration after the
occurrence of any Event of Default) as a consequence of the following:
(i) Default by any Borrower in payment of the
principal amount of or any interest on any Eurodollar Loan as and when
due and payable, including any such loss or expense arising from
interest or fees payable by such Revolving Credit Lender in order to
maintain its Eurodollar Loans.
(ii) Default by any Borrower in making a
borrowing or conversion after the Lead Borrower has given (or is deemed
to have given) a request for a Revolving Credit Loan or a request to
convert a Revolving Credit Loan from one applicable interest rate to
another.
(iii) The making of any payment on a Eurodollar
Loan or the making of any conversion of any such Loan to a Base Margin
Loan on a day that is not the last day of the applicable Interest
Period with respect thereto.
2-11. INTEREST ON REVOLVING CREDIT LOANS.
(a) Each Revolving Credit Loan shall bear interest at the
Base Margin Rate unless timely notice is given (as provided in Section 2-5) that
the subject Revolving Credit Loan (or a portion thereof) is, or is to be
converted to, a Eurodollar Loan.
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(b) Each Revolving Credit Loan which consists of a
Eurodollar Loan shall bear interest at the applicable Eurodollar Rate.
(c) Subject to, and in accordance with, the provisions of
this Agreement, the Lead Borrower may cause all or a part of the unpaid
principal balance of the Loan Account to bear interest at the Base Margin Rate
or the Eurodollar Rate as specified from time to time by the Lead Borrower.
(d) The Lead Borrower shall not select, renew, or convert
any interest rate for a Revolving Credit Loan such that, in addition to interest
at the Base Margin Rate, there are more than eight (8) Eurodollar Rates
applicable to the Revolving Credit Loans at any one time.
(e) The Borrowers shall pay accrued and unpaid interest
on each Revolving Credit Loan in arrears as follows:
(i) On the applicable Interest Payment Date for
that Revolving Credit Loan.
(ii) On the Termination Date and on the End Date.
(iii) During the existence of any Event of
Default, with such frequency as may be determined by the Administrative
Agent.
(f) During the existence of any Event of Default (and
whether or not the Administrative Agent exercises the Administrative Agent's
rights on account thereof), all Revolving Credit Loans shall bear interest, at
the option of the Administrative Agent or at the instruction of the Majority
Lenders at a rate which is the aggregate of the rate applicable to Base Margin
Loans plus two percent (2%) per annum.
(g) Interest shall be calculated (i) with respect to Base
Margin Loans, on the basis of a 365 day year and for actual days elapsed, and
(ii) with respect to Eurodollar Loans, on the basis of a 360 day year and for
actual days elapsed. L/C Fees, the Line Fee and Unused Fees shall be calculated
on the basis of a 365 day year and for actual days elapsed.
2-12 VOLUNTARY REDUCTION OF COMMITMENT AND REVOLVING CREDIT
CEILING. The Lead Borrower may reduce, or terminate, the Revolving Credit
Commitments and the Revolving Credit Ceiling, in whole or in part from time to
time, by furnishing three (3) Business Days' written notice to the
Administrative Agent, whereupon the Revolving Credit Commitments of the
Revolving Credit Lenders shall be reduced pro rata in accordance with their
respective Revolving Credit Commitment Percentages. Upon the effective date of
any such reduction, (a) the Borrowers shall pay to the Administrative Agent for
the benefit of the Revolving Credit Lenders a pro rata portion of any Revolving
Credit Early Termination Fee due as a result of such reduction or termination
(based upon the amount of the reduction to the then Revolving Credit
Commitments), (b) the Borrowers shall pay to the Administrative Agent for the
benefit of the Revolving Credit Lenders the accrued Unused Fee as of the date of
such reduction or termination, and (c) the Borrowers shall pay to the
Administrative Agent for the benefit of the Revolving Credit Lenders any amounts
required under Section 2-10(b) and Section 2-10(f) hereof. No reduction or
termination of the Revolving Credit Commitments or the Revolving Credit Ceiling
may be reinstated.
2-13. REVOLVING CREDIT COMMITMENT FEE. In consideration of the
commitment to make loans and advances to the Borrowers under the Revolving
Credit, and to maintain sufficient funds available for such purpose, there has
been earned and the Borrowers shall pay the "REVOLVING CREDIT COMMITMENT FEE"
(so referred to herein) in the amount and payable as provided in the Fee Letter.
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2-14. ADMINISTRATIVE AGENT'S FEE. In addition to any other fee or
expense to be paid by the Borrowers on account of the Revolving Credit, the
Borrowers shall pay the Administrative Agent the " ADMINISTRATIVE AGENT'S FEE"
at the times and in the amounts as set forth in the Fee Letter.
2-15. UNUSED FEE. In addition to any other fee to be paid by the
Borrowers on account of the Revolving Credit, each Revolving Credit Lender shall
be paid the Line Fee at the times and in the manner set forth below. The
Borrowers shall pay to the Administrative Agent for the account of the Revolving
Credit Lenders, the Unused Fee. If the Unused Fee actually paid by the Borrowers
is insufficient to pay an amount equal to the Line Fee to the Revolving Credit
Lenders, the deficiency shall be paid to the Revolving Credit Lenders by the
SwingLine Lender from its own funds (and the Borrowers shall have no liability
with respect thereto). The Administrative Agent shall pay the Line Fee (and any
amounts payable by the SwingLine Lender hereunder) to the Revolving Credit
Lenders based upon their pro rata share of an amount equal to the aggregate Line
Fee due to all Revolving Credit Lenders; provided that for purposes of
calculating the pro rata share of any Person which is both the SwingLine Lender
and a Revolving Credit Lender, such Person's share shall be equal to the
difference between (i) the sum of such Person's Revolving Credit Commitment, and
(ii) the sum of (A) such Person's Revolving Credit Commitment Percentage of the
principal amount of the Revolving Loans then outstanding (including the
principal amount of SwingLine Loans then outstanding), and (B) such Person's
Revolving Credit Commitment Percentage of the then undrawn Stated Amount of
outstanding L/Cs. The Unused Fee shall be paid in arrears, on the first day of
each quarter after the execution of this Agreement and on the Termination Date.
2-16. EARLY TERMINATION FEE.
In the event that the Termination Date occurs, for any reason,
prior to the second anniversary of this Amended and Restated Loan and Security
Agreement (other than by virtue of the Borrowers' refinancing of the Liabilities
with FRFI or any of its Affiliates, as agent for the refinancing lenders), the
Borrowers shall pay to the Administrative Agent, for the benefit of the
Revolving Credit Lenders, a "REVOLVING CREDIT EARLY TERMINATION FEE" (so
referred to herein) in an amount equal to (a) one-half of one percent (0.50%) of
the Revolving Credit Commitments in effect on the date of this Agreement, if the
Termination Date occurs before May 3, 2004, or (b) one quarter of one percent
(0.25%) of the Revolving Credit Commitments in effect on the date of this
Agreement, if the Termination Date occurs on or after May 3, 2004 and on or
before May 3, 2005. In addition, in the event that the Revolving Commitments are
reduced prior to the second anniversary hereof pursuant to Section 2-12 hereof,
the Borrower shall pay to the Administrative Agent, for the benefit of the
Revolving Credit Lenders, a pro rata portion of the Revolving Credit Early
Termination Fee based on the amount of reduction, provided that no Revolving
Credit Early Termination Fee shall be payable with respect to any voluntary
reduction of the Revolving Commitments to an amount equal to or greater than
$400,000,000.
2-17. PROCEDURES FOR ISSUANCE OF L/Cs.
(a) The Lead Borrower may request that the Administrative
Agent cause the issuance by the Issuer of L/Cs for the account of any Borrower.
Each such request shall be in such manner as may from time to time be acceptable
to the Administrative Agent.
(b) The Issuer shall issue any L/C so requested by the
Lead Borrower, provided that, at the time that the request is made, the
Revolving Credit has not been suspended as provided in Section 2-5 (g) and if so
issued:
(i) The aggregate Stated Amount of all L/Cs then
outstanding, does not exceed Two Hundred Million Dollars and No Cents
($200,000,000.00).
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(ii) The expiry of the L/C is not later than the
earlier of thirty (30) days prior to the Maturity Date or the
following:
(A) Standby's: One (1) year from
initial issuance.
(B) Documentary's: One hundred eighty
(180) days from issuance,
(iii) An OverLoan will not result from the
issuance of the subject L/C.
(c) Each Borrower shall execute such documentation to
apply for and support the issuance of an L/C as may be required by the Issuer.
(d) There shall not be any recourse to, nor liability of,
the Administrative Agent or any Revolving Credit Lender on account of
(i) Any delay or refusal by an Issuer to issue
an L/C;
(ii) Any action or inaction of an Issuer on
account of or in respect to, any L/C.
(e) The Borrowers shall reimburse the Issuer for the
amount of any honoring of a drawing under an L/C on the same day on which such
honoring takes place. The Administrative Agent, without the request of any
Borrower, may advance under the Revolving Credit (and charge to the Loan
Account) the amount of any honoring of any L/C and other amount for which any
Borrower, the Issuer, or the Revolving Credit Lenders become obligated on
account of, or in respect to, any L/C. Such advance shall be made whether or not
any Default exists or such advance would result in an OverLoan. Such action
shall not constitute a waiver of the Administrative Agent's rights under Section
2-10(b) hereof.
2-18. FEES FOR L/Cs.
(a) The Borrowers shall pay to the Administrative Agent
(for the benefit of the Revolving Credit Lenders) a fee, on account of L/Cs, the
issuance of which had been procured by the Administrative Agent, quarterly in
arrears, and on the Termination Date and on the End Date, equal to the
following:
(i) With respect to Standby L/Cs issued in
connection with the synthetic leases
described on EXHIBIT 2-18: At a rate per
annum equal to 0.375% less than the
Applicable Margin for Eurodollar Loans at
the time of calculation of such fees
multiplied by the weighted average Stated
Amount of all such Standby L/Cs outstanding
during the period in respect of which such
fee is being paid; and
(ii) With respect to all other Standby L/Cs: At a
rate per annum equal to 0.125% less than the
Applicable Margin for Eurodollar Loans at
the time of calculation of such fees
multiplied by the weighted average Stated
Amount of all such Standby L/Cs outstanding
during the period in respect of which such
fee is being paid; and
(iii) With respect to all Documentary L/Cs: At a
rate per annum equal to 0.50% less than the
Applicable Margin for Eurodollar Loans at
the time of calculation of such fees
multiplied by the weighted average Stated
32
Amount of all such Documentary L/Cs
outstanding during the period in respect of
which such fee is being paid;
provided that, during the existence of any Event of Default, such fees shall be
increased by two percent (2%) per annum.
(b) In addition to the fees to be paid as provided in
Subsection 2-18(a), above, the Borrowers shall pay to the Administrative Agent
(or to the Issuer, if so requested by Administrative Agent), on demand, all
issuance, processing, negotiation, amendment, and administrative fees and other
amounts charged by the Issuer on account of, or in respect to, any L/C.
(c) If any change in Applicable Law shall either:
(i) impose, modify or deem applicable any
reserve, special deposit or similar requirements against letters of
credit heretofore or hereafter issued by any Issuer or with respect to
which any Revolving Credit Lender or any Issuer has an obligation to
lend to fund drawings under any L/C; or
(ii) impose on any Issuer any other condition or
requirements relating to any such letters of credit;
and the result of any event referred to in Section 2-18(c)(i) or 2-18(c)(ii),
above, shall be to increase the cost to any Revolving Credit Lender or to any
Issuer of issuing or maintaining any L/C (which increase in cost shall be the
result of such Issuer's reasonable allocation among that Revolving Credit
Lender's or Issuer's letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Lead Borrower of a
certificate of an officer of the subject Revolving Credit Lender or the subject
Issuer describing such change in law, executive order, regulation, directive, or
interpretation thereof, its effect on such Revolving Credit Lender or such
Issuer, and the basis for determining such increased costs and their allocation,
the Borrowers shall, within thirty (30) days after demand therefor, pay to the
Administrative Agent, from time to time as specified by the Administrative
Agent, such amounts as shall be sufficient to compensate the subject Revolving
Credit Lender or the subject Issuer for such increased cost. Any Revolving
Credit Lender's or any Issuer's determination of costs incurred under Section
2-18(c)(i) or 2-18(c)(ii), above, and the allocation, if any, of such costs
among the Borrowers and other letter of credit customers of such Revolving
Credit Lender or such Issuer, if done in good faith and made on an equitable
basis and in accordance with such officer's certificate, shall be conclusive and
binding on the Borrowers.
2-19. CONCERNING L/CS.
(a) None of the Issuer, the Issuer's correspondents, any
Revolving Credit Lender, the Administrative Agent, or any advising, negotiating,
or paying bank with respect to any L/C shall be responsible in any way for:
(i) The performance by any beneficiary under any
L/C of that beneficiary's obligations to any Borrower.
(ii) The form, sufficiency, correctness,
genuineness, authority of any person signing; falsification; or the
legal effect of; any documents called for under any L/C if (with
respect to the foregoing) such documents on their face appear to be in
order.
(b) The Issuer may honor, as complying with the terms of
any L/C and of any drawing thereunder, any drafts or other documents otherwise
in order, but signed or issued by an
33
administrator, executor, conservator, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver, or
other legal representative of the party authorized under such L/C to draw or
issue such drafts or other documents.
(c) Unless otherwise agreed to, in the particular
instance, each Borrower hereby authorizes any Issuer to:
(i) Select an advising bank, if any.
(ii) Select a paying bank, if any.
(iii) Select a negotiating bank.
(d) All directions, correspondence, and funds transfers
relating to any L/C are at the risk of the Borrowers. The Issuer shall have
discharged the Issuer's obligations under any L/C which, or the drawing under
which, includes payment instructions, by the initiation of the method of payment
called for in, and in accordance with, such instructions (or by any other
commercially reasonable and comparable method). None of the Administrative
Agent, any Revolving Credit Lender, or the Issuer shall have any responsibility
for any inaccuracy, interruption, error, or delay in transmission or delivery by
post, telegraph or cable, or for any inaccuracy of translation.
(e) The Administrative Agent's, each Revolving Credit
Lender's, and the Issuer's rights, powers, privileges and immunities specified
in or arising under this Agreement are in addition to any heretofore or at any
time hereafter otherwise created or arising, whether by statute or rule of law
or contract.
(f) Except to the extent otherwise expressly provided
hereunder or agreed to in writing by the Issuer and the Lead Borrower,
documentary L/Cs will be governed by the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce, Publication No. 500, and
standby L/Cs will be governed by International Standby Practices ISP98 (adopted
by the International Chamber of Commerce on April 6, 1998) and any respective
subsequent revisions thereof.
(g) The obligations of the Borrowers under this Agreement
with respect to L/Cs are absolute, unconditional, and irrevocable and shall be
performed strictly in accordance with the terms hereof under all circumstances,
whatsoever including, without limitation, the following:
(i) Any lack of validity or enforceability or
restriction, restraint, or stay in the enforcement of this Agreement,
any L/C, or any other agreement or instrument relating thereto.
(ii) Any Borrower's consent to any amendment or
waiver of, or consent to the departure from, any L/C.
(iii) The existence of any claim, set-off,
defense, or other right which any Borrower may have at any time against
the beneficiary of any L/C.
(iv) Absent the gross negligence or willful
misconduct of the Issuer, any honoring of a drawing under any L/C,
which drawing possibly could have been dishonored due to a non-material
technicality based upon a strict construction of the terms of the L/C.
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2-20. CHANGED CIRCUMSTANCES.
(a) The Administrative Agent may advise the Lead Borrower
that the Administrative Agent has made the good faith determination (which
determination shall be final and conclusive) of any of the following:
(i) Adequate and fair means do not exist for
ascertaining the rate for Eurodollar Loans.
(ii) The continuation of or conversion of any
Revolving Credit Loan to a Eurodollar Loan has been made impracticable
or unlawful by the occurrence of a contingency that materially and
adversely affects the applicable market or the compliance by the
Administrative Agent or any Revolving Credit Lender in good faith with
any Applicable Law.
(iii) The indices on which the interest rates for
Eurodollar Loans are based shall no longer represent the effective cost
to the Administrative Agent or any Revolving Credit Lender for U.S.
dollar deposits in the interbank market for deposits in which it
regularly participates.
(b) In the event that the Administrative Agent advises
the Lead Borrower of an occurrence described in Section 2-20(a), then, until the
Administrative Agent notifies the Lead Borrower that the circumstances giving
rise to such notice no longer apply:
(i) The obligation of the Administrative Agent
or each Revolving Credit Lender to make loans of the type affected by
such changed circumstances or to permit the Lead Borrower to select the
affected interest rate as otherwise applicable to any Revolving Credit
Loans shall be suspended.
(ii) Any notice which the Lead Borrower had given
the Administrative Agent with respect to any Eurodollar Loan, the time
for action with respect to which has not occurred prior to the
Administrative Agent's having given notice pursuant to Section 2-20(a),
shall be deemed at the option of the Administrative Agent to not having
been given.
2-21. DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably designates and
appoints the Lead Borrower as that Borrower's agent to obtain Revolving Credit
Loans and L/Cs under the Revolving Credit, the proceeds of which shall be
available to each Borrower for those uses as those set forth in Section 2- l(d).
As the disclosed principal for its agent, each Borrower shall be obligated to
the Administrative Agent and each Revolving Credit Lender on account of
Revolving Credit Loans so made and L/Cs so issued under the Revolving Credit as
if made directly by the Revolving Credit Lenders to that Borrower,
notwithstanding the manner by which such Revolving Credit Loans and L/Cs are
recorded on the books and records of the Lead Borrower and of any Borrower.
(b) Each Borrower recognizes that credit available to it
under the Revolving Credit is in excess of and on better terms than it otherwise
could obtain on and for its own account and that one of the reasons therefor is
its joining in the credit facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes and agrees to discharge all
Liabilities of all other Borrowers as if the Borrower so assuming were each
other Borrower.
(c) The Lead Borrower shall act as a conduit for each
Borrower (including itself, as a "Borrower") on whose behalf the Lead Borrower
has requested a Revolving Credit Loan.
35
(d) The proceeds of each loan and advance provided under
the Revolving Credit which is requested by the Lead Borrower shall be deposited
into the Operating Account or as otherwise indicated by the Lead Borrower. The
Lead Borrower shall cause the transfer of the proceeds thereof to the (those)
Borrower(s) on whose behalf such loan and advance was obtained. Neither the
Administrative Agent nor any Revolving Credit Lender shall have any obligation
to see to the application of such proceeds.
(e) If, for any reason, and at any time during the term
of this Agreement,
(i) any Borrower, including the Lead Borrower,
as agent for the Borrowers, shall be unable to, or prohibited from
carrying out the terms and conditions of this Agreement (as determined
by the Administrative Agent in the Administrative Agent's sole and
absolute discretion); or
(ii) the Administrative Agent deems it
inexpedient (in the Administrative Agent's sole and absolute
discretion) to continue making Revolving Credit Loans and issue L/Cs to
or for the account of any particular Borrower, or to channel such
Revolving Credit Loans and L/Cs through the Lead Borrower,
then the Revolving Credit Lenders may make Revolving Credit Loans directly to,
and issue L/Cs directly for the account of such of the Borrowers as the
Administrative Agent determines to be expedient, which loans or advances may be
made without regard to the procedures otherwise included herein.
(f) In the event that the Administrative Agent determines
to forgo the procedures included herein pursuant to which Revolving Credit Loans
and L/Cs are to be channeled through the Lead Borrower, then the Administrative
Agent may designate one or more of the Borrowers to fulfill the financial and
other reporting requirements otherwise imposed herein upon the Lead Borrower.
(g) Each of the Borrowers shall remain liable to the
Administrative Agent and the Revolving Credit Lenders for the payment and
performance of all Liabilities (which payment and performance shall continue to
be secured by all Collateral granted by each of the Borrowers) notwithstanding
any determination by the Administrative Agent to cease making Revolving Credit
Loans or L/Cs to or for the benefit of any Borrower.
(h) The authority of the Lead Borrower to request loans
on behalf of, and to bind, the Borrowers, shall continue unless and until the
Administrative Agent acts as provided in Section 2-21(e), above, or the
Administrative Agent actually receives
(i) written notice of: (i) the termination of such
authority, and (ii) the subsequent appointment of a successor Lead Borrower,
which notice is signed by the respective Presidents of each Borrower (other than
the President of the Lead Borrower being replaced) then eligible for borrowing
under this Agreement; and
(j) written notice from such successive Lead Borrower (i)
accepting such appointment; (ii) acknowledging that such removal and appointment
has been effected by the respective Presidents of such Borrowers eligible for
borrowing under this Agreement; and (iii) acknowledging that from and after the
date of such appointment, the newly appointed Lead Borrower shall be bound by
the terms hereof, and that as used herein, the term "Lead Borrower" shall mean
and include the newly appointed Lead Borrower.
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2-22. LENDERS ' COMMITMENTS
(a) Subject to Section 16-1 (which provides for
assignments and assumptions of commitments), each Revolving Credit Lender's
'REVOLVING CREDIT COMMITMENT PERCENTAGE", and "REVOLVING CREDIT COMMITMENT"
(respectively so referred to herein) is set forth on EXHIBIT 2-22, annexed
hereto.
(b) The obligations of each Revolving Credit Lender are
several and not joint. No Revolving Credit Lender shall have any obligation to
make any loan or advance under the Revolving Credit in excess of the lesser of
the following:
(i) That Revolving Credit Lender's Revolving
Credit Commitment Percentage of the subject loan or advance or of
Availability.
(ii) that Revolving Credit Lender's Revolving
Credit Commitment.
(c) No Revolving Credit Lender shall have any liability
to the Borrowers on account of the failure of any other Revolving Credit Lender
to provide any loan or advance under the Revolving Credit nor any obligation to
make up any shortfall which may be created by such failure.
(d) The Revolving Credit Commitments, Revolving Credit
Commitment Percentages, and identities of the Revolving Credit Lenders may be
changed, from time to time by the reallocation or assignment of Revolving Credit
Commitments and Revolving Credit Commitment Percentages amongst the Revolving
Credit Lenders or with other Persons who determine to become "Revolving Credit
Lenders" in accordance with the provisions of Article 16 hereof', provided,
however FRFI shall at all times prior to the occurrence of an Event of Default
retain at least ten percent (10%) of the Revolving Credit Commitments
outstanding from time to time.
