EXECUTION COPY
EXHIBIT 10 O
CREDIT AGREEMENT
among
OXFORD INDUSTRIES, INC.
and certain of its Subsidiaries party hereto as Borrowers,
The Subsidiaries of the Borrowers party hereto as Guarantors,
The financial institutions party hereto as Lenders,
The financial institutions party hereto as Issuing ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL (a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial
Services Inc.), as Syndication Agent,
and
SUNTRUST BANK, as Administrative Agent
SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (a division of SunTrust Capital Markets, Inc.)
AND ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL (a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial
Services Inc.), as Joint Lead Arrangers,
THE CIT GROUP/COMMERCIAL SERVICES, INC., as Co-Syndication Agent,
JPMORGAN CHASE BANK and GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agents
June 13, 2003
EXECUTION COPY
INDEX
PAGE
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ARTICLE 1. DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER INTERPRETIVE MATTERS............ 1
Section 1.1 Definitions............................................................ 1
Section 1.2 Accounting Principles.................................................. 32
Section 1.3 Other Interpretive Matters............................................. 32
ARTICLE 2. THE LOANS AND THE LETTERS OF CREDIT.......................................... 32
Section 2.1 Extension of Credit.................................................... 32
Section 2.2 Manner of Borrowing and Disbursement of Loans.......................... 35
Section 2.3 Interest............................................................... 39
Section 2.4 Fees................................................................... 41
Section 2.5 Prepayment/Reduction of Commitment..................................... 43
Section 2.6 Repayment.............................................................. 44
Section 2.7 Revolving Loan Notes; Loan Accounts.................................... 45
Section 2.8 Manner of Payment...................................................... 46
Section 2.9 Reimbursement.......................................................... 49
Section 2.10 Pro Rata Treatment..................................................... 50
Section 2.11 Application of Payments................................................ 50
Section 2.12 Use of Proceeds........................................................ 51
Section 2.13 All Obligations to Constitute One Obligation........................... 51
Section 2.14 Maximum Rate of Interest............................................... 52
Section 2.15 Letters of Credit...................................................... 52
Section 2.16 Bank Products.......................................................... 58
ARTICLE 3. GUARANTY..................................................................... 59
Section 3.1 Guaranty............................................................... 59
ARTICLE 4. CONDITIONS PRECEDENT......................................................... 64
Section 4.1 Conditions Precedent to Initial Advance................................ 64
Section 4.2 Conditions Precedent to Each Advance................................... 70
Section 4.3 Conditions Precedent to Each Letter of Credit.......................... 71
Section 4.4 Conditions Subsequent.................................................. 72
ARTICLE 5. REPRESENTATIONS AND WARRANTIES............................................... 73
Section 5.1 General Representations and Warranties................................. 73
Section 5.2 Representations and Warranties Relating to Accounts.................... 82
Section 5.3 Representations and Warranties Relating to Inventory................... 82
Section 5.4 Survival of Representations and Warranties, etc........................ 82
ARTICLE 6. GENERAL COVENANTS............................................................ 83
Section 6.1 Preservation of Existence and Similar Matters.......................... 83
Section 6.2 Compliance with Applicable Law......................................... 83
Section 6.3 Maintenance of Properties.............................................. 83
Section 6.4 Accounting Methods and Financial Records............................... 83
Section 6.5 Insurance.............................................................. 83
Section 6.6 Payment of Taxes and Claims............................................ 84
Section 6.7 Visits and Inspections................................................. 84
Section 6.8 Conduct of Business.................................................... 85
Section 6.9 ERISA.................................................................. 85
Section 6.10 Lien Perfection........................................................ 85
Section 6.11 Location of Collateral................................................. 86
Section 6.12 Protection of Collateral............................................... 86
Section 6.13 Assignments and Records of Accounts.................................... 87
Section 6.14 Administration of Accounts............................................. 87
Section 6.15 The Blocked Account.................................................... 88
Section 6.16 Further Assurances..................................................... 90
Section 6.17 Broker's Claims........................................................ 91
Section 6.18 Indemnity.............................................................. 91
Section 6.19 Environmental Matters.................................................. 91
Section 6.20 Key Man Life Insurance................................................. 93