(e) Upon written notice given the Lead Borrower from time
to time by the Administrative Agent, of any assignment or allocation referenced
in Section 2-22(d):
(i) Each Borrower shall execute one or more
replacement Revolving Credit Notes to reflect such changed Revolving
Credit Commitments, Revolving Credit Commitment Percentages, and
identities and shall deliver such replacement Revolving Credit Notes to
the Administrative Agent (which promptly thereafter shall deliver to
the Lead Borrower the Revolving Credit Notes so replaced) provided
however, in the event that a Revolving Credit Note is to be exchanged
following its acceleration or the entry of an order for relief under
the Bankruptcy Code with respect to any Borrower, the Administrative
Agent, in lieu of causing the Borrowers to execute one or more new
Revolving Credit Notes, may issue the Administrative Agent's
Certificate confirming the resulting Revolving Credit Commitments and
Revolving Credit Commitment Percentages.
(ii) Such change shall be effective from the
effective date specified in such written notice and any Person added as
a Revolving Credit Lender shall have all rights and privileges of a
Revolving Credit Lender hereunder thereafter as if such Person had been
a signatory to this Agreement and any other Loan Document to which a
Revolving Credit Lender is a signatory and any Person removed as a
Revolving Credit Lender shall be relieved of any obligations or
responsibilities of a Revolving Credit Lender hereunder thereafter.
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2-23. REPLACEMENT OF REVOLVING CREDIT LENDER
(a) If any Revolving Credit Lender requests compensation
under Sections 2-18 (c) or 19-8, then such Revolving Credit Lender shall use its
reasonable best efforts to designate a different lending office for funding or
booking L/Cs hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Revolving Credit Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Sections 2-18(c) or 19-8, in the future and
(ii) would not subject such Revolving Credit Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Revolving Credit
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Revolving Credit Lender in connection with any such designation
or assignment.
(b) If any Revolving Credit Lender requests compensation
under Sections 2-18 (c) or 19-8, then the Borrowers may, at their sole expense
and effort, upon notice to such Revolving Credit Lender and the Administrative
Agent, require such Revolving Credit Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Article 16), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Revolving Credit Lender, if a Revolving Credit Lender accepts such assignment),
provided that (i) if such assignee is not an existing Revolving Credit Lender,
the Borrowers shall have received the prior written consent of the
Administrative Agent, the Issuers and SwingLine Lender, which consent shall not
unreasonably be delayed or withheld, (ii) such Revolving Credit Lender shall
have received payment of an amount equal to the outstanding principal of its
Revolving Credit Loans and participations in unreimbursed drawings under L/Cs
and SwingLine Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts) and (iii) such assignment will result in a reduction
in such compensation, payments or costs. A Revolving Credit Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Revolving Credit Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.
ARTICLE 3 - CONDITIONS PRECEDENT:
As a condition to the effectiveness of this Agreement, each of the
documents respectively described in Sections 3-1 through and including 3-5,
(each in form and substance satisfactory to the Administrative Agent) shall have
been delivered to the Administrative Agent, and the conditions respectively
described in Sections 3-6 through and including 3-18, shall have been satisfied:
3-1. CORPORATE DUE DILIGENCE.
(a) Certificates of corporate good standing for each
Borrower, respectively issued by the Secretary of State for the state in which
that Borrower is incorporated.
(b) Certificates of due qualification, in good standing,
issued by the Secretary(ies) of State of each State in which the nature of the
business conducted by OfficeMax, Inc., or assets owned by OfficeMax, Inc. could
require such qualification.
(c) Certificates of each Borrower's Secretary of the due
adoption, continued effectiveness, and setting forth the texts of, each
corporate resolution adopted in connection with the establishment of the loan
arrangement contemplated by the Loan Documents and attesting to the true
signatures of each Person authorized as a signatory to any of the Loan
Documents.
3-2. OPINION. An opinion of counsel to the Borrowers in form and
substance reasonably satisfactory to the Administrative Agent.
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3-3 TRI-PARTY AGREEMENT. An agreement in form and substance
reasonably satisfactory to the Administrative Agent with OMX, Inc. furnishing
the Administrative Agent with rights to use the Lead Borrower's distribution
facility in Las Vegas, Nevada and certain trademarks owned by said OMX, Inc.
during the existence of an Event of Default.
3-4. ADDITIONAL DOCUMENTS. Such additional instruments and
documents as the Administrative Agent or its counsel may reasonably require or
request including, without limitation, the documents described on EXHIBIT 3-4
hereto.
3-5. OFFICERS ' CERTIFICATES. Certificates executed by the
President and the Chief Financial Officer of the Lead Borrower and stating that
the representations and warranties made by the Borrowers to the Administrative
Agent and the Revolving Credit Lenders in the Loan Documents are true and
complete in all material respects as of the date of such Certificate, and that
no event has occurred which is or which, solely with the giving of notice or
passage of time (or both) would be an Event of Default.
3-6 DUE DILIGENCE. The Administrative Agent shall have completed
its due diligence to its reasonable satisfaction. Without limiting the
foregoing, the Administrative Agent shall have received commercial finance
examinations, appraisals of the Borrowers' inventory, and such other information
(financial or otherwise) as the Administrative Agent may reasonably request, and
such examinations, appraisals and information shall be reasonably satisfactory
to the Administrative Agent.
3-7. REPRESENTATIONS AND WARRANTIES. Each of the representations
made by or on behalf of each Borrower in this Agreement or in any of the other
Loan Documents or in any other report, statement, document, or paper provided by
or on behalf of each Borrower shall be true and complete in all material
respects as of the date as of which such representation or warranty was made.
3-8. ALL FEES AND EXPENSES PAID. (a) The Borrowers shall have paid
to the Administrative Agent for the account of each Revolving Credit Lender an
amendment fee in an amount equal to 0.375% of each such Revolving Credit
Lender's Revolving Credit Commitment. Such amendment fee shall be fully earned
upon the execution hereof and shall not be subject to refund or rebate under any
circumstances.
(b) All other fees due at or immediately after the
effectiveness of this Agreement and all costs and expenses incurred by the
Administrative Agent in connection with the credit facility contemplated hereby
(including the fees and expenses of counsel to the Administrative Agent) shall
have been paid in full.
3-9. NO DEFAULT. No Default shall then exist.
3-10. NO ADVERSE CHANGE. No event shall have occurred or failed to
occur, which occurrence or failure has had or could reasonably be expected to
have a materially adverse effect upon any Borrower's financial condition,
operations, assets or income when compared with such at the Fiscal quarter
ending on or about October 31, 2002.
3-11 PERFECTION OF ENCUMBRANCES. The Administrative Agent shall
have received all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the first priority
Encumbrances intended to be created under the Loan Documents
and all such documents and instruments shall have been so
filed, registered or recorded to the satisfaction of the
Administrative Agent.
3-12 INTENTIONALLY OMITTED.
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3-13 CONSENTS AND APPROVALS. All necessary consents and approvals
to the transactions contemplated hereby shall have been obtained and shall be
reasonably satisfactory to the Administrative Agent.
3-14 No DEFAULTS UNDER APPLICABLE LAW OR MATERIAL AGREEMENTS. The
consummation of the transactions contemplated hereby shall not (a) violate any
Requirement of Law or (b) conflict with, or result in a default or event of
default under, any material agreement of any Borrower. No event shall exist
which is, or solely with the passage of time, the giving of notice or both,
would be a default under any material agreement of any Borrower including,
without limitation, under the synthetic leases to which any Borrower or any
Affiliate of any Borrower is a party.
3-15 No LITIGATION. There shall not exist any litigation or other
proceedings the result of which would have a material adverse effect on the
Borrowers, their financial condition or business, taken as a whole.
3-16 INTENTIONALLY OMITTED.
3-17 No CHANGE IN GOVERNMENTAL REGULATIONS. No material changes
shall have occurred in governmental regulations or policies affecting the
Borrowers, the Administrative Agent or the Revolving Credit Lenders prior to the
Closing Date.
3-18. BENEFIT OF CONDITIONS PRECEDENT. The conditions set forth in
this Article 3 are for the sole benefit of the Administrative Agent and each
Revolving Credit Lender and may be waived by the Administrative Agent in whole
or in part without prejudice to the Administrative Agent or any Revolving Credit
Lender.
No document shall be deemed delivered to the Administrative Agent or any
Revolving Credit Lender until received and accepted by the Administrative Agent
at its offices in Boston, Massachusetts. Under no circumstances shall this
Agreement take effect until executed and accepted by the Administrative Agent at
said offices.
ARTICLE 4 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:
To induce each Revolving Credit Lender and the Issuer to establish the
credit facility contemplated herein and to induce the Revolving Credit Lenders
to provide Revolving Credit Loans and the Issuer to issue L/Cs under the
Revolving Credit (each of which Revolving Credit Loans shall be deemed to have
been made, and L/Cs to have been issued, in reliance thereupon) the Borrowers,
in addition to all other representations, warranties, and covenants made by any
Borrower in any other Loan Document, make those representations, warranties, and
covenants included in this Agreement.
4-1. PAYMENT AND PERFORMANCE OF LIABILITIES. The Borrowers shall
pay each payment Liability when due (or when demanded, if payable on demand) and
shall promptly, punctually, and faithfully perform each other Liability.
4-2. DUE ORGANIZATION. AUTHORIZATION. No CONFLICTS.
(a) Each Borrower presently is and hereafter shall remain
in good standing as a corporation under the laws of the State in which it is
organized, as set forth in the Preamble to this Agreement and is and shall
hereafter remain duly qualified and in good standing in every other State in
which, by reason of the nature or location of each Borrower's assets or
operation of each Borrower's business, such qualification may be necessary,
except where the failure to so qualify would not have a material adverse effect
on the business or assets of the Borrowers taken as a whole.
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(b) As of the Closing Date, each Borrower's respective
organizational identification number assigned to it by the State of its
incorporation and its respective federal employer identification number is
stated on EXHIBIT 4-2, annexed hereto.
(c) No Borrower shall change its State of organization;
any organizational identification number assigned to that Borrower by that
State; or that Borrower's federal taxpayer identification number.
(d) Each Affiliate, as of the Closing Date, is listed on
EXHIBIT 4-2. The Lead Borrower shall provide the Administrative Agent with prior
written notice of any entity's becoming or ceasing to be an Affiliate.
(e) Each Borrower has all requisite corporate power and
authority to execute and deliver all Loan Documents to which that Borrower is a
party and has and will hereafter retain all requisite corporate power to perform
all Liabilities.
(f) The execution and delivery by each Borrower of each
Loan Document to which it is a party; each Borrower's consummation of the
transactions contemplated by such Loan Documents (including, without limitation,
the creation of Collateral Interests by that Borrower to secure the
Liabilities); each Borrower's performance under those of the Loan Documents to
which it is a party; the borrowings hereunder; and the use of the proceeds
thereof:
(i) Have been duly authorized by all necessary
corporate action.
(ii) Do not, and will not, contravene in any
material respect any provision of any Requirement of Law or obligation
of that Borrower.
(iii) Will not result in the creation or
imposition of, or the obligation to create or impose, any Encumbrance
upon any assets of that Borrower pursuant to any Requirement of Law or
obligation, except pursuant to the Loan Documents.
(g) The Loan Documents have been duly executed and
delivered by each Borrower and are the legal, valid and binding obligations of
each Borrower, enforceable against each Borrower in accordance with their
respective terms, except as enforceability is limited by bankruptcy, insolvency,
or other laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that the availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
4-3. TRADE NAMES.
(a) EXHIBIT 4-3, annexed hereto, is a listing, as of the
Closing Date, of:
(i) All names under which any Borrower ever
conducted its business during the preceding five (5) years.
(ii) All Persons with whom any Borrower ever
consolidated or merged, or from whom any Borrower ever acquired in a
single transaction or in a series of related transactions substantially
all of such Person's assets, in each case within the preceding five (5)
years.
(b) The Lead Borrower will provide the Administrative
Agent with not less than twenty-one (21) days prior written notice (with
reasonable particularity) of any change to any Borrower's name from that under
which that Borrower is conducting its business at the execution of this
41
Agreement and will not effect such change unless each Borrower is then in
compliance with all provisions of this Agreement.
4-4. INTELLECTUAL PROPERTY.
(a) Each Borrower owns and possesses, or has the right to
use (and will hereafter own, possess, or have such right to use) all patents,
industrial designs, trademarks, trade names, trade styles, brand names, service
marks, logos, copyrights, trade secrets, know-how, confidential information, and
other intellectual or proprietary property of any third Person reasonably
necessary for that Borrower's conduct of that Borrower's business.
(b) The conduct by each Borrower of that Borrower's
business does not presently infringe (nor will any Borrower conduct its business
in the future so as to infringe) the patents, industrial designs, trademarks,
trade names, trade styles, brand names, service marks, logos, copyrights, trade
secrets, know-how, confidential information, or other intellectual or
proprietary property of any third Person in any manner that would have a
material adverse effect on the business or assets of the Borrowers taken as a
whole.
4-5. LOCATIONS.
(a) The Collateral, and the books, records, and papers of
Borrowers' pertaining thereto, are kept and maintained solely at the following
locations:
(i) The Lead Borrower's chief executive offices
which, as of the Closing Date, are at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
(ii) Those locations which are listed on EXHIBIT
4-5, annexed hereto, which EXHIBIT includes, as of the Closing Date,
with respect to each such location, the name and address of the
landlord on the Lease which covers such location (or an indication that
a Borrower owns the subject location) and of all service bureaus with
which any such records are maintained and the names and addresses of
each of the Borrowers' landlords.
(b) No Borrower shall remove any of the Collateral from
said chief executive office or those locations listed on EXHIBIT 4-5 or any
location opened in accordance with Section 4-5(c) hereof except for the
following purposes:
(i) To accomplish sales of Inventory in the
ordinary course of business.
(ii) To move Inventory from one such location to
another such location.
(iii) To utilize such of the Collateral as is
removed from such locations in the ordinary course of business.
(iv) To dispose of Inventory that is not Eligible
Inventory.
(v) To open or close stores or to move the chief
executive office.
(c) The Borrowers will not open any new locations at
which any Borrower maintains, offers for sale or stores any of the Collateral
unless, to the extent required by the Administrative Agent, the Administrative
Agent shall have received and filed additional UCC financing statements with
respect to Collateral at such new location. The Lead Borrower will promptly
notify the Administrative Agent in writing of any new location at which any
Borrower maintains, offers for sale, or stores any of the Collateral. The
Borrowers will not enter into any leases for any new locations at any
42
time that (i) the Liabilities have been or are deemed to have been accelerated
or (ii) the Administrative Agent has notified the Borrowers in writing that an
Event of Default exists and that such new leases are not permitted hereunder.
(d) Except as otherwise disclosed pursuant to this
Section 4-5 or as hereafter disclosed to the Administrative Agent, no Inventory
of the Borrowers with an aggregate Cost greater than $5,000,000.00 is in the
care or custody of any third party or stored or entrusted with a bailee or other
third party and Inventory with an aggregate Cost greater than $5,000,000.00
shall not hereafter be placed under such care, custody, storage, or entrustment
unless a landlord's or bailee's agreement reasonably acceptable to the
Administrative Agent has been provided to the Administrative Agent in respect
thereof.
4-6. TITLE TO ASSETS.
(a) The Borrowers are, and shall hereafter remain, the
owners of all Collateral, in each case free and clear of all Encumbrances with
the exceptions of the following:
(i) Encumbrances in favor of the Administrative
Agent.
(ii) Those Encumbrances (if any) listed on
EXHIBIT 4-6, annexed hereto and any renewals or refinancings thereof
that does not increase the amount of Indebtedness secured thereby.
(iii) Permitted Encumbrances.
(iv) Encumbrances granted to secure Indebtedness
permitted pursuant to Section 4-7(c) hereof, provided that such
Encumbrance shall attach only to the asset so acquired by the Borrowers
with the proceeds of such Indebtedness and shall not extend to any
other assets of the Borrowers.
(v) Encumbrances granted to secure Indebtedness
permitted pursuant to Sections 4-7(d) and 4-7(e) hereof, provided that
such Encumbrance shall attach only to the real estate so financed by
the Borrowers with the proceeds of such Indebtedness and shall not
extend to any other assets of the Borrowers, and further provided that
if there is located on such real estate any Inventory of the Borrowers
or any books and records relating to the Collateral, the mortgagee
obtaining such Encumbrance shall have furnished the Administrative
Agent with an agreement permitting the Administrative Agent with
reasonable access to the real estate on which the mortgagee holds such
Encumbrance for the purpose of repossessing and/or disposing of any
Collateral located therein and waiving any rights in and to all
Collateral, on terms reasonably acceptable to the Administrative Agent.
(vi) Judgment liens with respect to judgments
that do not constitute an Event of Default under Section 10-8 hereof.
(vii) Encumbrances securing the Indebtedness of
any Borrower to any other Borrower.
(viii) Intentionally Omitted.
(ix) Encumbrances upon any property or assets
(other than inventory and accounts) of any Person existing immediately
prior to the time of any Permitted Acquisition of such Person or such
Person's property or assets by a Borrower, provided that such
43
Encumbrances were not granted in contemplation of, or in connection
with, such Permitted Acquisition.
(b) No Borrower has, and none shall have, possession of
any property on consignment to that Borrower unless (i) the Lead Borrower has
furnished the Administrative Agent with ten (10) days prior written notice of
its intent to acquire such property on consignment, and (ii) if the
Administrative Agent so requests, an intercreditor agreement with the consignor
on terms reasonably acceptable to the Administrative Agent has been delivered to
the Administrative Agent, and (iii) the aggregate amount of property consigned
to the Borrowers shall not exceed thirty percent of the Cost of the Borrowers'
Inventory at any time.
4-7. INDEBTEDNESS. The Borrowers do not and shall not hereafter
have any Indebtedness with the exceptions of:
(a) Any Indebtedness on account of the Revolving Credit.
(b) The Indebtedness (if any) listed on EXHIBIT 4-7,
annexed hereto and any renewals or refinancings thereof that does not
increase the principal amount thereof.
(c) Subject to the proviso to this Section 4-7,
Indebtedness incurred after the date hereof to finance the acquisition
of assets (other than those described in Sections 4-7(d) or (e) hereof)
which do not constitute Collateral hereunder in an amount not to exceed
$75,000,000.00 in the aggregate outstanding at any time.
(d) Subject to the proviso to this Section 4-7,
Indebtedness incurred in connection with mortgage financing of real
estate owned by any of the Borrowers in an amount not to exceed, in the
aggregate outstanding at any time, $300,000,000.00 less any outstanding
Indebtedness of the type described in clause 4-7(e) below.
(e) Subject to the proviso to this Section 4-7,
Indebtedness incurred in connection with construction, mortgage, and
equipment financing of new PowerMax facilities by a Borrower in an
amount not to exceed $200,000,000.00 in the aggregate outstanding at
any time.
(f) Indebtedness due to any of Borrower by any other
Borrower.
(g) Subject to the proviso to this Section 4-7,
Guaranties of Indebtedness of Subsidiaries, Related Entities and
Affiliates of the Lead Borrower in an amount not to exceed
$50,000,000.00 in the aggregate outstanding at any time.
(h) Intentionally Omitted.
(i) Subject to the proviso to this Section 4-7,
Indebtedness, not to exceed $300,000,000.00 in the aggregate at any
time outstanding, subordinated to the payment of the Obligations on
terms which are reasonably acceptable to the Administrative Agent.
(j) Indebtedness on account of Hedge Agreements on terms
and in such amounts as may be reasonably acceptable to the
Administrative Agent.
(k) Subject to the proviso to this Section 4-7, other
unsecured Indebtedness not to exceed $50,000,000.00 in the aggregate
outstanding at any time.
44
provided, however, that in no event shall the Indebtedness incurred pursuant to
clauses (c), (d), (e),(g), (i), and (k) exceed $600,000,000.00 in the aggregate
outstanding at any time.
4-8. INSURANCE.
(a) EXHIBIT 4-8, annexed hereto, is a schedule of all
insurance policies owned by the Borrowers or under which any Borrower is the
named insured as of the Closing Date. Each of such material policies is in full
force and effect. Neither the issuer of any such policy nor any Borrower is in
default or violation of any such policy in any material respect.
(b) The Borrowers shall have and maintain at all times
insurance covering such risks, in such amounts, containing such terms, in such
form, for such periods, and written by such companies as is customarily
maintained by prudent companies in the Borrowers' industry (including such
levels of self-insurance as are deemed prudent by the Lead Borrower). The
Borrowers shall also have and maintain at all times insurance covering the
Collateral, in such amounts, containing such terms, in such form, for such
periods, and written by such companies as may be reasonably satisfactory to the
Administrative Agent.
(c) All insurance carried by the Borrowers shall provide
for a minimum of sixty (60) days' written notice of cancellation to the
Administrative Agent and all such insurance which covers the Collateral shall
include an endorsement in favor of the Administrative Agent, which endorsement
shall provide that the insurance, to the extent of the Administrative Agent's
interest therein, shall not be impaired or invalidated, in whole or in part, by
reason of any act or neglect of any Borrower or by the failure of any Borrower
to comply with any warranty or condition of the policy.
(d) The coverage reflected on EXHIBIT 4-8 presently
satisfies the foregoing requirements, it being recognized by each Borrower,
however, that such requirements may change hereafter to reflect changing
circumstances.
(e) The Lead Borrower shall furnish the Administrative
Agent from time to time with certificates or other evidence satisfactory to the
Administrative Agent regarding compliance by the Borrowers with the foregoing
requirements.
(f) In the event of the failure by the Borrowers to
maintain insurance as required herein, the Administrative Agent, at its option,
may obtain such insurance, provided, however, the Administrative Agent's
obtaining of such insurance shall not constitute a cure or waiver of any Event
of Default occasioned by the Borrowers' failure to have maintained such
insurance.
4-9. LICENSES. Each material license, distributorship,
franchise, and similar agreement issued to, or to which any Borrower is a party
is in full force and effect, except where the failure to be in full force and
effect would not have a material adverse effect on the business or assets of the
Borrowers taken as a whole. No party to any such license or agreement is in
default or violation thereof, where such default or violation would have a
material adverse effect on the business or assets of the Borrowers taken as a
whole. As of the Closing Date, no Borrower has received any notice or threat of
cancellation of any such license or agreement. The Lead Borrower shall promptly
furnish the Administrative Agent with copies of any notice or threat of
cancellation of any such license or agreement which would have a material
adverse effect on the business or assets of the Borrowers taken as a whole.
4-10. LEASES. EXHIBIT 4-10, annexed hereto, is a schedule
of all effective Capital Leases as of the Closing Date. (EXHIBIT 4-5 includes a
list of all other effective Leases as of the Closing Date). Each of such Leases
and Capital Leases is in full force and effect, except where the failure to be
in full force and effect would not have a material adverse effect on the
business or assets of
45
the Borrowers taken as a whole. No party to any such Lease or Capital Lease is
in default or violation of any such Lease or Capital Lease where such default or
violation would have a material adverse effect on the business or assets of the
Borrowers taken as a whole. As of the Closing Date, no Borrower has received any
notice or threat of cancellation of any such Lease or Capital Lease, except for
cancellations which would not have a material adverse effect on the business or
assets of the Borrowers taken as a whole. Each Borrower hereby authorizes the
Administrative Agent at any time and from time to time during the existence of
an Event of Default to contact any of the Borrowers' respective landlords in
order to confirm the Borrowers' continued compliance with the terms and
conditions of the Lease(s) between the subject Borrower and that landlord and to
discuss such issues, concerning the subject Borrower's occupancy under such
Lease(s), as the Administrative Agent may determine.
4-11. REQUIREMENTS OF LAW. Each Borrower is in compliance
with, and shall hereafter comply with and use its assets in compliance with, all
Requirements of Law except where the failure of such compliance will not have a
material adverse effect on the Borrowers' business or assets taken as a whole.
No Borrower has received any notice of any violation of any Requirement of Law
(other than of a violation which would not have a material adverse effect on the
Borrowers' business or assets taken as a whole), which violation has not been
cured or otherwise remedied.
4-12. LABOR RELATIONS.
(a) As of the Closing Date, no Borrower is a party to any
collective bargaining or other labor contract.
(b) There is not presently pending and, to any Borrower's
knowledge, there is not threatened any of the following which would have a
material adverse effect on the business or assets of the Borrowers taken as a
whole:
(i) Any strike, slowdown, picketing, work
stoppage, or employee grievance process.
(ii) Any proceeding against or affecting any
Borrower relating to the alleged violation of any Applicable Law
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 any Borrower, which would
reasonably be expected to have a material adverse effect on the
Borrowers' business or assets taken as a whole.
(iii) Any lockout of any employees by any Borrower
(and no such action is contemplated by any Borrower).
(iv) Any application for the certification of a
collective bargaining agent.
(c) No event has occurred or circumstance exists which
would provide the basis for any work stoppage or other labor dispute that would
have a material adverse effect on the business or assets of the Borrowers taken
as a whole.
(d) Except as set forth on EXHIBIT 4-12, each Borrower:
(i) Has complied with all Applicable Law
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
46
plant closing, except where the failure to so comply would not have a
material adverse effect on the business or assets of the Borrowers
taken as a whole.
(ii) Is not liable for the payment of more than
any amount of compensation, damages, taxes, fines, penalties, or other
amounts, however designated, for that Borrower's failure to comply with
any Applicable Law referenced in Section 4-12(d)(i), which would have a
material adverse effect on the Borrowers' business or assets taken as a
whole.
(e) The Lead Borrower shall furnish prompt notice to the
Administrative Agent of the occurrence of any event described in subparagraphs
4-12(a) through and including 4-12(d) which would have been disclosed to the
Administrative Agent had such occurrence existed as of the Closing Date.
4-13. MAINTAIN PROPERTIES. The Borrowers shall:
(a) Keep the Collateral in good order and repair
(ordinary wear and tear and insured casualty excepted).
(b) Not suffer or cause the waste or destruction of any
material part of the Collateral.
(c) Not use any of the Collateral in violation in any
material respect of any policy of insurance thereon.
(d) Not sell, lease, or otherwise dispose of any of the
Collateral, other than the following:
(i) The sale of Inventory in compliance with
this Agreement.
(ii) The turning over to the Administrative Agent
of all Receipts during the existence of a Cash Control Event
as provided herein.
4-14. TAXES.
(a) With respect to the Borrowers' federal, state, and
local tax liability and obligations:
(i) The Lead Borrower, in material compliance
with all Applicable Law, has properly filed all returns due to be filed
up to the date of this Agreement.
(ii) As of the Closing Date, except as described
on EXHIBIT 4-14:
(A) At no time has any Borrower
received from any taxing authority any request to perform any
examination of or with respect to any Borrower nor any other
written or verbal notice in any way relating to any claimed
failure by any Borrower to comply with all Applicable Law
concerning payment of any taxes or other amounts in the nature
of taxes.
(B) No agreement exists which waives or
extends any statute of limitations applicable to the right of
any taxing authority to assert a deficiency or make any other
claim for or in respect to federal income taxes.
47
(C) No issue has been raised in any tax
examination of any Borrower which, by application of similar
principles, reasonably would be expected to result in the
assertion of a deficiency for any fiscal year open for
examination, assessment, or claim by any taxing authority.
(b) The Borrowers have, and hereafter shall: pay, as they
become due and payable, all taxes and unemployment contributions and other
charges of any kind or nature levied, assessed or claimed against any Borrower
or the Collateral by any person or entity whose claim could result in an
Encumbrance upon any asset of any Borrower or by any governmental authority
(provided that the Borrowers shall not be required to pay any such taxes or
claims as long as such tax or claim is being disputed by the Borrowers in good
faith, the Borrowers have established adequate reserves therefor in accordance
with GAAP, and no notice of tax lien has been filed with respect thereto);
properly exercise any trust responsibilities imposed upon any Borrower by reason
of withholding from employees' pay or by reason of any Borrower's receipt of
sales tax or other funds for the account of any third party; timely make all
contributions and other payments as may be required pursuant to any Employee
Benefit Plan now or hereafter established by any Borrower; and timely file all
tax and other returns and other reports with each governmental authority to whom
any Borrower is obligated to so file.
(c) During the existence of any Event of Default, at its
option, the Administrative Agent may, but shall not be obligated to, pay any
such taxes, unemployment contributions, and any and all other charges levied or
assessed upon any Borrower or the Collateral by any Person or governmental
authority, and make any contributions or other payments on account of the
Borrowers' Employee Benefit Plan as the Administrative Agent, in the
Administrative Agent's discretion, may deem necessary or desirable, to protect,
maintain, preserve, collect, or realize upon any or all of the Collateral or the
value thereof or any right or remedy pertaining thereto, provided, however, the
Administrative Agent's making of any such payment shall not constitute a cure or
waiver of any Event of Default occasioned by the Borrowers' failure to have made
such payment.
4-15. NO MARGIN STOCK. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of any
borrowing hereunder will be used at any time to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
4-16. ERISA.
(a) Neither any Borrower nor any ERISA Affiliate has ever
taken any of the following actions that would have a material adverse effect on
the business or assets of the Borrowers taken as a whole:
(i) Violated or failed to be in compliance with
any Borrower's Employee Benefit Plan.
(ii) Failed timely to file all reports and
filings required by ERISA to be filed by any Borrower.
(iii) Engaged in any nonexempt "prohibited
transactions" or "reportable events" (respectively as described in
ERISA).
(iv) Engaged in, or committed, any act such that
a tax or penalty reasonably could be imposed upon any Borrower on
account thereof pursuant to ERISA.
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(v) Accumulated any material cumulative funding
deficiency within the meaning of ERISA.
(vi) Terminated any Employee Benefit Plan such
that a lien could be asserted against any assets of any Borrower on
account thereof pursuant to ERISA.
(vii) Have any obligation under any Employee
Benefit Plan which is a multiemployer plan within the meaning of
Section 4001 (a) of ERISA for withdrawal liability.
(b) Neither any Borrower nor any ERISA Affiliate shall
ever engage in any action of the type described in Section 4-16(a) to the extent
that any of the foregoing would have a material adverse effect on the Borrowers
taken as a whole.
4-17. HAZARDOUS MATERIALS.
(a) No Borrower has ever: (i) been legally responsible
for any release or threat of release of any Hazardous Material or (ii) received
notification of the incurrence of any expense in connection with the assessment,
containment, or removal of any Hazardous Material for which that Borrower would
be responsible, except where such release or threat of release or incurrence of
such expense would not have a material adverse effect on the Borrowers' business
or assets.
(b) Each Borrower shall: (i) dispose of any Hazardous
Material only in compliance with all Environmental Laws and (ii) have possession
of any Hazardous Material only in the ordinary course of that Borrower's
business and in compliance with all Environmental Laws, except, in each case,
where the failure to do so would not have a material adverse effect on the
business or assets of the Borrowers taken as a whole.
4-18. LITIGATION. As of the Closing Date, except as described
in EXHIBIT 4-18, annexed hereto, there is not presently pending or threatened by
or against any Borrower any suit, action, proceeding, or investigation which, if
determined adversely to any Borrower, would have a material adverse effect upon
a Borrower's financial condition or ability to conduct its business as such
business is presently conducted or is contemplated to be conducted in the
foreseeable future.
4-19. DIVIDENDS. INVESTMENTS. CORPORATE ACTION. No Borrower shall:
(a) Pay any cash dividend in respect of any class of that
Borrower's capital stock or make any other distribution in respect of
any class of that Borrower's capital stock, except that (i) the
Subsidiaries of the Lead Borrower may pay such dividends or make such
distributions to the Lead Borrower without any limitation, and (ii) as
long as no Default exists or would arise therefrom, the Lead Borrower
may pay cash dividends to its stockholders so long as for each of the
thirty (30) days prior to, and after giving effect to, the payment of
such dividends Availability is at least $200,000,000.00 and
Availability is projected on a pro forma basis to be at least
$200,000,000.00 for 180 day period immediately following the payment of
such dividends.
(b) Redeem, retire, purchase, or acquire any of the Lead
Borrower's capital stock, provided that, as long as no Default exists
or would arise therefrom, the Lead Borrower may redeem, purchase,
retire or acquire any of its capital stock so long as for each of the
thirty (30) days prior to, and after giving effect to, such repurchase
Availability is at least $200,000,000.00 and Availability is projected
on a pro forma basis to be at least $200,000,000.00 for 180 day period
immediately following such redemption, purchase, retirement or
acquisition.
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(c) Invest in or purchase any stock or securities or
rights to purchase any such stock or securities, of any Person, except
for (i) investments described in EXHIBIT 4-19, (ii) investments and
purchase of equity in a Subsidiary of a Borrower or an investment or
purchase that would make an Affiliate or a Related Entity a Subsidiary
as long as no Default then exists or would arise therefrom, (iii)
Permitted Investments, (iv) investments representing stock or
obligations issued to a Borrower in settlement of claims against any
other Person by reason of a composition or adjustment of debt or a
reorganization of any debtor of a Borrower, and (v) Permitted
Acquisitions, as long as no Default exists or would arise therefrom.
(d) Merge or consolidate or be merged or consolidated
with or into any other Person, except that (i) any Subsidiary of a
Borrower may merge with or into the Lead Borrower or any other wholly
owned Subsidiary of the Lead Borrower, and (ii) Permitted Acquisitions,
as long as no Default exists or would arise therefrom.
(e) Consolidate any of that Borrower's operations with
those of any other Person, except that any Subsidiary of a Borrower may
consolidate its operations with or into the Lead Borrower or any other
wholly owned Subsidiary of the Lead Borrower.
(f) Organize or create any Affiliate or Related Entity to
the extent that the Borrowers' investment in all such Affiliates and
Related Entities after the Closing Date (whether as equity,
intercompany loan or otherwise and whether such Affiliate or Related
Entity is organized or created after the Closing Date) exceeds
$40,000,000.00 in the aggregate, provided that no such investment shall
be made during the existence of a Cash Control Event.
(g) Subordinate any debts or obligations owed to that
Borrower by any third party to any other debts owed by such third party
to any other Person.
(h) Acquire any assets other than in the ordinary course
and conduct of that Borrower's business as conducted at the execution
of this Agreement (except for Permitted Acquisitions), as long as no
Default exists or would arise therefrom.
4-20. LOANS. No Borrower shall make any loans or advances
to, nor acquire the Indebtedness of, any Person, provided, however, the
foregoing does not prohibit any of the following:
(a) Advance payments made to that Borrower's suppliers in
the ordinary course.
(b) Advances to that Borrower's officers, employees, and
salespersons with respect to reasonable expenses to be incurred by such
officers, employees, and salespersons for the benefit of that Borrower,
which expenses are properly substantiated by the person seeking such
advance and properly reimbursable by that Borrower.
(c) Intercompany loans amongst the Borrowers.
(d) Loans to Affiliates and Related Entities of the
Borrowers provided that the Borrowers' investment in all such
Affiliates and Related Entities after the Closing Date (whether as
equity, intercompany loans or otherwise and whether such Affiliate or
Related Entity is organized or created after the Closing Date) shall
not exceed $100,000,000.00 in the aggregate provided that no such loans
shall be made during the existence of a Cash Control Event.
(e) Loans to employees, officers and salespersons of the
Borrowers consistent with past practices provided that (i) any loans to
any individual shall not exceed $250,000.00 in the aggregate
outstanding at any time, and (ii) all such loans to employees, officers
and
50
salespersons of the Borrowers shall not exceed $3,000,000.00 in the
aggregate outstanding at anytime.
4-21. PROTECTION OF ASSETS. The Administrative Agent, in the
Administrative Agent's reasonable discretion, and from time to time during the
existence of an Event of Default, may discharge any tax or Encumbrance on any of
the Collateral, or take any other action which the Administrative Agent may deem
necessary or desirable to repair, insure, maintain, preserve, collect, or
realize upon any of the Collateral. The Administrative Agent shall not have any
obligation to undertake any of the foregoing and shall have no liability on
account of any action so undertaken except where there is a specific finding in
a judicial proceeding (in which the Administrative Agent has had an opportunity
to be heard), from which finding no further appeal is available, that the
Administrative Agent had acted in actual bad faith or in a grossly negligent
manner. The Borrowers shall pay to the Administrative Agent, on demand, or the
Administrative Agent, in its discretion, may add to the Loan Account, all
amounts paid or incurred by the Administrative Agent pursuant to this Section
4-21.
4-22. LINE OF BUSINESS. No Borrower shall engage in any business
other than the business in which it is currently engaged or a business
reasonably related thereto. Notwithstanding anything to the contrary herein
contained, the Borrowers may offer any product or service reasonably anticipated
to serve the needs and desires of the Borrowers' customers, including, without
limitation, small and medium sized businesses, home office customers and
individual business customers. Similarly, the Borrowers may offer any product or
service offered to the Borrowers' customers by the Borrowers' competitors.
4-23. AFFILIATE TRANSACTIONS. Except as described on EXHIBIT 4-23
or as otherwise permitted under this Agreement, no Borrower shall make any
payment, nor give any value to any Affiliate that is not a Borrower except for
goods and services actually purchased by that Borrower from, or sold by that
Borrower to, such Affiliate for a price and on terms which shall be no less
favorable to that Borrower than those which would have been charged and imposed
in an arms length transaction.
4-24. FURTHER ASSURANCES.
(a) Each Borrower shall execute and deliver to the
Administrative Agent such instruments, documents, and papers, and shall do all
such things from time to time hereafter as the Administrative Agent may
reasonably request to carry into effect the provisions and intent of this
Agreement; to protect and perfect the Administrative Agent's Collateral
Interests in the Collateral; and to comply in all material respects with all
applicable statutes and laws, and facilitate the collection of the Receivables
Collateral. Each Borrower shall execute all such instruments as may be
reasonably required by the Administrative Agent with respect to the recordation
and/or perfection of the Collateral Interests created or contemplated herein.
(b) Each Borrower hereby designates the Administrative
Agent as and for that Borrower's true and lawful attorney, with full power of
substitution, to sign and file any financing statements in order to perfect or
protect the Administrative Agent's Collateral Interests in the Collateral during
the existence of an Event of Default.
(c) A carbon, photographic, or other reproduction of this
Agreement or of any financing statement or other instrument executed pursuant to
this Section 4-24 shall be sufficient for filing to perfect the security
interests granted herein.
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4-25. ADEQUACY OF DISCLOSURE.
(a) All financial statements furnished to the
Administrative Agent and to each Revolving Credit Lender by each Borrower have
been prepared in accordance with GAAP consistently applied and present fairly in
all material respects the condition of the Borrowers at the date(s) thereof and
the results of operations and cash flows for the period(s) covered (provided
however, that unaudited financial statements are subject to normal year end
adjustments and to the absence of footnotes). There has been no change in the
Consolidated financial condition, results of operations, or cash flows of the
Borrowers since the date(s) of such financial statements, other than changes in
the ordinary course of business, and changes which have not been materially
adverse, either singularly or in the aggregate.
(b) As of the Closing Date, no Borrower has any
contingent obligations or obligation under any Lease, excluding synthetic leases
not reported under GAAP, or Capital Lease which is not noted in the Borrowers'
Consolidated financial statements furnished to the Administrative Agent and to
each Revolving Credit Lender prior to the execution of this Agreement.
(c) No document, instrument, agreement, or paper now or
hereafter given to the Administrative Agent or to any Revolving Credit Lender by
or on behalf of each Borrower in connection with the execution of this Agreement
by the Administrative Agent and each Revolving Credit Lender (other than
projections and forecasts, which are and will be made in good faith using
reasonable assumptions) contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements therein not misleading. There is no fact known to any
Borrower which has, or which, in the foreseeable future would likely have, a
material adverse effect on the financial condition of any Borrower which has not
been disclosed in writing to the Administrative Agent and to each Revolving
Credit Lender.
4-26. No RESTRICTIONS ON LIABILITIES. Except as disclosed in
EXHIBIT 4-7, no Borrower shall enter into or directly or indirectly become
subject to any agreement which prohibits or restricts, in any manner, any
Borrower's:
(a) Creation of, and granting of Collateral Interests in favor of
the Administrative Agent.
(b) Incurrence of Liabilities.
4-27. OTHER COVENANTS. No Borrower shall indirectly do or cause to
be done any act which, if done directly by that Borrower, would breach any
covenant contained in this Agreement.
ARTICLE 5 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:
5-1. MAINTAIN RECORDS. The Borrowers shall:
(a) At all times, keep proper books of account, in which
full, true, and accurate entries shall be made in all material respects
of all of the Borrowers' financial transactions, all in accordance with
GAAP applied consistently with prior periods to fairly reflect the
Consolidated financial condition of the Borrowers at the close of, and
its results of operations for, the periods in question.
(b) Timely provide the Administrative Agent with those
financial reports, statements, and schedules required by this Article 5
or otherwise, each of which reports, statements and schedules shall be
prepared, to the extent applicable, in accordance with GAAP applied
consistently with prior periods to fairly reflect in all material
respects the Consolidated
52
financial condition of the Borrowers at the close of, and the results
of operations for, the period(s) covered therein.
(c) At all times, keep accurate current records of the
Collateral including, without limitation, accurate current stock, cost,
and sales records of its Inventory, accurately and sufficiently
itemizing and describing the kinds, types, and quantities of Inventory
and the cost and selling prices thereof.
(d) At all times, retain independent certified public
accountants who are reasonably satisfactory to the Administrative Agent
and instruct such accountants to fully cooperate with, and be available
to, the Administrative Agent to discuss the Borrowers' financial
performance, financial condition, operating results, controls, and such
other matters, within the scope of the retention of such accountants,
as may be raised by the Administrative Agent.
(e) Not change any Borrower's fiscal year without
furnishing the Administrative Agent with at least ninety (90) days
prior written notice thereof.
5-2. ACCESS TO RECORDS.
(a) Each Borrower shall accord the Administrative Agent
with access from time to time during normal business hours and, as long as no
Event of Default exists, upon reasonable prior notice, as the Administrative
Agent may reasonably require to all properties owned by or over which any
Borrower has control. Subject to the provisions of Section 5-9(d) hereof, the
Administrative Agent shall have the right (as long as no Event of Default
exists, upon reasonable prior notice), and each Borrower will permit the
Administrative Agent from time to time as Administrative Agent may reasonably
request, to examine, inspect, copy, and make extracts from any and all of the
Borrowers' books, records, electronically stored data, papers, and files and in
connection therewith, each Borrower shall make all of that Borrower's copying
facilities available to the Administrative Agent.
(b) Subject to the provisions of Section 5-2(a) hereof,
each Borrower hereby authorizes the Administrative Agent to:
(i) Inspect, copy, duplicate, review, cause to
be reduced to hard copy, run off, draw off, and otherwise use any and
all computer or electronically stored information or data which relates
to any Borrower, or any service bureau, contractor, accountant, or
other person, and directs any such service bureau, contractor,
accountant, or other person fully to cooperate with the Administrative
Agent with respect thereto.
(ii) During the existence of a Cash Control
Event, verify at any time the Collateral or any portion thereof,
including verification with Account Debtors, and/or with each
Borrower's computer billing companies, collection agencies, and
accountants and to sign the name of each Borrower on any notice to each
Borrower's Account Debtors or verification of the Collateral.
(c) The Administrative Agent from time to time may
designate one or more representatives to exercise the Administrative Agent's
rights under this Section 5-2 as fully as if the Administrative Agent were doing
so.
5-3. IMMEDIATE NOTICE TO ADMINISTRATIVE AGENT.
(a) The Lead Borrower shall provide the Administrative
Agent with written notice promptly upon the occurrence of any of the following
events, which written notice shall be with reasonable particularity as to the
facts and circumstances in respect of which such notice is being given:
53
(i) Any change in any Borrower's President,
chief executive officer, chief operating officer, and chief financial
officer (without regard to the title(s) actually given to the Persons
discharging the duties customarily discharged by officers with those
titles).
(ii) Any cessation of any Borrower's making of
payment, in the ordinary course, to any of its creditors (other than
its cessation of making of such payments on account of a dispute with
such creditor), which would have a material adverse effect on the
financial condition of the Borrowers taken as a whole.
(iii) Any failure by any Borrower to pay rent at
any of that Borrower's locations, which failure continues for more than
three (3) days following the last day on which such rent was payable
without a material adverse effect to the Borrowers taken as a whole,
unless such rent is being disputed by the Borrowers in good faith and
the Borrowers have established adequate reserves therefor in accordance
with GAAP.