Section 6.21 Formation of Subsidiaries.............................................. 93
Section 6.22 Oxford Receivables Company............................................. 94
ARTICLE 7. INFORMATION COVENANTS........................................................ 94
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Section 7.1 Monthly and Quarterly Financial Statements and Information............. 94
Section 7.2 Annual Financial Statements and Information; Certificate of No Default. 95
Section 7.3 Performance Certificates............................................... 96
Section 7.4 Access to Accountants.................................................. 96
Section 7.5 Additional Reports..................................................... 96
Section 7.6 Notice of Litigation and Other Matters................................. 98
ARTICLE 8. NEGATIVE COVENANTS........................................................... 100
Section 8.1 Indebtedness........................................................... 100
Section 8.2 Guaranties............................................................. 101
Section 8.3 Liens.................................................................. 101
Section 8.4 Restricted Payments and Purchases...................................... 102
Section 8.5 Investments............................................................ 102
Section 8.6 Affiliate Transactions................................................. 103
Section 8.7 Liquidation; Change in Ownership, Name, or Year; Disposition or
Acquisition of Assets; Etc............................................. 103
Section 8.8 Ratio of Total Debt to EBITDA.......................................... 105
Section 8.9 Fixed Charge Coverage Ratio............................................ 106
Section 8.10 Capital Expenditures................................................... 106
Section 8.11 Limitation on Leases................................................... 106
Section 8.12 Sales and Leasebacks................................................... 107
Section 8.13 Amendment and Waiver................................................... 107
Section 8.14 ERISA Liability........................................................ 107
Section 8.15 Prepayments............................................................ 108
Section 8.16 Negative Pledge........................................................ 108
Section 8.17 Inconsistent Agreements................................................ 108
ARTICLE 9. DEFAULT...................................................................... 108
Section 9.1 Events of Default...................................................... 108
Section 9.2 Remedies............................................................... 111
ARTICLE 10. THE ADMINISTRATIVE AGENT..................................................... 112
Section 10.1 Appointment and Authorization.......................................... 112
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Section 10.2 Interest Holders....................................................... 113
Section 10.3 Consultation with Counsel.............................................. 113
Section 10.4 Documents.............................................................. 113
Section 10.5 Administrative Agent and Affiliates.................................... 113
Section 10.6 Responsibility of the Administrative Agent............................. 114
Section 10.7 Action by Administrative Agent......................................... 114
Section 10.8 Notice of Default...................................................... 114
Section 10.9 Responsibility Disclaimed.............................................. 115
Section 10.10 Indemnification........................................................ 115
Section 10.11 Credit Decision........................................................ 116
Section 10.12 Successor Administrative Agent......................................... 116
Section 10.13 Administrative Agent May File Proofs of Claim.......................... 116
Section 10.14 Collateral............................................................. 117
Section 10.15 Release of Collateral.................................................. 117
Section 10.16 Additional Agents...................................................... 118
ARTICLE 11. MISCELLANEOUS................................................................ 118
Section 11.1 Notices................................................................ 118
Section 11.2 Expenses............................................................... 120
Section 11.3 Waivers................................................................ 121
Section 11.4 Set-Off................................................................ 122
Section 11.5 Assignment............................................................. 122
Section 11.6 Counterparts........................................................... 125
Section 11.7 Governing Law.......................................................... 125
Section 11.8 Severability........................................................... 125
Section 11.9 Headings............................................................... 125
Section 11.10 Source of Funds........................................................ 125
Section 11.11 Entire Agreement....................................................... 125
Section 11.12 Amendments and Waivers................................................. 125
Section 11.13 Other Relationships.................................................... 127
Section 11.14 Pronouns............................................................... 127