(iv) Any event which the Lead Borrower determines
to have a material adverse effect in the business, operations, or
financial affairs of the Borrowers taken as a whole.
(v) The occurrence of any Default.
(vi) Any intention on the part of any Borrower to
discharge that Borrower's present independent accountants or any
withdrawal or resignation by such independent accountants from their
acting in such capacity (as to which, see Subsection 5-l(d)).
(vii) Any litigation which, if determined
adversely to any Borrower, would have a material adverse effect on the
financial condition of the Borrowers taken as a whole.
(b) The Lead Borrower shall:
(i) Provide the Administrative Agent, when so
distributed, with copies of any materials distributed to the
shareholders of the Lead Borrower (qua such shareholders).
(ii) Provide the Administrative Agent:
(A) When filed, copies of all filings
with the SEC.
(B) When received, copies of all
correspondence from the SEC, other than routine
non-substantive general communications from the SEC.
(iii) Add the Administrative Agent as an addressee
on all investor mailing lists maintained by each Borrower.
(iv) Provide the Administrative Agent, when
received by any Borrower, with a copy of any management letter or
similar communications from any accountant of any Borrower.
5-4. BORROWING BASE CERTIFICATE. The Lead Borrower shall provide
the Administrative Agent with a Borrowing Base Certificate (in the form of
EXHIBIT 5-4 annexed hereto, as such form may be revised from time to time by the
Administrative Agent) monthly on fifth Business Day after the last day of each
calendar month (as of the close of business on the last day of each fiscal
month), provided that if a Increased Reporting Event occurs, the Lead Borrower
shall furnish such Borrowing Base Certificate weekly on Wednesday of each week
(or if not a Business Day, the next succeeding Business Day) as of the close of
business on the immediately preceding Saturday (which
54
date for delivery of such reports shall thereafter not change until the
circumstances giving rise to the Increased Reporting Event are remedied as
provided in the definition of "Increased Reporting Event"). Such Certificate may
be sent to the Administrative Agent by facsimile transmission, provided that the
original thereof is forwarded to the Administrative Agent on the date of such
transmission.
5-5. MONTHLY REPORTS.
Monthly, the Lead Borrower shall provide the Administrative
Agent with original counterparts of the following (each in such form as the
Administrative Agent from time to time may specify):
(i) those reports described in EXHIBIT 5-5
hereto, at the times set forth in such EXHIBIT;
(ii) Within thirty (30) days following the end of
each fiscal month (except for any month which corresponds to the end of
a fiscal quarter of the Borrowers), an internally prepared financial
statement of the Borrowers' Consolidated financial condition and the
results of its operations for, the period ending with the end of the
subject month, which financial statement shall include, at a minimum, a
balance sheet, income statement, cash flow and comparison of same store
sales for the corresponding month of the then immediately previous
year, as well as to the Borrowers' business plan or most recent
forecast.
5-6. QUARTERLY REPORTS. Quarterly, within fifty (50) days following
the end of each of the Borrowers' fiscal quarters, the Lead Borrower shall
provide the Administrative Agent with the following:
(a) An original counterpart of a management prepared
financial statement of the Borrowers for the period from the beginning
of the Borrowers' then current fiscal year through the end of the
subject fiscal quarter, with comparative information for the same
period of the previous fiscal year, which statement shall include, at a
minimum, a balance sheet, income statement, statement of changes in
shareholders' equity, and cash flows and comparisons for the
corresponding fiscal quarter of the then immediately previous fiscal
year, as well as to the Borrowers' business plan or most recent
forecast.
(b) The officer's compliance certificate described in
Section 5-8.
(c) The Borrowers' 10Q report filed with the SEC.
5-7. ANNUAL REPORTS.
Annually, within ninety-five (95) days following the end of
the Borrowers' fiscal year, the Lead Borrower shall furnish the Administrative
Agent with the following:
(i) An original signed counterpart of the Borrowers'
Consolidated annual financial statement, which statement shall have
been prepared by, and bear the unqualified opinion of, the Lead
Borrower's independent certified public accountants reasonably
acceptable to the Administrative Agent (PricewaterhouseCoopers, LLC or
another nationally recognized accounting firm being acceptable) (i.e.
said statement shall be "certified" by such accountants) and shall
include, at a minimum (with comparative information for the then prior
fiscal year) a balance sheet, income statement, statement of changes in
shareholders' equity, cash flows, and schedules of consolidation.
(ii) The officer's compliance certificate
described in Section 5-8.
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(iii) The Borrowers' 10K report filed with the
SEC.
5-8. OFFICERS' CERTIFICATES. The Lead Borrower shall cause either
the Lead Borrower's President or its Chief Financial Officer, in each instance,
to provide such Person's Certificate with those monthly, quarterly, and annual
statements to be furnished pursuant to this Agreement, which Certificate shall:
(a) Indicate that the subject statement was prepared in
accordance with GAAP consistently applied and presents fairly in all
material respects the Consolidated financial condition of the Borrowers
at the close of, and the results of the Borrowers' operations and cash
flows for, the period(s) covered, subject, however to the following:
(i) Usual year end adjustments and the absence
of footnotes (this exception shall not be included in the
Certificate which accompanies such annual statement).
(ii) Material Accounting Changes (in which event,
such Certificate shall include a schedule (in reasonable
detail) of the effect of each such Material Accounting Change)
not previously specifically taken into account in the
determination of the financial performance covenant imposed
pursuant to Section 5-11.
(b) Indicate either that (i) no Default exists, or (ii)
if such an event has occurred, its nature (in reasonable detail) and
the steps (if any) being taken or contemplated by the Borrowers to be
taken on account thereof.
(c) Include calculations concerning the Borrowers'
compliance (or failure to comply) at the date of the subject statement
with the financial performance covenant included in Section 5-11 hereof
(whether or not a Covenant Compliance Event then exists).
5-9. INVENTORIES, APPRAISALS, AND AUDITS.
(a) The Administrative Agent, at the reasonable expense
of the Borrowers (but in no event to exceed $25,000.00 per annum), 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 any
Borrower.
(b) The Borrowers, at their own expense, shall cause not
less than one (1) physical inventory of each of their store locations and
delivery centers to be undertaken in each twelve (12) month period during which
this Agreement is in effect and shall cause cycle counts of their Power Max
locations to be undertaken in a manner consistent with their practices in effect
on the Closing Date (or such other procedures as may be reasonably satisfactory
to the Administrative Agent).
(i) The Lead Borrower shall provide the
Administrative Agent with a copy of the preliminary results of each
such physical inventory and cycle count within thirty (30) days
following the completion of such inventory.
(ii) The Lead Borrower, within forty-five (45)
days following the completion of such physical inventory or cycle
count, shall provide the Administrative Agent with a reconciliation of
the results of each such physical inventory or cycle count and shall
post such results to the Borrowers' perpetual inventory system and, as
applicable to the Borrowers' other financial books and records.
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(iii) The Administrative Agent, in its reasonable
discretion, if any Default exists, may cause such additional
inventories to be taken as the Administrative Agent reasonably
determines (each, at the expense of the Borrowers).
(c) The Administrative Agent may obtain appraisals of the
Collateral, from time to time (in all events, at the Borrowers' expense)
conducted by such appraisers as are reasonably satisfactory to the
Administrative Agent. The Administrative Agent shall not conduct more than one
(1) appraisal of the Collateral, at the Borrowers' expense (which expense will
not exceed $50,000.00 in any twelve month period plus all reasonable
out-of-pocket expenses), during any twelve (12) month period during which this
Agreement is in effect, unless an Event of Default shall exist, in which case
the Administrative Agent may undertake additional such appraisals (at the
Borrowers' expense) during such period as the Administrative Agent shall
reasonably require.
(d) The Administrative Agent contemplates conducting two
(2) commercial finance field examinations (in each event, at the Borrowers'
expense, which expense will not exceed $30,000.00 in any twelve month period,
plus all reasonable out-of-pocket expenses) of the Borrowers' books and records
during any twelve (12) month period during which this Agreement is in effect,
unless an Event of Default shall have occurred and be continuing, in which case
the Administrative Agent may undertake such additional audits (at the Borrowers'
expense) during such period as the Administrative Agent shall reasonably
require.
5-10. ADDITIONAL FINANCIAL INFORMATION.
(a) In addition to all other information required to be
provided pursuant to this Article 5, the Lead Borrower promptly shall provide
the Administrative Agent with such other and additional information concerning
the Borrowers, the Collateral, the operation of the Borrowers' business, and the
Borrowers' financial condition, including original counterparts of financial
reports and statements, as the Administrative Agent may from time to time
reasonably request from the Lead Borrower.
(b) The Lead Borrower may provide the Administrative
Agent, from time to time hereafter, with updated forecasts of the Borrowers'
anticipated performance and operating results.
(c) In all events, the Lead Borrower, no later than
thirty (30) days after the end of each of the Borrowers' fiscal years, shall
provide the Administrative Agent with an updated and extended forecast which
shall go out at least through the end of that fiscal year and shall include an
income statement, balance sheet, and statement of cash flow, by month, each
Consolidated (with consolidating schedules) and each prepared in conformity with
GAAP and consistent with the Borrowers' then current practices.
(d) Each Borrower recognizes that all inventories,
analysis, financial information, and other materials which the Administrative
Agent may obtain, develop, or receive with respect to the Borrowers are
confidential to the Administrative Agent and that, except as otherwise provided
herein, no Borrower is entitled to receipt of any of such inventories, analysis,
financial information, and other materials, nor copies or extracts thereof or
therefrom. Notwithstanding the foregoing, as long as no Event of Default exists,
the Administrative Agent shall furnish the Lead Borrower with a copy of each
appraisal obtained by the Administrative Agent.
5-11. FINANCIAL PERFORMANCE COVENANTS.
(a) If a Covenant Compliance Event exists, the Borrowers
shall cause its Fixed Charge Coverage Ratio to be at least 1:1 as of the end of
each of its fiscal months commencing with the fiscal month ending immediately
prior to the date of the Covenant Compliance Event. Compliance with
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such financial performance covenant shall thereafter be required as provided in
the definition of "Covenant Compliance Event".
(b) Compliance with such financial performance covenant
shall be made as if no Material Accounting Changes had been made (other than any
Material Accounting Changes specifically taken into account in the setting of
such covenants). The Administrative Agent may determine the Borrowers'
compliance with such covenants based upon financial reports and statements
provided by the Lead Borrower to the Administrative Agent as well as by
reference to interim financial information provided to the Administrative Agent.
ARTICLE 6 - USE OF COLLATERAL:
6-1. USE OF INVENTORY COLLATERAL.
(a) No Borrower shall engage
(i) In any sale of the Inventory other than for
fair consideration in the conduct of the Borrowers' business in the
ordinary course or as permitted under this Agreement.
(ii) Sales or other dispositions to creditors.
(iii) Sales or other dispositions in bulk other
than in connection with any store closings, provided that in no event
shall Inventory sold in bulk as a result of store closings after the
Closing Date exceed, in the aggregate, fifteen percent (15%) of the
Cost of the Borrowers' Inventory existing as of the Closing Date.
(iv) Sales of any Collateral in breach of any
provision of this Agreement.
(b) No sale of Inventory shall be on consignment,
approval, or under any other circumstances such that such Inventory may be
returned to a Borrower without the consent of the Administrative Agent (with the
exception of the Borrowers' customary return policy applicable to the return of
inventory purchased by the Borrowers' retail customers in the ordinary course).
6-2. INVENTORY QUALITY. All Inventory now owned or hereafter
acquired by each Borrower and at the time included in the Borrowing Base is and
will be of good and merchantable quality and free from defects (other than
defects within customary trade tolerances).
6-3. ADJUSTMENTS AND ALLOWANCES. Each Borrower may grant such
allowances or other adjustments to that Borrower's Account Debtors (exclusive of
extending the time for payment of any Account or Account Receivable, which shall
not be done without first obtaining the Administrative Agent's prior written
consent in each instance, which consent shall not be unreasonably delayed or
withheld) as that Borrower may reasonably deem to accord with sound business
practice, provided, however, the authority granted the Borrowers pursuant to
this Section 6-3 may be limited or terminated by the Administrative Agent at any
time during the existence of an Event of Default in the Administrative Agent's
reasonable discretion.
6-4. VALIDITY OF ACCOUNTS.
(a) The amount of each Account shown on the books,
records, and invoices of the Borrowers represented as owing by each Account
Debtor is and will be the correct amount actually owing by such Account Debtor
and shall have been fully earned by performance by the Borrowers.
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(b) No Borrower has any knowledge of any impairment of
the validity or collectibility of any of the Accounts included in the Borrowing
Base. The Lead Borrower shall notify the Administrative Agent of any such
impairment immediately after any Borrower becomes aware of any such impairment
(c) Except for Permitted Encumbrances, Standby L/Cs
permitted hereunder, and surety bonds in an aggregate amount not to exceed
$10,000,000, no Borrower shall post any bond to secure any Borrower's
performance under any agreement to which any Borrower is a party nor cause any
surety, guarantor, or other third party obligee to become liable to perform any
obligation of any Borrower (other than to the Administrative Agent) in the event
of any Borrower's failure so to perform.
6-5. NOTIFICATION TO ACCOUNT DEBTORS. The Administrative Agent
shall have the right, during the existence of a Cash Control Event or an Event
of Default, to notify any of the Borrowers' Account Debtors to make payment
directly to the Administrative Agent and to collect all amounts due on account
of the Collateral.
ARTICLE 7 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:
7-1. DEPOSITORY ACCOUNTS.
(a) Annexed hereto as EXHIBIT 7-1 is a Schedule of all
present DDA's as of the Closing Date, which Schedule includes, with respect to
each depository (i) the name and address of that depository; (ii) the account
number(s) of the account(s) maintained with such depository; and (iii) a contact
person at such depository.
(b) The Lead Borrower shall deliver the following to the
Administrative Agent, as a condition to the effectiveness of this Agreement:
(i) Notification, executed on behalf of each
Borrower, to each depository institution with which any DDA is
maintained (other than any Exempt DDA and the Blocked Account), in form
satisfactory to the Administrative Agent of the Administrative Agent's
interest in such DDA.
(ii) A Blocked Account Agreement with any
depository institution at which either of the following conditions
applies:
(A) Both any DDA (other than the
Operating Account) and the Operating Account is maintained.
(B) A Blocked Account is maintained.
(c) No Borrower will establish any DDA hereafter (other
than an Exempt DDA) unless, contemporaneous with such establishment, the Lead
Borrower delivers the following to the Administrative Agent:
(i) Notification to the depository at which such
DDA is established if the same would have been required pursuant to
Section 7-l(b)(ii)(A) if the subject DDA were open at the execution of
this Agreement.
(ii) A Blocked Account Agreement executed on
behalf of the depository at which such DDA is established if the same
would have been required pursuant to Section 7-l(b)(ii)(B) if the
subject DDA were open at the execution of this Agreement.
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7-2. CREDIT CARD RECEIPTS.
(a) Annexed hereto as EXHIBIT 7-2, is a Schedule which
describes all arrangements to which any Borrower is a party as of the Closing
Date with respect to the payment to that Borrower of the proceeds of credit card
charges for sales by that Borrower.
(b) The Lead Borrower shall deliver to the Administrative
Agent, as a condition to the effectiveness of this Agreement, notifications,
executed on behalf of each Borrower, to each of each Borrower's credit card
clearinghouses and processors of notice (in form satisfactory to the
Administrative Agent), which notice provides that payment of all credit card
charges submitted by that Borrower to that clearinghouse or other processor and
any other amount payable to that Borrower by such clearinghouse or other
processor shall, (i) whether or not a Cash Control Event has occurred and is
continuing, be directed to the Primary Blocked Account, and (ii) during the
existence of a Cash Control Event, be directed to the Primary Blocked Account,
or the Concentration Account or, during the existence of an Event of Default, as
otherwise designated from time to time by the Administrative Agent. No Borrower
shall change such direction or designation except upon and with the prior
written consent of the Administrative Agent.
7-3. THE CONCENTRATION, BLOCKED, AND OPERATING ACCOUNTS.
(a) The following checking accounts have been or will be
established (and are so referred to herein):
(i) The 'CONCENTRATION ACCOUNT" (so referred to
herein): Established by the Administrative Agent with Fleet National
Bank.
(ii) The 'BLOCKED ACCOUNTS" (so referred to
herein): Established by the Lead Borrower with those financial
institutions described on EXHIBIT 7-3.
(iii) The 'OPERATING ACCOUNT" (so referred to
herein): Established by the Lead Borrower with National City Bank
(Account No. ▇▇▇▇▇▇▇).
(iv) The PRIMARY BLOCKED ACCOUNT.
(b) The contents of each DDA and of the Blocked Accounts
constitutes Collateral and Proceeds of Collateral. The contents of the
Concentration Account constitutes the Administrative Agent's property and shall
be applied to the Liabilities in accordance with the provisions of Section 7-5
hereof.
(c) The Borrowers shall pay all fees and charges of, and
maintain such impressed balances as may be required by the depository in which
any account is opened as required hereby (even if such account is opened by
and/or is the property of the Administrative Agent).
7-4. PROCEEDS AND COLLECTIONS.
(a) All Receipts and all cash proceeds of any sale or
other disposition of Inventory and Accounts of each Borrower:
(i) Constitute Collateral and proceeds of
Collateral.
(ii) During the existence of a Cash Control
Event, shall be held in trust by the Borrowers for the Administrative
Agent.
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(iii) During the existence of a Cash Control
Event, shall not be commingled with any of any Borrower's other funds.
(iv) During the existence of a Cash Control
Event, shall be deposited and/or transferred only to the Blocked
Accounts or the Concentration Account.
(b) During the existence of a Cash Control Event, the
Lead Borrower shall cause the ACH or wire transfer to the Primary Blocked
Account or the Concentration Account, no less frequently than daily (and whether
or not there is then an outstanding balance in the Loan Account) of the
following:
(i) The then collected funds in each DDA (other
than any Exempt DDA), each such transfer to be net of any minimum
balance, not to exceed $10,000.00, as may be required to be maintained
in the subject DDA by the bank at which such DDA is maintained).
(ii) The proceeds of all credit card charges not
otherwise provided for pursuant hereto.
Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each Business Day on which any such transfer is made.
(c) Whether or not any Liabilities are then outstanding,
during the existence of a Cash Control Event, the Lead Borrower shall cause the
ACH or wire transfer to the Concentration Account, no less frequently than daily
on each Business Day, of all collected funds in each Blocked Account, net of
such minimum balance, not to exceed $10,000.00, as may be required to be
maintained in the Blocked Account by the depository which the Blocked Account is
maintained.
(d) In the event that, notwithstanding the provisions of
this Section 7-4, during the existence of a Cash Control Event, any Borrower
receives or otherwise has dominion and control of any Receipts, or any proceeds
or collections of any Collateral, such Receipts, proceeds, and collections shall
be held in trust by that Borrower for the Administrative Agent and shall not be
commingled with any of that Borrower's other funds or deposited in any account
of any Borrower other than as instructed by the Administrative Agent.
7-5. PAYMENT OF LIABILITIES.
(a) During the existence of a Cash Control Event (or as
the Lead Borrower may direct), on each Business Day, the Administrative Agent
shall apply the then collected balance of the Concentration Account (net of fees
charged, and of such impressed balances as may be required by the bank at which
the Concentration Account is maintained), as of the day immediately following
receipt of such collected funds, first, towards the SwingLine Loans and second,
towards the unpaid balance of the Loan Account and all other Liabilities,
subject to the provisions of Section 2-10(e).
(b) All deposits to the Concentration Account and other
payments to the Administrative Agent are subject to clearance and collection.
(c) The Administrative Agent shall transfer to the
Operating Account any surplus in the Concentration Account remaining after the
application towards the Liabilities referred to in Section 7-5(a), above (less
those amount which are to be netted out, as provided therein) provided, however,
in the event that
(i) any Default exists; and
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(ii) one or more L/Cs are then outstanding,
then the Administrative Agent may establish a funded reserve of up to 103% of
the aggregate Stated Amounts of such L/Cs. Such funded reserve shall either be
(i) returned to the Lead Borrower provided that no Default exists or (ii)
applied towards the Liabilities during the existence of any Event of Default
described in Section 10-10 or acceleration during the existence of any other
Event of Default.
ARTICLE 8 - GRANT OF SECURITY INTEREST:
8-1. GRANT OF SECURITY INTEREST. To secure the Borrowers' prompt,
punctual, and faithful performance of all and each of the Liabilities, each
Borrower hereby grants to the Administrative Agent, for the ratable benefit of
the Revolving Credit Lenders, a continuing security interest in and to, and
assigns to the Administrative Agent, for the ratable benefit of the Revolving
Credit Lenders, the following, and each item thereof, whether now owned or now
due, or in which that Borrower has an interest, or hereafter acquired, arising,
or to become due, or in which that Borrower obtains an interest, and all
Proceeds and substitutions of or to any of the following (all of which, together
with any other property in which the Administrative Agent may in the future be
granted a security interest, is referred to herein as the 'COLLATERAL"):
(a) All Accounts.
(b) All Inventory.
(c) All Letter-of-Credit Rights arising from or relating
to the Borrowers' Accounts and Inventory.
(d) All Payment Intangibles arising from, relating to, or
constituting proceeds of Accounts and Inventory.
(e) All Supporting Obligations arising from, relating to,
or constituting proceeds of Accounts and Inventory.
(f) All Instruments arising from, relating to, or
constituting proceeds of Account and Inventory.
(g) All Documents relating to the Borrowers' Inventory.
(h) All Deposit Accounts in which any monies deposited
therein arise from, relate to or constitute proceeds
of Accounts and Inventory.
(i) Money, cash, policies and certificates of insurance,
in each case, arising from, relating to, or
constituting proceeds of Accounts and Inventory.
(j) All insurance proceeds, refunds, and premium rebates,
including, without limitation, proceeds of fire and
credit insurance, arising out of any of the
foregoing. (8-1 (a) through 8-l(i)) or otherwise.
(k) All liens, guaranties, rights, remedies, and
privileges pertaining to any of the foregoing (8-l(a)
through 8-l(j)), including the right of stoppage in
transit.
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8-2. EXTENT AND DURATION OF SECURITY INTEREST.
(a) The security interest created and granted herein is
in addition to, and supplemental of, any security interest previously granted by
any Borrower to the Administrative Agent and shall continue in full force and
effect applicable to all Liabilities until both (a) all Liabilities have been
paid and/or satisfied in full and (b) the security interest created herein is
specifically terminated in writing by a duly authorized officer of the
Administrative Agent.
(b) While the Administrative Agent's rights in and to all
Deposit Accounts (in which proceeds of Inventory and Accounts are deposited),
money, and cash are limited to those items arising from, relating to, or
constituting proceeds of Accounts and Inventory, the Administrative Agent and
the Revolving Credit Lenders shall not be bound to inquire into the source of
any funds deposited into a DDA, a Blocked Account or the Concentration Account
by the Borrowers. Any amounts so deposited by the Borrowers shall conclusively
be presumed to be proceeds of the Collateral and the Administrative Agent and
the Revolving Credit Lenders shall not be under any liability or responsibility
to determine whether the funds so deposited constitute proceeds of the
Collateral.
ARTICLE 9 - ADMINISTRATIVE AGENT AS BORROWER'S ATTORNEY-IN-FACT:
9-1. APPOINTMENT AS ATTORNEY-IN-FACT. Each Borrower hereby
irrevocably constitutes and appoints the Administrative Agent as that (acting
through any of its officers) Borrower's true and lawful attorney, with full
power of substitution, during the existence of an Event of Default, to convert
the Collateral into cash at the sole risk, cost, and expense of that Borrower,
but for the sole benefit of the Administrative Agent and the Revolving Credit
Lenders. The rights and powers granted the Administrative Agent by this
appointment include but are not limited to the right and power to:
(a) Prosecute, defend, compromise, or release any action
relating to the Collateral.
(b) Sign change of address forms to change the address to
which each Borrower's mail is to be sent to such address as the
Administrative Agent shall designate; receive and open each Borrower's
mail; remove any Receivables Collateral and Proceeds of Collateral
therefrom and turn over the balance of such mail either to the Lead
Borrower or to any trustee in bankruptcy or receiver of the Lead
Borrower, or other legal representative of a Borrower whom the
Administrative Agent determines to be the appropriate person to whom to
so turn over such mail.
(c) Endorse the name of the relevant Borrower in favor of
the Administrative Agent upon any and all checks, drafts, notes,
acceptances, or other items or instruments; sign and endorse the name
of the relevant Borrower on, and receive as secured party, any of the
Collateral, any invoices, schedules of Collateral, freight or express
receipts, or bills of lading, storage receipts, warehouse receipts, or
other documents of title respectively relating to the Collateral.
(d) Sign the name of the relevant Borrower on any notice
to that Borrower's Account Debtors or verification of the Receivables
Collateral; sign the relevant Borrower's name on any Proof of Claim in
Bankruptcy against Account Debtors, and on notices of lien, claims of
mechanic's liens, or assignments or releases of mechanic's liens
securing the Accounts.
(e) Take all such action as may be necessary to obtain
the payment of any letter of credit and/or banker's acceptance of which
any Borrower is a beneficiary.
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(f) Repair, manufacture, assemble, complete, package,
deliver, alter or supply goods, if any, necessary to fulfill in whole
or in part the purchase order of any customer of each Borrower.
9-2. NO OBLIGATION TO ACT. The Administrative Agent shall not be
obligated to do any of the acts or to exercise any of the powers authorized by
Section 9-1 herein, but if the Administrative Agent elects to do any such act or
to exercise any of such powers, it shall not be accountable for more than it
actually receives as a result of such exercise of power, and shall not be
responsible to any Borrower for any act or omission to act except for any act or
omission to act as to which there is a final determination made in a judicial
proceeding (in which proceeding the Administrative Agent has had an opportunity
to be heard) which determination includes a specific finding that the subject
act or omission to act had been grossly negligent or in actual bad faith.
ARTICLE 10 - EVENTS OF DEFAULT:
The occurrence of any event described in this Article 10 respectively
shall constitute an 'EVENT OF DEFAULT" herein. Upon the occurrence of any Event
of Default described in Section 10-10, any and all Liabilities shall become due
and payable without any further act on the part of the Administrative Agent.
During the existence of any other Event of Default, the Administrative Agent
may, and on the instruction of the Majority Lenders as provided in Section
13-l(b) shall, declare any and all Liabilities shall become immediately due and
payable. The existence of any Event of Default shall also constitute, without
notice or demand, a default under all other agreements between the
Administrative Agent or any Revolving Credit Lender and any Borrower and
instruments and papers heretofore, now, or hereafter given the Administrative
Agent or any Revolving Credit Lender by any Borrower.
10-1. FAILURE TO PAY THE REVOLVING CREDIT. The failure by any
Borrower to pay when due any principal of the Revolving Credit (including,
without limitation, any reimbursement for any drawing under any L/C).
10-2. FAILURE TO MAKE OTHER PAYMENTS. The failure by any Borrower
to pay when due (or upon demand, if payable on demand) any interest on, or fees
in respect of, the Revolving Credit (including, without limitation, L/C fees) or
any other payment Liability (other than any payment liability on account of the
principal of the Revolving Credit), which failure continues for five (5)
Business Days.
10-3. FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD).
The failure by any Borrower to promptly, punctually, faithfully and timely
perform, discharge, or comply with any covenant or Liability included in any of
the following provisions hereof:
Section Relates to:
4-6 Encumbrances
4-7 Indebtedness
4-19 Dividends. Investments. Other Corporate Actions
5-11 Financial Performance Covenant
7-4 Proceeds and Collections
10-4. FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD), (a)
The failure by the Borrowers to promptly, punctually, faithfully and timely
perform, discharge, or comply with the provisions of Section 4-14, which failure
continues for five (5) days after the Lead Borrower's receipt of written notice
from the Administrative Agent.
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(b) The failure by the Borrowers to promptly, punctually,
faithfully and timely perform, discharge, or comply with the provisions of
Article 5, which failure continues for ten (10) Business Days after the Lead
Borrower's receipt of written notice from the Administrative Agent, provided,
however, the foregoing grace period shall not apply to the following
requirements; rather such requirements shall have the benefit of only the
following grace periods:
REQUIRED
BY NUMBER OF GRACE
REPORT / STATEMENT SECTION GRACE PERIOD PERIODS
--------------------------------------------------------------------------------------------------------------------
Borrowing Base Certificates 5-4 One Business Day Three in any 12 months
--------------------------------------------------------------------------------------------------------------------
Monthly Reports 5-5 Three Business Days Three in any 12 months
--------------------------------------------------------------------------------------------------------------------
Quarterly Reports 5-6 Five Business Days Two in any 12 months
--------------------------------------------------------------------------------------------------------------------
Annual Reports 5-7 Ten Business Days One in any 12 months
--------------------------------------------------------------------------------------------------------------------
(c) The failure by any Borrower to perform any covenants under any
Loan Document or any other Liabilities, in each case not described in any of
Sections 10-1, 10-2, 10-3, 10-4(a) or 10-4(b), which failure continues for
twenty (20) days following the Lead Borrower's receipt of written notice from
the Administrative Agent of the breach of any such covenants or Liabilities.
10-5. MISREPRESENTATION. The determination by the Administrative
Agent that any representation or warranty at any time made by any Borrower to
the Administrative Agent or any Revolving Credit Lender was not true or complete
in all material respects when given.
10-6. ACCELERATION OF OTHER DEBT. BREACH OF LEASE.
(a) The occurrence of any event such that any
Indebtedness of any Borrower in excess of $20,000,000.00 to any creditor other
than the Administrative Agent or any Revolving Credit Lender could be
accelerated (whether or not the subject creditor takes any action on account of
such occurrence).
(b) The termination of any Lease as the result of a
default thereunder, which termination individually or in the aggregate with all
other Lease terminations after the date hereof could reasonably be expected to
have a materially adverse effect on the Borrowers' business or financial
condition, taken as a whole.
10-7. UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss,
theft, damage, or destruction of or to any material portion of the Collateral in
excess of $20,000,000.00 in any fiscal year of the Borrowers.
10-8. ATTACHMENT. JUDGMENT. RESTRAINT OF BUSINESS.
(a) The service of process upon the Administrative Agent
or any Revolving Credit Lender or any Participant seeking to attach, by trustee
or other process, any funds of any Borrower on deposit with, or assets of any
Borrower in the possession of, the Administrative Agent or that Revolving Credit
or such Participant unless contested in good faith by the Borrower in
appropriate proceedings.
(b) The entry of any judgment against any Borrower,
which, when aggregated with all other such judgments exceeds $20,000,000.00
(unless adequately insured by a solvent unaffiliated
65
insurance company that has acknowledged coverage), and which judgment is not
satisfied (if a money judgment), bonded, or appealed from (with execution or
similar process stayed) within thirty (30) days of its entry.
(c) The entry of any order or the imposition of any other
process having the force of law, the effect of which is to restrain in any
material way the conduct by any Borrower of its business in the ordinary course
and which has a material adverse effect on the business or assets of the
Borrowers taken as a whole.
10-9. BUSINESS FAILURE. Any act by, against, or relating to any
Borrower, or its property or assets, which act constitutes the determination, by
any Borrower, to initiate a program of substantial or total self-liquidation;
application for, consent to, or sufferance of the appointment of a receiver,
trustee, or other person, pursuant to court action or otherwise, over all, or
any part of any Borrower's property; the granting of any trust mortgage or
execution of an assignment for the benefit of the creditors of any Borrower, or
the occurrence of any other voluntary or involuntary liquidation or extension of
debt agreement for any Borrower; the offering by or entering into by any
Borrower of any composition, extension, or any other arrangement seeking relief
from or extension of the debts of any Borrower; or the initiation of any
judicial or non-judicial proceeding or agreement by, against, or including any
Borrower which seeks or intends to accomplish a reorganization or arrangement
with creditors; and/or the initiation by or on behalf of any Borrower of the
liquidation or winding up of all or any substantial part of any Borrower's
business or operations; provided that if any of the foregoing is commenced
against a Borrower, no Event of Default shall be deemed to have arisen hereunder
if such action is timely contested in good faith by that Borrower by appropriate
proceedings and is terminated or dismissed within sixty (60) days of when
commenced.
10-10. BANKRUPTCY. The failure by any Borrower to generally pay the
debts of that Borrower as they mature; adjudication of bankruptcy or insolvency
relative to any Borrower; the entry of an order for relief or similar order with
respect to any Borrower in any proceeding pursuant to the Bankruptcy Code or any
other federal bankruptcy law; the filing of any complaint, application, or
petition by any Borrower initiating any matter in which any Borrower is or may
be granted any relief from the debts of that Borrower pursuant to the Bankruptcy
Code or any other insolvency statute or procedure; the filing of any complaint,
application, or petition against any Borrower initiating any matter in which
that Borrower is or may be granted any relief from the debts of that Borrower
pursuant to the Bankruptcy Code or any other insolvency statute or procedure,
which complaint, application, or petition is not timely contested in good faith
by that Borrower by appropriate proceedings or, if so contested, is not
dismissed within sixty (60) days of when filed.
10-11. INDICTMENT - FORFEITURE. The indictment of, or institution of
any legal process or proceeding against, any Borrower, under any Applicable Law
where the relief, penalties, or remedies sought or available include the
forfeiture of any property of any Borrower and/or the imposition of any stay or
other order, the effect of which would reasonably be expected to have a material
adverse effect on the business or assets of the Borrowers taken as a whole.
10-12. CHALLENGE TO LOAN DOCUMENTS.
(a) Any challenge by or on behalf of any Borrower of the
Liabilities to the validity of any Loan Document or the applicability or
enforceability of any Loan Document strictly in accordance with the subject Loan
Document's material terms or which seeks to void, avoid, limit, or otherwise
adversely affect any security interest created by or in any Loan Document or any
payment made pursuant thereto.
(b) Any determination by any court or any other judicial
or government authority that any Loan Document is not enforceable strictly in
accordance with the subject Loan Document's
66
material terms or which voids, avoids, limits, or otherwise adversely affects
any security interest created by any Loan Document or any payment made pursuant
thereto.
10-13. CHANGE IN CONTROL. Any Change in Control.
10-14 DEFAULT UNDER CITI COMMERCE SOLUTIONS AGREEMENT. The
occurrence of any default by the Lead Borrower under the Amended and Restated
Merchant Services Agreement dated October 1, 2000 between Citi Commerce
Solutions, successor to Associates Capital Bank, and the Lead Borrower (as
amended and in effect) pursuant to which the Lead Borrower becomes obligated to
pay an amount greater than or equal to $50,000,000.00 to Citi Commerce Solutions
(including its successors or assigns) thereunder unless prior to and after
giving effect to such payment, Availability is at least $200,000,000.00 and
Availability is projected on a pro forma basis to be at least $200,000,000.00
for the two Fiscal quarters immediately following such payment.
ARTICLE 11 - RIGHTS AND REMEDIES UPON DEFAULT:
▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇. During the existence of any Event of Default as
described in Section 10-10, the Revolving Credit Commitments shall be terminated
and all Liabilities of the Borrower to the Revolving Credit Lenders shall be
immediately due and payable. During the existence of any Event of Default other
than as described in Section 10-10, the Administrative Agent may (and on the
issuance of Notice(s) of Acceleration, the Administrative Agent shall) terminate
the Revolving Credit Commitments and declare all Liabilities of the Borrower to
the Revolving Credit Lenders to be immediately due and payable and may exercise
all of the Administrative Agent's Rights and Remedies as the Administrative
Agent from time to time thereafter determines as appropriate.
11-2. RIGHTS OF ENFORCEMENT. During the existence of any Event of
Default, the Administrative Agent shall have all of the rights and remedies of a
secured party upon default under the UCC, in addition to which the
Administrative Agent shall have all and each of the following rights and
remedies:
(a) To give notice to any bank at which any DDA or
Blocked Account is maintained and in which Proceeds of Collateral are
deposited, to turn over such Proceeds directly to the Administrative
Agent.
(b) To give notice to any customs broker of any of the
Borrowers to follow the instructions of the Administrative Agent as
provided in any written agreement or undertaking of such broker in
favor of the Administrative Agent.
(c) To collect the Receivables Collateral with or without
the taking of possession of any of the Collateral.
(d) To take possession of all or any portion of the
Collateral.
(e) To sell, lease, or otherwise dispose of any or all of
the Collateral, in its then condition or following such preparation or
processing as the Administrative Agent deems advisable and with or
without the taking of possession of any of the Collateral.
(f) To conduct one or more going out of business sales
which include the sale or other disposition of the Collateral, subject
to the rights of lessors under any Leases and applicable law.
(g) To apply the Proceeds of the Collateral in reduction
of the Liabilities.
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(h) To exercise all or any of the rights, remedies,
powers, privileges, and discretions under all or any of the Loan
Documents.
11-3. SALE OF COLLATERAL.
(a) Any sale or other disposition of the Collateral may
be at public or private sale upon such terms and in such manner as the
Administrative Agent deems advisable, having due regard to compliance with any
statute or regulation which might affect, limit, or apply to the Administrative
Agent's disposition of the Collateral.
(b) The Administrative Agent, in the exercise of the
Administrative Agent's rights and remedies during the existence of an Event of
Default, may conduct one or more going out of business sales, in the
Administrative Agent's own right or by one or more agents and contractors. Such
sale(s) may be conducted upon any premises owned, leased, or occupied by any
Borrower, subject to the rights of lessors under any Leases and applicable law.
(c) Unless the Collateral is perishable or threatens to
decline speedily in value, or is of a type customarily sold on a recognized
market (in which event the Administrative Agent shall provide the Lead Borrower
such notice as may be practicable under the circumstances), the Administrative
Agent shall give the Lead Borrower at least ten (10) days prior written notice
of the date, time, and place of any proposed public sale, and of the date after
which any private sale or other disposition of the Collateral may be made. Each
Borrower agrees that such written notice shall satisfy all requirements for
notice to that Borrower which are imposed under the UCC or other applicable law
with respect to the exercise of the Administrative Agent's rights and remedies
upon default.
(d) The Administrative Agent and any Revolving Credit
Lender may purchase the Collateral, or any portion of it at any sale held under
this Article.
(e) If any of the Collateral is sold, leased, or
otherwise disposed of by the Administrative Agent on credit, the Liabilities
shall not be deemed to have been reduced as a result thereof unless and until
payment is finally received thereon by the Administrative Agent.
(f) The Administrative Agent shall apply the proceeds of
the Administrative Agent's exercise of its rights and remedies upon default
pursuant to this Article 11 in accordance with Sections 13-6 and 13-7.
11-4. OCCUPATION OF BUSINESS LOCATION. In connection with the
Administrative Agent's exercise of the Administrative Agent's rights under this
Article 11, during the existence of an Event of Default, the Administrative
Agent may enter upon, occupy, and use any premises owned or occupied by each
Borrower, subject to the rights of lessors under any Leases and applicable law,
and may exclude each Borrower from such premises or portion thereof as may have
been so entered upon, occupied, or used by the Administrative Agent. The
Administrative Agent shall not be required to remove any of the Collateral from
any such premises upon the Administrative Agent's taking possession thereof, and
may render any Collateral unusable to the Borrowers. In no event shall the
Administrative Agent be liable to any Borrower for use or occupancy by the
Administrative Agent of any premises pursuant to this Article 11, nor for any
charge (such as wages for any Borrower's employees and utilities) incurred in
connection with the Administrative Agent's exercise of the Administrative
Agent's Rights and Remedies.
11-5. GRANT OF NONEXCLUSIVE LICENSE. Each Borrower hereby grants to
the Administrative Agent a royalty free nonexclusive irrevocable license during
the existence of an Event of Default and subject to the rights of any third
Person (including, without limitation, any lessor under a Lease) and Applicable
Law (a) to use, apply, and affix any trademark, trade name, logo, or the like in
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which any Borrower now or hereafter has rights, such license being with respect
to the Administrative Agent's exercise of the rights hereunder including,
without limitation, in connection with any completion of the sale or other
disposition of Inventory, and (b) to use any or all furniture, fixtures and
equipment located at any of the stores or other leased facilities of the
Borrowers in connection with any completion of the sale or other disposition of
Inventory, and (c) to use any or all intellectual property, general intangibles
(including, without limitation, the Borrowers' trade names), books, records, and
information relating to the Collateral and/or to the operation of each
Borrower's business, and all rights of access to such books, records, and
information, and all property in which such books, records, and information are
stored, recorded, and maintained, and other assets of each Borrower.
11-6. ASSEMBLY OF COLLATERAL. The Administrative Agent may require
any Borrower to assemble the Collateral and make it available to the
Administrative Agent at the Borrowers' sole risk and expense at a place or
places which are reasonably convenient to both the Administrative Agent and the
Lead Borrower.
11-7. RIGHTS AND REMEDIES. The rights, remedies, powers,
privileges, and discretions of the Administrative Agent hereunder (herein, the
"ADMINISTRATIVE AGENT'S RIGHTS AND REMEDIES") shall be cumulative and not
exclusive of any rights or remedies which it would otherwise have. No delay or
omission by the Administrative Agent in exercising or enforcing any of the
Administrative Agent's Rights and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Administrative Agent of any Event of Default or
of any default under any other agreement shall operate as a waiver of any other
default hereunder or under any other agreement. No single or partial exercise of
any of the Administrative Agent's Rights or Remedies, and no express or implied
agreement or transaction of whatever nature entered into between the
Administrative Agent and any person, at any time, shall preclude the other or
further exercise of the Administrative Agent's Rights and Remedies. No waiver by
the Administrative Agent of any of the Administrative Agent's Rights and
Remedies on any one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a continuing waiver. The Administrative Agent's
Rights and Remedies may be exercised at such time or times and in such order of
preference as the Administrative Agent may determine. The Administrative Agent's
Rights and Remedies may be exercised without resort or regard to any other
source of satisfaction of the Liabilities.
ARTICLE 12 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:
12-1. REVOLVING CREDIT FUNDING PROCEDURES. Subject to Section 12-2:
(a) The Administrative Agent shall advise each Revolving
Credit Lender, no later than 1:30PM on a date on which any Revolving
Credit Loan (other than a SwingLine Loan) is to be made on that date.
Such advice, in each instance, may be by telephone or facsimile
transmission, provided that if such advice is by telephone, it shall be
confirmed in writing. Advice of a Revolving Credit Loan shall include
the amount of and interest rate applicable to the subject Revolving
Credit Loan.
(b) Subject to that Revolving Credit Lender's Revolving
Credit Commitment, each Revolving Credit Lender, by no later than the
end of business on the day on which the subject Revolving Credit Loan
is to be made, shall Transfer that Revolving Credit Lender's Revolving
Credit Commitment Percentage of the subject Revolving Credit Loan to
the Administrative Agent.
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12-2. SWINGLINE LOANS.
(a) In the event that, when a Revolving Credit Loan is
requested, the aggregate unpaid balance of the SwingLine Loan is less than the
SwingLine Loan Ceiling, then the SwingLine Lender may advise the Administrative
Agent that the SwingLine Lender has determined to include up to the amount of
the requested Revolving Credit Loan as part of the SwingLine Loan. In such
event, the SwingLine Lender shall Transfer the amount of the requested Revolving
Credit Loan to the Administrative Agent.
(b) The SwingLine Loan shall be converted to a Revolving
Credit Loan in which all Revolving Credit Lenders participate as follows:
(i) At any time and from time to time, the
SwingLine Lender may advise the Administrative Agent that all, or any
part of the SwingLine Loan is to be converted to a Revolving Credit
Loan in which all Revolving Credit Lenders participate.
(ii) At the initiation of a Liquidation, the then
entire unpaid principal balance of the SwingLine Loan shall be
converted to a Revolving Credit Loan in which all Revolving Credit
Lenders participate.
In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if such
conversion were the making of a Revolving Credit Loan as provided in Section
12-1.
(c) The SwingLine Lender, in separate capacities, may
also be the Administrative Agent and a Revolving Credit Lender.
(d) The SwingLine Lender, in its capacity as SwingLine
Lender, is not a "Revolving Credit Lender" for any of the following purposes:
(i) Except as otherwise specifically provided in
the relevant Section, any distribution pursuant to Section 13-6.
(ii) Determination of whether the requisite
Revolving Credit Commitments have Consented to action requiring such
Consent.
12-3. ADMINISTRATIVE AGENT'S COVERING OF FUNDINGS:
(a) Each Revolving Credit Lender shall make
available to the Administrative Agent, as provided herein, that Revolving Credit
Lender's Revolving Credit Commitment Percentage of the following:
(i) Each Revolving Credit Loan, up to the
maximum amount of that Revolving Credit Lender's Revolving Credit
Commitment of the Revolving Credit Loans.
(ii) Up to the maximum amount of that Revolving
Credit Lender's Revolving Credit Commitment of each L/C Drawing (to the
extent that such L/C Drawing is not "covered" by a Revolving Credit
Loan as provided herein).
(b) In all circumstances, the Administrative Agent may:
(i) Assume that each Revolving Credit Lender,
subject to Section 12-3(a), timely shall make available to the
Administrative Agent that Revolving Credit Lender's
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Revolving Credit Commitment Percentage of each Revolving Credit Loan,
notice of which is provided pursuant to Section 12-1.
(ii) In reliance upon such assumption, make
available the corresponding amount to the Borrowers.
(iii) Assume that each Revolving Credit Lender
timely shall pay, and shall make available, to the Administrative Agent
all other amounts which that Revolving Credit Lender is obligated to so
pay and/or make available hereunder or under any of the Loan Documents.
(c) In the event that, in reliance upon any of such
assumptions, the Administrative Agent makes available, a Revolving Credit
Lender's Revolving Credit Commitment Percentage of one or more Revolving Credit
Loans, or any other amount to be made available hereunder or under any of the
Loan Documents, which amount a Revolving Credit Lender (a "DELINQUENT REVOLVING
CREDIT LENDER") fails to provide to the Administrative Agent within one (1)
Business Day of written notice of such failure, then:
(i) The amount which had been made available by
the Administrative Agent is an "ADMINISTRATIVE AGENT'S COVER" (and is
so referred to herein).
(ii) All interest paid by the Borrowers on
account of the Revolving Credit Loan or coverage of the subject L/C
Drawing which consist of the Administrative Agent's Cover shall be
retained by the Administrative Agent until the Administrative Agent's
Cover, with interest, has been paid.
(iii) The Delinquent Revolving Credit Lender shall
pay to the Administrative Agent, on demand, interest at a rate equal to
the prevailing federal funds rate on any Administrative Agent's Cover
in respect of that Delinquent Revolving Credit Lender
(iv) The Administrative Agent shall have
succeeded to all rights to payment to which the Delinquent Revolving
Credit Lender otherwise would have been entitled hereunder in respect
of those amounts paid by or in respect of the Borrowers on account of
the Administrative Agent's Cover together with interest until it is
repaid. Such payments shall be deemed made first towards the amounts in
respect of which the Administrative Agent's Cover was provided and only
then towards amounts in which the Delinquent Revolving Credit Lender is
then participating. For purposes of distributions to be made pursuant
to Section 12-4(a) (which relates to ordinary course distributions) or
Section 13-6 (which relates to distributions of proceeds of a
Liquidation) below, amounts shall be deemed distributable to a
Delinquent Revolving Credit Lender (and consequently, to the
Administrative Agent to the extent to which the Administrative Agent is
then entitled) at the highest level of distribution (if applicable) at
which the Delinquent Revolving Credit Lender would otherwise have been
entitled to a distribution.
(v) Subject to Subsection 12-3(c)(iv), the Delinquent
Revolving Credit Lender shall be entitled to receive any payments from
the Borrowers to which the Delinquent Revolving Credit Lender is then
entitled, provided however there shall be deducted from such amount and
retained by the Administrative Agent any interest to which the
Administrative Agent is then entitled on account of Section
12-3(c)(ii), above.
(d) A Delinquent Revolving Credit Lender shall not be
relieved of any obligation of such Delinquent Revolving Credit Lender hereunder
(all and each of which shall constitute continuing obligations on the part of
any Delinquent Revolving Credit Lender).
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(e) A Delinquent Revolving Credit Lender may cure its
status as a Delinquent Revolving Credit Lender by paying the Administrative
Agent the aggregate of the following:
(i) The Administrative Agent's Cover (to the
extent not previously repaid by the
Borrowers and retained by the Administrative
Agent in accordance with Subsection
12-3(c)(iv), above) with respect to that
Delinquent Revolving Credit Lender.
Plus
(ii) The aggregate of the amount payable under
Subsection 12-3(c)(iii), above (which
relates to interest to be paid by that
Delinquent Revolving Credit Lender).
Plus
(iii) All such costs and expenses as may be
incurred by the Administrative Agent in the
enforcement of the Administrative Agent's
rights against such Delinquent Revolving
Credit Lender.
12-4. ORDINARY COURSE DISTRIBUTIONS. (This Section 12-4 applies, and
sets forth rights and obligations amongst the Lenders only, unless the
provisions of Section 13-6 (which relates to distributions in the event of a
Liquidation) becomes operative).
(a) Weekly, on such day as may be set from time to time
by the Administrative Agent (or more frequently at the Administrative Agent's
option) the Administrative Agent and each Revolving Credit Lender shall settle
up on amounts advanced under the Revolving Credit and collected funds received
in the Concentration Account or otherwise paid by the Borrowers.
(b) The Administrative Agent shall distribute to the
SwingLine Lender and to each Revolving Credit Lender, such Person's respective
pro-rata share of interest payments on the Revolving Credit Loans when actually
received and collected by the Administrative Agent (excluding the one Business
Days for settlement provided for in Section 7-5(a), which shall be for the
account of the Administrative Agent only). For purposes of calculating interest
due to a Revolving Credit Lender, that Revolving Credit Lender shall be entitled
to receive interest on the actual amount contributed by that Revolving Credit
Lender towards the principal balance of the Revolving Credit Loans outstanding
during the applicable period covered by the interest payment made by the
Borrowers. Any net principal reductions to the Revolving Credit Loans received
by the Administrative Agent in accordance with the Loan Documents during such
period shall not reduce such actual amount so contributed, for purposes of
calculation of interest due to that Revolving Credit Lender, until the
Administrative Agent has distributed to that Revolving Credit Lender its
pro-rata share thereof.
(c) The Administrative Agent shall distribute Revolving
Credit Early Termination Fees, L/C fees, and, except as otherwise provided in
Section 2-15, Line Fees paid on account of the Revolving Credit to the Revolving
Credit Lenders pro rata based upon their respective Revolving Credit Commitment
Percentages.
(d) No Revolving Credit Lender shall have any interest
in, or right to receive any part of, the Revolving Credit Commitment Fee or the
Administrative Agent's Fee to be paid by the Borrowers to the Administrative
Agent pursuant to this Agreement. Each Revolving Credit Lender shall be paid
such fees upon becoming a Revolving Credit Lender hereunder as may be agreed
between such Revolving Credit Lender and the Arranger.
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(e) Any amount received by the Administrative Agent as
reimbursement for any cost or expense (including without limitation, attorneys'
reasonable fees) shall be distributed by the Administrative Agent to that Person
which is entitled to such reimbursement as provided in this Agreement (and if
such Person(s) is (are) the Revolving Credit Lenders, pro-rata based upon their
respective Revolving Credit Commitment Percentages at the date on which the
expense, in respect of which such reimbursement is being made, was incurred).
(f) Each distribution pursuant to this Section 12-4 is
subject to Section 12-3(c), above.
ARTICLE 13 - ACCELERATION AND LIQUIDATION:
13-1. ACCELERATION NOTICES
(a) The Administrative Agent may give the Revolving
Credit Lenders a Notice of Acceleration at any time during the existence of an
Event of Default.
(b) The Majority Lenders may give the Administrative
Agent a Notice of Acceleration at any time during the existence of an Event of
Default. Such notice may be by multiple counterparts.
13-2. ACCELERATION Unless stayed by judicial or statutory process,
the Administrative Agent shall accelerate the time for payment of the
Liabilities and declare the Liabilities immediately due and payable in full
within a commercially reasonable time following:
(a) The Administrative Agent's giving of a Notice of
Acceleration to the Revolving Credit Lenders as provided in Section
13-l(a).
(b) The Administrative Agent's receipt of a Notice of
Acceleration from the Majority Lenders, in compliance with Section
13-l(b).
13-3. INITIATION OF LIQUIDATION Unless stayed by judicial or
statutory process, a Liquidation shall be initiated by the Administrative Agent
within a commercially reasonable time following acceleration of the Liabilities.
13-4. ACTIONS AT AND FOLLOWING INITIATION OF LIQUIDATION
(a) At the initiation of a Liquidation:
(i) The unpaid principal balance of the
SwingLine Loan (if any) shall be converted, pursuant to Section
12-2(b)(ii), to a Revolving Credit Loan in which all Revolving Credit
Lenders participate.
(ii) The Administrative Agent and the Revolving
Credit Lenders shall "net out" each Revolving Credit Lender's
respective contributions towards the Revolving Credit Loans, so that
each Revolving Credit Lender holds that Revolving Credit Lender's
Revolving Credit Commitment Percentage of the Revolving Credit Loans
and advances.
(b) Following the initiation of a Liquidation, each
Revolving Credit Lender shall contribute, towards any L/C thereafter honored and
not immediately reimbursed by the Borrowers, that Revolving Credit Lender's
Revolving Credit Commitment Percentage of such honoring.
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13-5. ADMINISTRATIVE AGENT'S CONDUCT OF LIQUIDATION
(a) Any Liquidation shall be conducted by the
Administrative Agent, with the advice and assistance of the Revolving Credit
Lenders.
(b) The Administrative Agent may establish one or more
Nominees to "bid in" or otherwise acquire ownership to any Post Foreclosure
Asset, provided that the Administrative Agent may "bid in" for any such assets
only at such prices as may be directed by the Majority Lenders.
(c) The Administrative Agent shall manage the Nominee and
manage and dispose of any Post Foreclosure Assets with a view towards the
realization of the economic benefits of the ownership of the Post Foreclosure
Assets and in such regard, the Administrative Agent and/or the Nominee may
operate, repair, manage, maintain, develop, and dispose of any Post Foreclosure
Asset in such manner as the Administrative Agent determines as appropriate under
the circumstances.
(d) The Administrative Agent may decline to undertake or
to continue taking a course of action or to execute an action plan (whether
proposed by the Administrative Agent or any Revolving Credit Lender) unless
indemnified to the Administrative Agent's satisfaction by the Revolving Credit
Lenders against any and all liability and expense which may be incurred by the
Administrative Agent by reason of taking or continuing to take that course of
action or action plan.
(e) Each Revolving Credit Lender shall execute all such
instruments and documents not inconsistent with the provisions of this Agreement
as the Administrative Agent and/or the Nominee reasonably may request with
respect to the creation and governance of any Nominee, the conduct of the
Liquidation, and the management and disposition of any Post Foreclosure Asset.
13-6. DISTRIBUTION OF LIQUIDATION PROCEEDS:
(a) During the existence of an Event of Default, the
Administrative Agent may establish one or more reasonably funded reserve
accounts into which proceeds of the conduct of any Liquidation may be deposited
in anticipation of future expenses which may be incurred by the Administrative
Agent in the exercise of rights as a secured creditor of the Borrowers and prior
claims which the Administrative Agent reasonably anticipates may need to be
paid.
(b) The Administrative Agent shall distribute the net
proceeds of Liquidation in accordance with the relative priorities set forth in
Section 13-7.
(c) Each Revolving Credit Lender, on the written request
of the Administrative Agent and/or any Nominee, not more frequently than once
each month, shall reimburse the Administrative Agent and/or any Nominee,
Pro-Rata, for any cost or expense reasonably incurred by the Administrative
Agent and/or the Nominee in the conduct of a Liquidation, which amount is not
covered out of current proceeds of the Liquidation, which reimbursement shall be
paid over to and distributed by the Administrative Agent.
13-7. RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION The relative
priorities to the proceeds of a Liquidation are as follows:
(a) To the Administrative Agent as reimbursement for all
reasonable third party costs and expenses incurred by
the Administrative Agent and to Lenders' Special
Counsel and to any funded reserve established
pursuant to Section 13-6(a); and then
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(b) To the SwingLine Lender, on account of any SwingLine
loans not converted to Revolving Credit Loans
pursuant to Section 13-4(a)(i); and then
(c) To the Revolving Credit Lenders (other than any
Delinquent Revolving Credit Lender), pro-rata, to the
unpaid principal balance of the Revolving Credit; and
then
(d) To the Revolving Credit Lenders (other than any
Delinquent Revolving Credit Lender), pro-rata, to
accrued interest on the Revolving Credit; and then
(e) To the Revolving Credit Lenders (other than any
Delinquent Revolving Credit Lender), pro-rata, to
those fees distributable hereunder to the Revolving
Credit Lenders; and then
(f) To any Delinquent Revolving Credit Lenders, pro-rata
to amounts to which such Revolving Credit Lenders
otherwise would have been entitled pursuant to
Sections 13-7(c), 13-7(d), 1313-7(e)13-7(e); and then
(g) To the Revolving Credit Lenders, pro-rata, to the
extent of the Revolving Credit Early Termination Fee;
and then
(h) To any other Liabilities then outstanding (including,
without limitation on account of any claims then
threatened or asserted against the Administrative
Agent, the Issuing Bank, or any Revolving Credit
Lender for which the Borrowers are obligated to
provide an indemnity).
(i) To the Lead Borrower.
ARTICLE 14 - THE ADMINISTRATIVE AGENT:
14-1. APPOINTMENT OF THE ADMINISTRATIVE AGENT
(a) Each Lender appoints and designates Fleet Retail
Finance Inc. as the "Administrative Agent" hereunder and under the Loan
Documents.
(b) Each Revolving Credit Lender authorizes the
Administrative Agent:
(i) To execute those of the Loan Documents and
all other instruments relating thereto to which the Administrative
Agent is a party.
(ii) To take such action on behalf of the
Revolving Credit Lenders and to exercise all such powers as are
expressly delegated to the Administrative Agent hereunder and in the
Loan Documents and all related documents, together with such other
powers as are reasonably incident thereto.
14-2. RESPONSIBILITIES OF ADMINISTRATIVE AGENT; OTHER AGENTS
(a) The Administrative Agent shall not have any duties or
responsibilities to, or any fiduciary relationship with, any Revolving Credit
Lender except for those expressly set forth in this Agreement.
(b) Neither the Administrative Agent nor any of its
Affiliates shall be responsible to any Revolving Credit Lender for any of the
following:
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(i) Any recitals, statements, representations or
warranties made by any Borrower or any other Person.
(ii) Any appraisals or other assessments of the
assets of any Borrower or of any other Person responsible for or on
account of the Liabilities.
(iii) The value, validity, effectiveness,
genuineness, enforceability, or sufficiency of the Loan Agreement, the
Loan Documents or any other document referred to or provided for
therein.
(iv) Any failure by any Borrower or any other
Person (other than the Administrative Agent) to perform its obligations
under the Loan Documents.
(c) The Administrative Agent may employ attorneys,
accountants, and other professionals and agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such attorneys,
accountants, and other professionals or agents or attorneys-in-fact selected by
the Administrative Agent with reasonable care. No such attorney, accountant,
other professional, agent, or attorney-in-fact shall be responsible for any
action taken or omitted to be taken by any other such Person.
(d) Neither the Administrative Agent, nor any of its
directors, officers, or employees shall be responsible for any action taken or
omitted to be taken or omitted to be taken by any other of them in connection
herewith in reliance upon advice of its counsel nor, in any other event except
for any action taken or omitted to be taken as to which a final judicial
determination has been or is made (in a proceeding in which such Person has had
an opportunity to be heard) that such Person had acted in a grossly negligent
manner, in actual bad faith, or in willful misconduct.
(e) The Administrative Agent shall not have any
responsibility in any event for more funds than the Administrative Agent
actually receives and collects.
(f) The Administrative Agent, in its separate capacity as
a Lender, shall have the same rights and powers hereunder as any other Lender.
(g) None of the Documentation Agent, the Syndication
Agent, or the Co-Agents shall have any powers, rights, duties, responsibilities,
or liabilities with respect to this Agreement and the other Loan Documents.
14-3. CONCERNING DISTRIBUTIONS BY THE ADMINISTRATIVE AGENT
(a) The Administrative Agent in the Administrative
Agent's reasonable discretion based upon the Administrative Agent's
determination of the likelihood that additional payments will be received,
expenses incurred, and/or claims made by third parties to all or a portion of
such proceeds, may delay the distribution of any payment received on account of
the Liabilities.
(b) The Administrative Agent may disburse funds prior to
determining that the sums which the Administrative Agent expects to receive have
been finally and unconditionally paid to the Administrative Agent. If and to the
extent that the Administrative Agent does disburse funds and it later becomes
apparent that the Administrative Agent did not then receive a payment in an
amount equal to the sum paid out, then any Revolving Credit Lender to whom the
Administrative Agent made the funds available, on demand from the Administrative
Agent, shall refund to the Administrative Agent the sum paid to that person.
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(c) If, in the opinion of the Administrative Agent, the
distribution of any amount received by the Administrative Agent might involve
the Administrative Agent in liability, or might be prohibited hereby, or might
be questioned by any Person, then the Administrative Agent may refrain from
making distribution until the Administrative Agent's right to make distribution
has been adjudicated by a court of competent jurisdiction.
(d) The proceeds of any Revolving Credit Lender's
exercise of any right of, or in the nature of, set-off shall be deemed, First,
to the extent that a Revolving Credit Lender is entitled to any distribution
hereunder, to constitute such distribution and Second, shall be shared with the
other Revolving Credit Lenders as if distributed pursuant to (and shall be
deemed as distributions under) Section 13-7.
(e) Each Revolving Credit Lender recognizes that the
crediting of the Borrowers with the "proceeds" of any transaction in which a
Post Foreclosure Asset is acquired is a non-cash transaction and that, in
consequence, no distribution of such "proceeds" will be made by the
Administrative Agent to any Lender.
(f) In the event that (x) a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Administrative Agent is to be repaid or disgorged or (y) the Majority Lenders
determine to effect such repayment or disgorgement, then each Revolving Credit
Lender to which any such distribution shall have been made shall repay, to the
Administrative Agent which had made such distribution, that Revolving Credit
Lender's Pro-Rata share of the amount so adjudged or determined to be repaid or
disgorged.
14-4. DISPUTE RESOLUTION: Any dispute among the Revolving Credit
Lenders and/or the Administrative Agent concerning the interpretation,
administration, or enforcement of the financing arrangements contemplated by
this or any other Loan Document or the interpretation or administration of this
or any other Loan Document which cannot be resolved amicably shall be resolved
in the United States District Court for the District of Massachusetts, sitting
in Boston or in the Superior Court of Suffolk County, Massachusetts, to the
jurisdiction of which courts each Revolving Credit Lender hereto hereby submits.
14-5. DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS The Administrative
Agent will forward to each Revolving Credit Lender, promptly after the
Administrative Agent's receipt thereof, a copy of each notice or other document
furnished to the Administrative Agent pursuant to this Agreement, including
monthly, quarterly, and annual financial statements received from the Lead
Borrower pursuant to Article 5 of this Agreement, other than any of the
following:
(a) Routine communications associated with requests for
Revolving Credit Loans and/or the issuance of L/Cs.
(b) Routine or nonmaterial communications.
(c) Any notice or document of which the Administrative
Agent has knowledge that such notice or document had been forwarded to
the Revolving Credit Lenders other than by the Administrative Agent.
14-6. CONFIDENTIAL INFORMATION
(a) Each Revolving Credit Lender will maintain, as
confidential, all of the following:
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(i) Proprietary approaches, techniques, and
methods of analysis which are applied by the Administrative Agent in
the administration of the credit facility contemplated by this
Agreement.
(ii) Proprietary forms and formats utilized by
the Administrative Agent in providing reports to the Revolving Credit
Lenders pursuant hereto, which forms or formats are not of general
currency.
(b) Nothing included herein shall prohibit the disclosure
of any such information as may be required to be provided by judicial process or
by regulatory authorities having jurisdiction over any party to this Agreement.
14-7. RELIANCE BY ADMINISTRATIVE AGENT The Administrative Agent
shall be entitled to rely upon any certificate, notice or other document
(including any cable, telegram, telex, or facsimile) reasonably believed by the
Administrative Agent to be genuine and correct and to have been signed or sent
by or on behalf of the proper person or persons, and upon advice and statements
of attorneys, accountants and other experts selected by the Administrative
Agent. As to any matters not expressly provided for in this Agreement, any Loan
Document, or in any other document referred to therein, the Administrative Agent
shall in all events be fully protected in acting, or in refraining from acting,
in accordance with the applicable Consent required by this Agreement.
Instructions given with the requisite Consent shall be binding on all Revolving
Credit Lenders.
14-8. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER REVOLVING
CREDIT LENDERS
(a) Each Revolving Credit Lender represents to all other
Revolving Credit Lenders and to the Administrative Agent that such Revolving
Credit Lender:
(i) Independently and without reliance on any
representation or act by Administrative Agent or by any other Revolving
Credit Lender, and based on such documents and information as that
Revolving Credit Lender has deemed appropriate, has made such Revolving
Credit Lender's own appraisal of the financial condition and affairs of
the Borrowers and decision to enter into this Agreement.
(ii) Has relied upon that Revolving Credit
Lender's review of the Loan Documents by that Revolving Credit Lender
and by counsel to that Revolving Credit Lender as that Revolving Credit
Lender deemed appropriate under the circumstances.
(b) Each Revolving Credit Lender agrees that such
Revolving Credit Lender, independently and without reliance upon Administrative
Agent or any other Revolving Credit Lender, and based upon such documents and
information as such Revolving Credit Lender shall deem appropriate at the time,
will continue to make such Revolving Credit Lender's own appraisals of the
financial condition and affairs of the Borrowers when determining whether to
take or not to take any discretionary action under this Agreement.
(c) The Administrative Agent, in the discharge of that
Administrative Agent's duties hereunder, shall not be required to make inquiry
of, or to inspect the properties or books of, any Person.
(d) Except for notices, reports, and other documents and
information expressly required to be furnished to the Revolving Credit Lenders
by the Administrative Agent hereunder (as to which, see Section 14-5), the
Administrative Agent shall not have any affirmative duty or responsibility
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to provide any Lender with any credit or other information concerning any
Person, which information may come into the possession of Administrative Agent
or any Affiliate of the Administrative Agent.
(e) Each Revolving Credit Lender, at such Revolving
Credit Lender's request, shall have reasonable access to all nonprivileged
documents in the possession of the Administrative Agent, which documents relate
to the Administrative Agent's performance of its duties hereunder.
14-9. INDEMNIFICATION Without limiting the liabilities of the
Borrowers under any this or any of the other Loan Documents, each Revolving
Credit Lender shall indemnify the Administrative Agent, pro rata based upon
their respective Revolving Credit Commitment Percentages, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including
reasonable attorneys' fees and expenses and other out-of-pocket expenditures)
which may at any time be imposed on, incurred by, or asserted against the
Administrative Agent and in any way relating to or arising out of this Agreement
or any other Loan Document or any documents contemplated by or referred to
therein or the transactions contemplated thereby or the enforcement of any of
terms hereof or thereof or of any such other documents, provided, however, no
Revolving Credit Lender shall be liable for any of the foregoing to the extent
that any of the foregoing arises from any action taken or omitted to be taken by
the Administrative Agent as to which a final judicial determination has been or
is made (in a proceeding in which the Administrative Agent has had an
opportunity to be heard) that the Administrative Agent had acted in a grossly
negligent manner, in actual bad faith, or in willful misconduct.
14-10. RESIGNATION OF ADMINISTRATIVE AGENT
(a) The Administrative Agent may resign at any time by
giving 60 days prior written notice thereof to the Revolving Credit Lenders.
Upon receipt of any such notice of resignation, the Majority Lenders shall have
the right to appoint a successor to such Administrative Agent, which shall be a
Revolving Credit Lender (and if no Event of Default has occurred, with the
consent of the Lead Borrower, not to be unreasonably withheld and, in any event,
deemed given by the Lead Borrower if no written objection is provided by the
Lead Borrower to the (resigning) Administrative Agent within seven (7) Business
Days notice of such proposed appointment). If a successor Administrative Agent
shall not have been so appointed and accepted such appointment within 30 days
after the giving of notice by the resigning Administrative Agent, then the
resigning Administrative Agent may appoint a successor Administrative Agent,
which shall be a financial institution having a combined capital and surplus in
excess of $300,000,000. The consent of the Lead Borrower otherwise required by
this Section 14-10(a) shall not be required if an Event of Default has occurred.
(b) Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor shall thereupon succeed to, and become vested with, all the rights,
powers, privileges, and duties of the (resigning) Administrative Agent so
replaced, and the (resigning) Administrative Agent shall be discharged from the
(resigning) Administrative Agent's duties and obligations hereunder, other than
on account of any responsibility for any action taken or omitted to be taken by
the (resigning) Administrative Agent as to which a final judicial determination
has been or is made (in a proceeding in which the (resigning) Person has had an
opportunity to be heard) that such Person had acted in a grossly negligent
manner or in bad faith.
(c) After any retiring Administrative Agent's
resignation, the provisions of this Agreement and of all other Loan Documents
shall continue in effect for the retiring Person's benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Administrative
Agent.
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ARTICLE 15 - ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS:
15-1. ADMINISTRATION OF CREDIT FACILITIES
(a) Except as otherwise specifically provided in this
Agreement, the Administrative Agent may take any action with respect to the
credit facility contemplated by the Loan Documents as the Administrative Agent
determines to be appropriate, provided, however, the Administrative Agent is not
under any affirmative obligation to take any action which it is not required by
this Agreement or the Loan Documents specifically to so take.
(b) Except as specifically provided in the following
Sections of this Agreement, whenever a Loan Document or this Agreement provides
that action may be taken or omitted to be taken in an Administrative Agent's
discretion, the Administrative Agent shall have the sole right to take, or
refrain from taking, such action without, and notwithstanding, any vote of the
Revolving Credit Lender:
Actions Described in Section Type of Consent Required
-----------------------------------------------------------------
15-2 Majority Lenders
15-3 Supermajority Lenders
15-4 Unanimous Consent
15-5 Consent of SwingLine Lender
15-6 Consent of Issuer
15-7 Consent of the Administrative Agent
(c) The rights granted to the Revolving Credit Lenders in
those sections referenced in Section 15-1 (b) shall not otherwise limit or
impair the Administrative Agent's exercise of its discretion under the Loan
Documents.
15-2. ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS Except
as otherwise provided in this Agreement, the Consent or direction of the
Majority Lenders is required for any amendment, waiver, or modification of any
Loan Document.
15-3 ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY LENDERS
None of the following may take place except with the Consent of the
Supermajority Lenders:
(a) The increase of the Revolving Credit Ceiling to an
amount in excess of $550,000,000.00 (or such greater amount to which such
Revolving Credit Ceiling has been previously increased in accordance with the
provisions of this Section 15-3(a)).
(b) The increase of the SwingLine Loan Ceiling to an
amount in excess of $30,000,000.00 (or such greater amount to which such
SwingLine Loan Ceiling has been previously increased in accordance with the
provisions of this Section 15-3(b)).
15-4. ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT None of the
following may take place except with the Consent of each Revolving Credit Lender
adversely affected thereby or with Unanimous Consent:
(a) Any increase in any Revolving Credit Lender's
Revolving Credit Commitment or Revolving Credit Commitment Percentage
(other than by reason of the application of Section 15-10 (which deals
with NonConsenting Revolving Credit Lenders) or Section 16-1 (which
deals with assignments and participations)).
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(b) Any decrease in any interest rate or fee payable to
the Revolving Credit Lenders on account of the Revolving Credit Loans.
(c) Any extension of the Maturity Date.
(d) Any forgiveness of all or any portion of any payment
Liability.
(e) Any decrease in any interest rate or fee payable
under any of the Loan Documents (other than any Administrative Agent's
Fee (for which the consent of the Administrative Agent shall also be
required) and of any fee provided for by the Fee Letter (which may be
amended by written agreement between the Lead Borrower on the one hand,
and the Administrative Agent on the other)).
(f) Any release of a material portion of the Collateral
not otherwise required or provided for in the Loan Documents or to
facilitate a Liquidation.
(g) Any amendment of the definition of the terms
"Borrowing Base" or of any definition of any component thereof, such
that more credit would be available to the Borrowers, based on the same
assets, as would have been available to the Borrowers immediately prior
to such amendment, it being understood, however, that:
(i) The foregoing shall not limit the adjustment
by the Administrative Agent of any Reserve in the
Administrative Agent's administration of the Revolving Credit
as otherwise permitted by this Agreement.
(ii) The foregoing shall not prevent the
Administrative Agent, in its administration of the Revolving
Credit, from restoring any component of Borrowing Base which
had been lowered by the Administrative Agent back to the value
of such component, as stated in this Agreement or to an
intermediate value.
(h) Any release of any Person obligated on account of the
Liabilities.
(i) The making of any Revolving Credit Loan which, when
made, exceeds Availability and is not a Permissible OverLoan,
provided, however,
(i) no Consent shall be required in connection
with the making of any Revolving Credit Loan to "cover" any
honoring of a drawing under any L/C; and
(ii) each Lender recognizes that subsequent to
the making of a Revolving Credit Loan which does not
constitute a Permissible OverLoan, the unpaid principal
balance of the Loan Account may exceed Borrowing Base on
account of changed circumstances beyond the control of the
Administrative Agent (such as a drop in collateral value).
(j) The waiver of the obligation of the Borrowers to
reduce the unpaid principal balance of loans under the Revolving Credit
to an amount which does not exceed a Permissible OverLoan or to
eliminate an OverLoan.
(k) Any amendment of this Article 15.
(1) Amendment of any of the following Definitions:
"Appraised Inventory Liquidation Value"
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"Appraised Inventory Percentage"
"Majority Lenders"
"Permissible OverLoan"
"Unanimous Consent"
15-5. ACTIONS REQUIRING SWINGLINE LENDER CONSENT No action,
amendment, or waiver of compliance with, any provision of the Loan Documents or
of this Agreement which affects the SwingLine Lender may be undertaken without
the Consent of the SwingLine Lender.
15-6. ACTIONS REQUIRING ISSUER CONSENT No action, amendment, or
waiver of compliance with, any provision of the Loan Documents or of this
Agreement which affects the Issuer may be undertaken without the Consent of the
Issuer.
15-7. ACTIONS REQUIRING ADMINISTRATIVE AGENT'S CONSENT
(a) No action, amendment, or waiver of compliance with,
any provision of the Loan Documents or of this Agreement which affects the
Administrative Agent in its capacity as Administrative Agent may be undertaken
without the written consent of the Administrative Agent.
(b) No action referenced herein which affects the rights,
duties, obligations, or liabilities of the Administrative Agent shall be
effective without the written consent of the Administrative Agent.
15-8. MISCELLANEOUS ACTIONS
(a) Notwithstanding any other provision of this
Agreement, no single Revolving Credit Lender independently may exercise any
right of action or enforcement against or with respect to any Borrower.
(b) The Administrative Agent shall be fully justified in
failing or refusing to take action under this Agreement or any Loan Document on
behalf of any Revolving Credit Lender unless the Administrative Agent shall
first
(i) receive such clear, unambiguous, written
instructions as the Administrative Agent deems appropriate; and
(ii) be indemnified to the Administrative Agent's
satisfaction by the Revolving Credit Lenders against any and all
liability and expense which may be incurred by the Administrative Agent
by reason of taking or continuing to take any such action, unless such
action had been grossly negligent, in willful misconduct, or in bad
faith.
(c) The Administrative Agent may establish reasonable
procedures for the providing of direction and instructions from the Revolving
Credit Lenders to the Administrative Agent, including its reliance on multiple
counterparts, facsimile transmissions, and time limits within which such
direction and instructions must be received in order to be included in a
determination of whether the requisite Revolving Credit Commitments has provided
its direction, Consent, or instructions.
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15-9. ACTIONS REQUIRING LEAD BORROWER'S CONSENT
(a) The Lead Borrower's consent is required for any
amendment of this Agreement, except that each of the following Articles of this
Agreement may be amended without the consent of the Lead Borrower:
Article Title of Article
------- ----------------
12 Revolving Credit Fundings and Distributions
13 Acceleration and Liquidation
14-1 The Administrative Agent
15 Action By Administrative Agent - Consents - Amendments - Waivers
(other than as provided in Section 15-9(b))
(b) Subject to Section 15-9(c), the Section 15-4
(Unanimous Consent) may not be amended without the consent of the Lead Borrower:
(c) The Lead Borrower's consent to the amendment of those
provisions referenced in Section 15-9(b)
(i) Shall be deemed given unless written
objection is made, within seven (7) Business Days following the
Administrative Agent's giving notice to the Lead Borrower of the
proposed amendment; and
(ii) shall not be required during the existence
of any Event of Default.
15-10. NONCONSENTING REVOLVING CREDIT LENDER
(a) In the event that a Revolving Credit Lender (in this
Section 15-10, a "NONCONSENTING REVOLVING CREDIT LENDER") does not provide its
Consent to a proposal by the Administrative Agent to take action which requires
consent under this Article 15, then subject to the prior consent of the
Administrative Agent, one or more Revolving Credit Lenders who provided Consent
to such action may require the assignment, without recourse and in accordance
with the procedures outlined in Section 16-1, below, of the NonConsenting
Revolving Credit Lender's commitment hereunder on fifteen (15) days written
notice to the Administrative Agent and to the NonConsenting Revolving Credit
Lender.
(b) At the end of such fifteen (15) days, and provided
that the NonConsenting Revolving Credit Lender delivers the Revolving Credit
Note held by the NonConsenting Revolving Credit Lender to the Administrative
Agent, the Revolving Credit Lenders who have given such written notice shall
Transfer the following to the NonConsenting Revolving Credit Lender:
(i) Such NonConsenting Revolving Credit Lender's
Pro-Rata share of the principal and interest of the Revolving Credit
Loans to the date of such assignment.
(ii) All fees distributable hereunder to the
NonConsenting Revolving Credit Lender to the date of such assignment.
(iii) Any out-of-pocket costs and expenses for
which the NonConsenting Revolving Credit Lender is entitled to
reimbursement from the Borrowers.
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(c) In the event that the NonConsenting Revolving Credit
Lender fails to deliver to the Administrative Agent the Revolving Credit Note
held by the NonConsenting Revolving Credit Lender as provided in Section
15-10(b), then:
(i) The amount otherwise to be Transferred to
the NonConsenting Revolving Credit Lender shall be Transferred to the
Administrative Agent and held by the Administrative Agent, without
interest, to be turned over to the NonConsenting Revolving Credit
Lender upon delivery of the Revolving Credit Note held by that
NonConsenting Revolving Credit Lender.
(ii) The Revolving Credit Note held by the
NonConsenting Revolving Credit Lender shall have no force or effect
whatsoever.
(iii) The NonConsenting Revolving Credit Lender
shall cease to be a "Revolving Credit Lender".
(iv) The Revolving Credit Lender(s) which have
Transferred the amount to the Administrative Agent as described above
shall have succeeded to all rights and become subject to all of the
obligations of the NonConsenting Revolving Credit Lender as "Revolving
Credit Lender".
(d) In the event that more than one (1) Revolving Credit
Lender wishes to require such assignment, the NonConsenting Revolving Credit
Lender's commitment hereunder shall be divided among such Revolving Credit
Lenders, pro-rata based upon their respective Revolving Credit Commitment
Percentages, with the Administrative Agent coordinating such transaction.
(e) The Administrative Agent shall coordinate the
retirement of the Revolving Credit Note held by the NonConsenting Revolving
Credit Lender and the issuance of Revolving Credit Notes to those Revolving
Credit Lenders which "take-out" such NonConsenting Revolving Credit Lender,
provided, however, no processing fee otherwise to be paid as provided in Section
16-2(b) shall be due under such circumstances.
ARTICLE 16 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS :
16-1. ASSIGNMENTS AND ASSUMPTIONS:
(a) Except as provided herein, each Revolving Credit
Lender (in this Section 16-l(a), an "ASSIGNING REVOLVING CREDIT LENDER") may
assign to one or more Eligible Assignees (in this Section 16-1(a), each an
"ASSIGNEE REVOLVING CREDIT LENDER") all or a portion of that Revolving Credit
Lender's interests, rights and obligations under this Agreement and the Loan
Documents (including all or a portion of its Commitment) and the same portion of
the Revolving Credit Loans at the time owing to it, and of the Revolving Credit
Note held by the Assigning Revolving Credit Lender, provided that:
(i) The Administrative Agent (and if no Event of
Default then exists, the Lead Borrower) shall have given its prior
written consent to such assignment, which consent shall not be
unreasonably withheld, but need not be given if the proposed assignment
would result in any resulting Revolving Credit Lender's having a Dollar
Commitment of less than the "minimum hold" amount specified in Section
16-l(a)(iii), provided that. any assignment complying with all other
terms of this Article 16 to a Person then a Revolving Credit Lender
shall not be subject to the prior consent of the Administrative Agent
or the Lead Borrower.
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(ii) Each such assignment shall be of a constant,
and not a varying, percentage of all the Assigning Revolving Credit
Lender's rights and obligations under this Agreement.
(iii) Following the effectiveness of such
assignment, the Assigning Revolving Credit Lender's Dollar Commitment
(if not an assignment of all of the Assigning Revolving Credit Lender's
Commitment) shall not be less than $10,000,000.
16-2. ASSIGNMENT PROCEDURES. (This Section 16-2 describes the
procedures to be followed in connection with an assignment effected pursuant to
this Article 16 and permitted by Section 16-1).
(a) The parties to such an assignment shall execute and
deliver to the Administrative Agent, for recording in the Register, an
Assignment and Acceptance substantially in the form of EXHIBIT 16-1, annexed
hereto.
(b) The Assigning Revolving Credit Lender shall deliver
to the Administrative Agent, with such Assignment and Acceptance, the Revolving
Credit Note held by the subject Assigning Revolving Credit Lender and the
Administrative Agent's processing fee of $3,500.00, provided, however, no such
processing fee shall be due where the Assigning Revolving Credit Lender is one
of the Revolving Credit Lenders at the initial execution of this Agreement.
(c) The Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to it and a register or similar list
(the "REGISTER") for the recordation of the names and addresses of the Revolving
Credit Lenders and of the Revolving Credit Commitment Percentage and Revolving
Credit Commitment Percentage of each Revolving Credit Lender. The Register shall
be available for inspection by the Revolving Credit Lenders at any reasonable
time and from time to time upon reasonable prior notice. In the absence of
manifest error, the entries in the Register shall be conclusive and binding on
all Revolving Credit Lenders. The Administrative Agent and the Revolving Credit
Lenders may treat each Person whose name is recorded in the Register as a
"Revolving Credit Lender" hereunder for all purposes of this Agreement.
(d) The Assigning Revolving Credit Lender and Assignee
Revolving Credit Lender, directly between themselves, shall make all appropriate
adjustments in payments for periods prior to the effective date of an Assignment
and Assumption.
16-3. EFFECT OF ASSIGNMENT.
(a) From and after the effective date specified in an
Assignment and Acceptance which has been executed, delivered, and recorded
(which effective date the Administrative Agent may delay by up to five (5)
Business Days after the delivery of such Assignment and Acceptance):
(i) The Assignee Revolving Credit Lender:
(A) Shall be a party to this Agreement
and the Loan Documents (and to any amendments thereof) as
fully as if the Assignee Revolving Credit Lender had executed
each.
(B) Shall have the rights of a
Revolving Credit Lender hereunder to the extent of the
Revolving Credit Commitment Percentage and Revolving Credit
Commitment Percentage assigned by such Assignment and
Acceptance.
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(ii) The Assigning Revolving Credit Lender shall
be released from the Assigning Revolving Credit Lender's obligations
under this Agreement and the Loan Documents to the extent of the
Commitment assigned by such Assignment and Acceptance.
(iii) The Administrative Agent shall undertake to
obtain and distribute replacement Revolving Credit Notes to the subject
Assigning Revolving Credit Lender and Assignee Revolving Credit Lender.
(b) By executing and delivering an Assignment and
Acceptance, the parties thereto confirm to and agree with each other and with
all parties to this Agreement as to those matters which are set forth in the
subject Assignment and Acceptance.
ARTICLE 17 - NOTICES:
17-1. NOTICE ADDRESSES. All notices, demands, and other
communications made in respect of any Loan Document (other than a request for a
loan or advance or other financial accommodation under the Revolving Credit)
shall be made to the following addresses, each of which may be changed upon
seven (7) days written notice to all others given by certified mail, return
receipt requested:
If to the Administrative Agent:
Fleet Retail Finance Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇ ▇. ▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Fax : 617880-3456
If to the Lead Borrower
And All Borrowers:
OfficeMax, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax :
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With a copy to:
OfficeMax, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention : General Counsel
Fax :
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention : ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: : (▇▇▇) ▇▇▇-▇▇▇▇
17-2. NOTICE GIVEN.
(a) Except as otherwise specifically provided herein,
notices shall be deemed made and correspondence received, as follows (all times
being local to the place of delivery or receipt):
(i) By mail: the sooner of when actually
received or three (3) days following deposit in the United States mail,
postage prepaid.
(ii) By recognized overnight express delivery:
the Business Day following the day when sent.
(iii) By Hand: If delivered on a Business Day
after 9:00 AM and no later than three (3) hours prior to the close of
customary business hours of the recipient, when delivered. Otherwise,
at the opening of the then next Business Day.
(iv) By Facsimile transmission (which must
include a header on which the party sending such transmission is
indicated): If sent on a Business Day after 9:00 AM and no later than
three (3) hours prior to the close of customary business hours of the
recipient, one (1) hour after being sent. Otherwise, at the opening of
the then next Business Day.
(b) Rejection or refusal to accept delivery and inability
to deliver because of a changed address or facsimile number for which no due
notice was given shall each be deemed receipt of the notice sent.
ARTICLE 18 - TERM:
18-1. TERMINATION OF REVOLVING CREDIT. The Revolving Credit shall
remain in effect (subject to suspension as provided in Section 2-5(g) hereof)
until the Termination Date.
18-2. ACTIONS ON TERMINATION.
(a) On the Termination Date, the Borrowers shall pay the
Administrative Agent (whether or not then due), in immediately available funds,
all Liabilities then due and owing, including, without limitation: the
following:
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(i) The entire balance of the Loan Account
(including the unpaid principal balance of the Revolving Credit Loans,
and the SwingLine Loan ).
(ii) Any then remaining installments of the
Administrative Agent's Fee.
(iii) Any payments due on account of the
indemnification obligations included in Section 2-10(f).
(iv) Any accrued and unpaid Unused Fee.
(v) All unreimbursed costs and expenses of the
Administrative Agent and of Lenders' Special Counsel for which each
Borrower is responsible.
(b) On the Termination Date, the Borrowers shall also
shall make such arrangements concerning any L/Cs then outstanding as are
reasonably satisfactory to the Administrative Agent.
(c) Until such payment (Section 18-2(a)) and arrangements
concerning L/Cs (Section 18-2(b)), all provisions of this Agreement, other than
those included in Article 2 which place any obligation on the Administrative
Agent or any Revolving Credit Lender to make any loans or advances or to provide
any financial accommodations to any Borrower shall remain in full force and
effect until all Liabilities shall have been paid in full.
(d) The release by the Administrative Agent of the
Collateral Interests granted the Administrative Agent by the Borrowers hereunder
may be upon such conditions and indemnifications as the Administrative Agent may
reasonably require.
ARTICLE 19 - GENERAL:
19-1. PROTECTION OF COLLATERAL. The Administrative Agent has no duty
as to the collection or protection of the Collateral beyond the safe custody of
such of the Collateral as may come into the possession of the Administrative
Agent.
19-2. PUBLICITY. The Administrative Agent may issue a "tombstone"
notice of the establishment of the credit facility contemplated by this
Agreement and may make reference to each Borrower (and may utilize any logo or
other distinctive symbol associated with each Borrower with the Borrower's
consent, which will not be unreasonably withheld) in connection with any
advertising, promotion, or marketing undertaken by the Administrative Agent.
19-3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Borrowers and their respective representatives, successors, and assigns and
shall enure to the benefit of the Administrative Agent and each Revolving Credit
Lender and their respective successors and permitted assigns, provided, however,
no trustee or other fiduciary appointed with respect to any Borrower shall have
any rights hereunder, and provided further that no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder. In the event that
the Administrative Agent or any Revolving Credit Lender assigns or transfers its
rights under this Agreement, the assignee shall thereupon succeed to and become
vested with all rights, powers, privileges, and duties of such assignor
hereunder and such assignor shall thereupon be discharged and relieved from its
duties and obligations hereunder.
19-4. SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.
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19-5. AMENDMENTS. COURSE OF DEALING.
(a) This Agreement and the other Loan Documents
incorporate all discussions and negotiations between each Borrower and the
Administrative Agent and each Revolving Credit Lender, either express or
implied, concerning the matters included herein and in such other instruments,
any custom, usage, or course of dealings to the contrary notwithstanding. No
such discussions, negotiations, custom, usage, or course of dealings shall
limit, modify, or otherwise affect the provisions thereof. No failure by the
Administrative Agent or any Revolving Credit Lender to give notice to the Lead
Borrower of any Borrower's having failed to observe and comply with any warranty
or covenant included in any Loan Document shall constitute a waiver of such
warranty or covenant or the amendment of the subject Loan Document.
(b) Each Borrower may undertake any action otherwise
prohibited hereby, and may omit to take any action otherwise required hereby,
upon and with the express prior written consent of the Administrative Agent.
Subject to Article 15, no consent, modification, amendment, or waiver of any
provision of any Loan Document shall be effective unless executed in writing by
or on behalf of the party to be charged with such modification, amendment, or
waiver (and if such party is the Administrative Agent then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the
Administrative Agent shall be in reliance upon all representations and
warranties theretofore made to the Administrative Agent by or on behalf of the
Borrowers (and any guarantor, endorser, or surety of the Liabilities) and
consequently may be rescinded in the event that any of such representations or
warranties was not true and complete in all material respects when given.
(c) Each reference in the Loan Documents to the exercise
of discretion or the like by the Administrative Agent or any Revolving Credit
Lender shall be to such Person's exercise of its judgment, in good faith, based
upon such Person's consideration of any such factors as the Administrative Agent
or that Revolving Credit Lender, determines as having a material bearing on
credit risks associated with the providing of Revolving Credit Loans and
financial accommodations to the Borrowers, taking into account information of
which that Person then has actual knowledge. The burden of establishing the
failure of the Administrative Agent or any Revolving Credit Lender to have acted
in a reasonable manner in such Person's exercise of such discretion shall be the
Borrowers'.
19-6. POWER OF ATTORNEY. In connection with all powers of attorney
included in this Agreement, each Borrower hereby grants unto the Administrative
Agent (acting through any of its officers) full power to do any and all things
necessary or appropriate during the existence of an Event of Default in
connection with the exercise of such powers as fully and effectually as that
Borrower might or could do, hereby ratifying all that said attorney shall do or
cause to be done by virtue of this Agreement. No power of attorney set forth in
this Agreement shall be affected by any disability or incapacity suffered by any
Borrower and each shall survive the same. All powers conferred upon the
Administrative Agent by this Agreement, being coupled with an interest, shall be
irrevocable until this Agreement is terminated by a written instrument executed
by a duly authorized officer of the Administrative Agent.
19-7. APPLICATION OF PROCEEDS. The proceeds of any collection, sale,
or disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the
Administrative Agent determines in its sole discretion, consistent, however,
with Sections 13-6 and 13-7 and any other applicable provisions of this
Agreement. The Borrowers shall remain liable for any deficiency remaining
following such application.
19-8. INCREASED COSTS. If, as a result of any change in any
Requirement of Law, or of the interpretation or application thereof by any court
or by any governmental or other authority or entity charged with the
administration thereof, whether or not having the force of law, which:
89
(a) subjects any Revolving Credit Lender to any taxes or
changes the basis of taxation, or increases any existing taxes, on
payments of principal, interest or other amounts payable by any
Borrower to the Administrative Agent or any Revolving Credit Lender
under this Agreement (except for taxes on the Administrative Agent or
any Revolving Credit Lender based on net income or capital imposed by
the jurisdiction in which the principal or lending offices of the
Administrative Agent or that Revolving Credit Lender are located);
(b) imposes, modifies or deems applicable any reserve,
cash margin, special deposit or similar requirements against assets
held by, or deposits in or for the account of or loans by or any other
acquisition of funds by the relevant funding office of any Revolving
Credit Lender;
(c). imposes on any Revolving Credit Lender any other
condition with respect to any Loan Document; or
(d) imposes on any Revolving Credit Lender a requirement
to maintain or allocate capital in relation to the Liabilities;
and the result of any of the foregoing, in such Revolving Credit Lender's
reasonable opinion, is to increase the cost to that Revolving Credit Lender of
making or maintaining any loan, advance or financial accommodation or to reduce
the income receivable by that Revolving Credit Lender in respect of any loan,
advance or financial accommodation by an amount which that Revolving Credit
Lender deems to be material, then upon written notice from the Administrative
Agent, from time to time, to the Lead Borrower (such notice to set out in
reasonable detail the facts giving rise to and a summary calculation of such
increased cost or reduced income), the Borrowers shall forthwith pay to the
Administrative Agent, for the benefit of the subject Revolving Credit Lender,
within thirty (30) days after receipt of such notice, that amount which shall
compensate the subject Revolving Credit Lender for such additional cost or
reduction in income.
19-9. COSTS AND EXPENSES OF THE ADMINISTRATIVE AGENT .
(a) The Borrowers shall pay from time to time on demand
all Costs of Collection and all reasonable costs, expenses, and disbursements
(including reasonable attorneys' fees and expenses) which are incurred by the
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement and of any other Loan Documents, and all other
reasonable costs, expenses, and disbursements which may be incurred connection
with or in respect to the credit facility contemplated hereby or which otherwise
are incurred with respect to the Liabilities.
(b) The Borrowers shall pay from time to time on demand
all reasonable costs and expenses (including reasonable attorneys' fees and
expenses) incurred, during the existence of any Event of Default, by the
Revolving Credit Lenders to Lenders' Special Counsel.
(c) Each Borrower authorizes the Administrative Agent to
pay all such fees and expenses and in the Administrative Agent's discretion, to
add such fees and expenses to the Loan Account.
(d) The undertaking on the part of each Borrower in this
Section 19-9 shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by the Administrative Agent in favor of any
Borrower, other than a termination, release, or discharge which makes specific
reference to this Section 19-9.
19-10. COPIES AND FACSIMILES. Each Loan Document and all documents
and papers which relates thereto which have been or may be hereinafter furnished
the Administrative Agent or any
90
Revolving Credit Lender may be reproduced by that Revolving Credit Lender or by
the Administrative Agent by any photographic, microfilm, xerographic, digital
imaging, or other process, and such Person making such reproduction may destroy
any document so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business). Any facsimile which
bears proof of transmission shall be binding on the party which or on whose
behalf such transmission was initiated and likewise shall be so admissible in
evidence as if the original of such facsimile had been delivered to the party
which or on whose behalf such transmission was received.
19-11. MASSACHUSETTS LAW. This Agreement and all rights and
obligations hereunder, including matters of construction, validity, and
performance, shall be governed by the law of The Commonwealth of Massachusetts.
19-12. CONSENT TO JURISDICTION.
(a) Each Borrower agrees that any legal action,
proceeding, case, or controversy against any Borrower with respect to any Loan
Document may be brought in the Superior Court of Suffolk County Massachusetts or
in the United States District Court, District of Massachusetts, sitting in
Boston, Massachusetts, as the Administrative Agent may elect in the
Administrative Agent's sole discretion. By execution and delivery of this
Agreement, each Borrower, for itself and in respect of its property, accepts,
submits, and consents generally and unconditionally, to the jurisdiction of the
aforesaid courts.
(b) Each Borrower WAIVES personal service of any and all
process upon it, and irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by certified mail, postage prepaid, to the Lead Borrower at the
Lead Borrower's address for notices as specified herein, such service to become
effective five (5) Business Days after such mailing.
(c) Each Borrower WAIVES any objection based on forum non
conveniens and any objection to venue of any action or proceeding instituted
under any of the Loan Documents and consents to the granting of such legal or
equitable remedy as is deemed appropriate by the Court.
(d) Nothing herein shall affect the right of the
Administrative Agent to bring legal actions or proceedings in any other
competent jurisdiction.
(e) Each Borrower agrees that any action commenced by any
Borrower asserting any claim arising under or in connection with this Agreement
or any other Loan Document shall be brought solely in the Superior Court of
Suffolk County Massachusetts or in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, and that such Courts shall have
exclusive jurisdiction with respect to any such action.
19-13. INDEMNIFICATION. Each Borrower shall indemnify, defend, and
hold the Administrative Agent and each Revolving Credit Lender and any
Participant and any of their respective employees, officers, or agents (each, an
"INDEMNIFIED PERSON") harmless of and from any claim brought or threatened
against any Indemnified Person by any Borrower, any guarantor or endorser of the
Liabilities, or any other Person (as well as from reasonable attorneys' fees,
expenses, and disbursements in connection therewith) on account of the
relationship of the Borrowers or of any other guarantor or endorser of the
Liabilities, including all costs, expenses, liabilities, and damages as may be
suffered by any Indemnified Person in connection with (x) the Collateral; (y)
the occurrence of any Event of Default; or (z) the exercise of any rights or
remedies under any of the Loan Documents (each of claims which may be defended,
compromised, settled, or pursued by the Indemnified Person with
91
counsel of the Lender's selection, but at the expense of the Borrowers) other
than any claim as to which a final determination is made in a judicial
proceeding (in which the Administrative Agent and any other Indemnified Person
has had an opportunity to be heard), which determination includes a specific
finding that the Indemnified Person seeking indemnification had acted in a
grossly negligent manner or in actual bad faith. This indemnification shall
survive payment of the Liabilities and/or any termination, release, or discharge
executed by the Administrative Agent in favor of the Borrowers, other than a
termination, release, or discharge duly executed on behalf of the Administrative
Agent which makes specific reference to this Section 19-13.
19-14. RULES OF CONSTRUCTION. The following rules of construction
shall be applied in the interpretation, construction, and enforcement of this
Agreement and of the other Loan Documents:
(a) Words in the singular include the plural and words in
the plural include the singular.
(b) Titles, headings (indicated by being underlined or
shown in SMALL CAPITALS) and any Table of Contents are solely for convenience of
reference; do not constitute a part of the instrument in which included; and do
not affect such instrument's meaning, construction, or effect.
(c) The words "includes" and "including" are not
limiting.
(d) Text which follows the words "including, without
limitation" (or similar words) is illustrative and not limitational.
(e) Text which is shown in italics (except for
parenthesized italicized text), shown in BOLD, shown IN ALL CAPITAL LETTERS, or
in any combination of the foregoing, shall be deemed to be conspicuous.
(f) The words "may not" are prohibitive and not
permissive.
(g) Any reference to a Person's "knowledge" (or words of
similar import) are to such Person's knowledge assuming that such Person has
undertaken reasonable and diligent investigation with respect to the subject of
such "knowledge" (whether or not such investigation has actually been
undertaken).
(h) Terms which are defined in one section of any Loan
Document are used with such definition throughout the instrument in which so
defined.
(i) The symbol "$" refers to United States Dollars.
(j) Unless limited by reference to a particular Section
or provision, any reference to "herein", "hereof, or "within" is to the entire
Loan Document in which such reference is made.
(k) References to "this Agreement" or to any other Loan
Document is to the subject instrument as amended to the date on which
application of such reference is being made.
(1) Except as otherwise specifically provided, all
references to time are to Boston time.
(m) In the determination of any notice, grace, or other
period of time prescribed or allowed hereunder:
92
(i) Unless otherwise provided (A) the day of the
act, event, or default from which the designated period of time begins
to run shall not be included and the last day of the period so computed
shall be included unless such last day is not a Business Day, in which
event the last day of the relevant period shall be the then next
Business Day and (B) the period so computed shall end at 5:00 PM on the
relevant Business Day.
(ii) The word "from" means "from and including".
(iii) The words "to" and "until" each mean "to,
but excluding".
(iv) The word "through" means "to and including".
(n) The Loan Documents shall be construed and interpreted
in a harmonious manner and in keeping with the intentions set forth in Section
19-15 hereof, provided, however, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.
19-15. INTENT. It is intended that:
(a) This Agreement take effect as a sealed instrument.
(b) The scope of all Collateral Interests created by any
Borrower to secure the Liabilities be broadly construed in favor of the
Administrative Agent.
(c) All Collateral Interests created in favor of the
Administrative Agent at any time and from time to time by any any
secure all Liabilities, whether now existing or contemplated or
hereafter arising.
(d) All reasonable costs, expenses, and disbursements
incurred by the Administrative Agent and, to the extent provide in
Section 19-9 each Revolving Credit Lender, in connection with such
Person's relationship(s) with any Borrower shall be borne by the
Borrowers.
(e) Unless otherwise explicitly provided herein, the
Administrative Agent's consent to any action of any Borrower which is
prohibited unless such consent is given may be given or refused by the
Administrative Agent in its sole discretion.
19-16. PARTICIPATIONS: Each Revolving Credit Lender may sell
participations to one or more financial institutions (each, a "PARTICIPANT") in
that Revolving Credit Lender's interests herein provided that no such
participation shall include any provision which accords that Participant with
any rights, vis a vis the Administrative Agent, with respect to any requirement
herein for approval by a requisite number or proportion of the Revolving Credit
Lenders. No such sale of a participation shall relieve a Revolving Credit Lender
from that Revolving Credit Lender's obligations hereunder nor obligate the
Administrative Agent to any Person other than a Revolving Credit Lender.
19-17. RIGHT OF SET-OFF. Any and all deposits or other sums at any
time credited by or due to any Borrower from the Administrative Agent or any
Revolving Credit Lender or any Participant or from any Affiliate of any of the
foregoing, and any cash, securities, instruments or other property of any
Borrower in the possession of any of the foregoing, whether for safekeeping or
otherwise (regardless of the reason such Person had received the same) shall at
all times constitute security for all Liabilities and for any and all
obligations of each Borrower to the Administrative Agent and such Revolving
Credit Lender or any Participant or such Affiliate and may be applied or set off
against the Liabilities and against such obligations at any time an Event of
Default exists, whether or not such are
93
then due and whether or not other collateral is then available to the
Administrative Agent or that Revolving Credit Lender.
19-18. PLEDGES TO FEDERAL RESERVE BANKS: Nothing included in this
Agreement shall prevent or limit any Revolving Credit Lender, to the extent that
such Revolving Credit Lender is subject to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act (12 U.S.C. Section
341) from pledging all or any portion of that Lender's interest and rights under
this Agreement, provided, however, neither such pledge nor the enforcement
thereof shall release the pledging Revolving Credit Lender from any of its
obligations hereunder or under any of the Loan Documents.
19-19. MAXIMUM INTEREST RATE. Regardless of any provision of any Loan
Document, neither the Administrative Agent nor any Revolving Credit Lender shall
be entitled to contract for, charge, receive, collect, or apply as interest on
any Liability, any amount in excess of the maximum rate imposed by Applicable
Law. Any payment which is made which, if treated as interest on a Liability
would result in such interest's exceeding such maximum rate shall be held, to
the extent of such excess, as additional collateral for the Liabilities as if
such excess were "Collateral."
19-20. WAIVERS.
(a) The Borrowers make each of the waivers included in
Section 19-20(b), below, knowingly, voluntarily, and intentionally, and
understands that Administrative Agent and each Revolving Credit Lender, in
establishing the facilities contemplated hereby and in providing loans and other
financial accommodations to or for the account of the Borrowers as provided
herein, whether not or in the future, is relying on such waivers.
(b) EACH BORROWER RESPECTIVELY WAIVES THE FOLLOWING:
(i) Except as otherwise specifically required
hereby, notice of non-payment, demand, presentment, protest and all
forms of demand and notice, both with respect to the Liabilities and
the Collateral.
(ii) Except as otherwise specifically required
hereby, the right to notice and/or hearing prior to the Administrative
Agent's exercising of the Administrative Agent's rights upon default.
(iii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE
OR CONTROVERSY IN WHICH THE ADMINISTRATIVE AGENT OR ANY REVOLVING
CREDIT LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY
IS INITIATED BY OR AGAINST THE ADMINISTRATIVE AGENT OR ANY REVOLVING
CREDIT LENDER OR IN WHICH THE ADMINISTRATIVE AGENT OR ANY REVOLVING
CREDIT LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY
ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN
ANY BORROWER OR ANY OTHER PERSON AND THE ADMINISTRATIVE AGENT OR ANY
REVOLVING CREDIT LENDER (EACH OF WHOM LIKEWISE WAIVES THE RIGHT TO A
JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY). THE ADMINISTRATIVE
AGENT AND THE REVOLVING CREDIT LENDERS LIKEWISE WAIVE ANY SUCH RIGHT TO
A JURY.
(iv) The benefits or availability of any stay,
limitation, hindrance, delay, or restriction (including, without
limitation, any automatic stay which otherwise might be imposed
94
pursuant to Section 362 of the Bankruptcy Code) with respect to any
action which the Administrative Agent may or may become entitled to
take hereunder.
(v) Any defense, counterclaim, set-off,
recoupment, or other basis on which the amount of any Liability, as
stated on the books and records of the Administrative Agent, could be
reduced or claimed to be paid otherwise than in accordance with the
tenor of and written terms of such Liability.
(vi) Any claim to consequential, special, or
punitive damages.
19-21 ADDITIONAL WAIVERS.
(a) The Liabilities are the joint and several obligations
of each Borrower. To the fullest extent permitted by applicable law, the
obligations of each Borrower hereunder shall not be affected by (i) the failure
of the Administrative Agent or any Revolving Credit Lender to assert any claim
or demand or to enforce or exercise any right or remedy against any other
Borrower under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan
Document, or any other agreement, including with respect to any other Borrower
of the Liabilities under this Agreement, or (iii) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of the Administrative Agent.
(b) The obligations of each Borrower hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason (other than the indefeasible payment in full in cash of the Liabilities),
including any claim of waiver, release, surrender, alteration or compromise of
any of the Liabilities, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Liabilities or otherwise. Without limiting
the generality of the foregoing, the obligations of each Borrower hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Revolving Credit Lender to assert any claim or
demand or to enforce any remedy under this Agreement, any other Loan Document or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Liabilities, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Borrower or that would
otherwise operate as a discharge of any Borrower as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Liabilities).
(c) To the fullest extent permitted by applicable law,
each Borrower waives any defense based on or arising out of any defense of any
other Borrower or the unenforceability of the Liabilities or any part thereof
from any cause, or the cessation from any cause of the liability of any other
Borrower, other than the indefeasible payment in full in cash of all the
Liabilities. The Administrative Agent may, at its election, foreclose on any
security held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Liabilities, make any other accommodation with any other Borrower,
or exercise any other right or remedy available to them against any other
Borrower, without affecting or impairing in any way the liability of any
Borrower hereunder except to the extent that all the Liabilities have been
indefeasibly paid in full in cash. Pursuant to applicable law, each Borrower
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Borrower against
any other Borrower, as the case may be, or any security.
(d) Upon payment by any Borrower of any Liabilities, all
rights of such Borrower against any other Borrower arising as a result thereof
by way of right of subrogation, contribution, reimbursement, indemnity or
otherwise shall in all respects be subordinate and junior in right of payment
95
to the prior indefeasible payment in full in cash of all the Liabilities. In
addition, any indebtedness of any Borrower now or hereafter held by any other
Borrower is hereby subordinated in right of payment to the prior payment in full
of the Liabilities. None of the Borrowers will demand, ▇▇▇ for, or otherwise
attempt to collect any such indebtedness. If any amount shall erroneously be
paid to any Borrower on account of (a) such subrogation, contribution,
reimbursement, indemnity or similar right or (b) any such indebtedness of any
Borrower, such amount shall be held in trust for the benefit of the
Administrative Agent and the Revolving Credit Lenders and shall forthwith be
paid to the Administrative Agent to be credited against the payment of the
Liabilities, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
19-22. CONFIDENTIALITY. The Administrative Agent and the Revolving
Credit Lenders agree to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to their and their
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrowers or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any
Revolving Credit Lender on a nonconfidential basis from a source other than the
Borrowers. For the purposes of this Section, the term "Information" means all
information received from the Borrowers relating to their businesses, other than
any such information that is available to the Administrative Agent or any
Revolving Credit Lender on a nonconfidential basis prior to disclosure by the
Borrowers. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
OFFICEMAX, INC.
("LEAD BORROWER")
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
and Chief Financial Officer
"BORROWERS":
OFFICEMAX, INC.
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
and Chief Financial Officer
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BIZMART, INC.
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
BIZMART (TEXAS), INC.
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
OFFICEMAX CORP.
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
OMX, INC.
By________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Executive Vice President
FLEET RETAIL FINANCE INC.
("ADMINISTRATIVE AGENT")
By________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
97
The "REVOLVING CREDIT LENDERS AND OTHER AGENTS"
FLEET RETAIL FINANCE INC.
By________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
JPMORGAN CHASE BANK, as Co-
Agent and Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
JPMORGAN BUSINESS CREDIT
CORPORATION, as Co-Agent
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
98
CONGRESS FINANCIAL
CORPORATION
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
FOOTHILL CAPITAL
CORPORATION
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
99
GENERAL ELECTRIC CAPITAL
CORPORATION
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
GMAC COMMERCIAL FINANCE,
LLC, as Documentation Agent and
Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
WHITEHALL RETAIL FINANCE, a
division of Whitehall Business credit
Corporation, as Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
100
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
THE CIT GROUP/BUSINESS
CREDIT, INC., As Syndication Agent
and Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
LASALLE RETAIL FINANCE, a
division of LASALLE BUSINESS
CREDIT, LLC, as agent for Standard
Federal Bank National Association, as
Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
ORIX FINANCIAL SERVICES,
INC., as Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
101
SIEMENS FINANCIAL SERVICES,
INC., as Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
PNC BANK, N.A., as Revolving
Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
PROVIDENT BANK, as Revolving
Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
TRANSAMERICA BUSINESS
CAPITAL CORPORATION, as
Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
UPS CAPITAL CORPORATION, as
Revolving Credit Lender
By________________________________________
Print Name:_______________________________________
Title:_______________________________________
102