Section 11.15 Disclosure............................................................. 127
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Section 11.16 Replacement of Lender.................................................. 127
Section 11.17 Confidentiality........................................................ 128
ARTICLE 12. YIELD PROTECTION............................................................. 129
Section 12.1 Eurodollar Rate Basis Determination.................................... 129
Section 12.2 Illegality............................................................. 129
Section 12.3 Increased Costs........................................................ 130
Section 12.4 Effect On Other Advances............................................... 131
Section 12.5 Capital Adequacy....................................................... 132
ARTICLE 13. JURISDICTION, VENUE AND WAIVER OF JURY TRIAL; ADMINISTRATIVE BORROWER; JOINT
AND SEVERAL OBLIGATIONS...................................................... 132
Section 13.1 Jurisdiction and Service of Process.................................... 132
Section 13.2 Consent to Venue....................................................... 133
Section 13.3 Waiver of Jury Trial................................................... 133
Section 13.4 The Administrative Borrower............................................ 133
Section 13.5 All Obligations to Constitute Joint and Several Obligations............ 133
Section 13.6 Revival and Reinstatement of Obligations............................... 137
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EXECUTION COPY
EXHIBITS
Exhibit A - Form of Administrative Questionnaire
Exhibit B - Form of Assignment and Assumption Agreement
Exhibit C - Form of Blocked Account Agreement
Exhibit D - Form of Borrowing Base Certificate
Exhibit E Form of Factoring Intercreditor Agreement
Exhibit F - Form of Notice of Conversion/Continuance
Exhibit G - Form of Pledge Agreement
Exhibit H - Form of Request for Advance
Exhibit I - Form of Request for Issuance of Letter of Credit
Exhibit J - Form of Revolving Loan Note
Exhibit K - Form of Security Agreement
Exhibit L - Form of Loan Certificate
Exhibit M Form of Guaranty Supplement
Exhibit N - Form of Performance Certificate
Exhibit O - Form of Daily Letter of Credit Report
Exhibit P - Form of Intellectual Property Security Agreement
SCHEDULES
Schedule 1(a) - Eligible Real Estate
Schedule 1(b) - Commitment Ratios
Schedule 1(c) - Liens
Schedule 2.15 - Existing Letters of Credit
Schedule 5.1(c)-1 - Subsidiaries
Schedule 5.1(c)-2 - Partnerships/Joint Ventures
Schedule 5.1(d) - Outstanding Capital Stock Ownership
Schedule 5.1(h) - Material Contracts; Collective Bargaining
Schedule 5.1(i) - Taxes
Schedule 5.1(l) - Investments/Guaranties as of the Agreement Date
Schedule 5.1(m) - Litigation
Schedule 5.1(o) - Intellectual Property; Licenses and Certifications
Schedule 5.1(u) - Insurance
Schedule 5.1(v) - Brokers' Fees
Schedule 5.1(w)-1 - Leased Real Property
Schedule 5.1(w)-2 - Owned Real Property
Schedule 5.1(x)-1 - Environmental Matters - Hazardous Materials
Schedule 5.1(x)-2 - Environmental Matters - Compliance
Schedule 5.1(x)-3 - Environmental Matters - Notices
Schedule 5.1(x)-4 - Environmental Matters - Handling of Hazardous Materials
Schedule 5.1(x)-5 - Environmental Matters - Actions and Orders
Schedule 5.1(x)-6 - Environmental Matters - Releases
Schedule 6.11 - Location of Collateral
Schedule 6.15 - Bank Accounts
Schedule 8.1 - Letters of Credit Existing on the Agreement Date
that are not "Existing Letters of Credit"
Schedule 8.6 - Affiliate Transactions
Schedule 8.7 Factoring Arrangements
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of June 13, 2003 is by and among Oxford
Industries, Inc., a Georgia corporation, Oxford of South Carolina, Inc., a South
Carolina corporation, and, after giving effect to the Acquisition and execution
by Viewpoint International, Inc. of the Joinder Agreement, Viewpoint
International, Inc., a Delaware corporation, as Borrowers, the Subsidiaries of
the Borrowers party hereto as Guarantors, the financial institutions party
hereto as Lenders, the financial institutions party hereto as Issuing ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital (a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services
Inc.), as Syndication Agent, and SunTrust Bank, as Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Parent (as defined below), the Target (as defined below)
and the Sellers (as defined below) are parties to the Acquisition Agreement (as
defined below); and
WHEREAS, pursuant to the Acquisition Agreement, the Parent will, upon
the funding of the Loans (as defined below) under this Agreement (as defined
below), acquire all of the Equity Interests (as defined below) of the Target;
and
WHEREAS, the Borrowers (as defined below) have requested that the
Lenders make available to them the Revolving Loan Commitment (as defined below),
on the terms and conditions set forth herein, to, among other things, finance
the acquisition by the Parent of the Equity Interests of the Target, to fund
transaction costs and to finance general operating and working capital needs of
the Borrowers; and
WHEREAS, the Lenders are willing to make the Revolving Loan Commitment
available to the Borrowers upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
DEFINITIONS, ACCOUNTING PRINCIPLES AND
OTHER INTERPRETIVE MATTERS
Section 1.1 Definitions. For the purposes of this Agreement:
"Account Debtor" shall mean any Person who is obligated to make payments under
an Account.
"Accounts" shall mean all "accounts," as such term is defined in the UCC, of
each Borrower Party whether now existing or hereafter created or arising,
including, without limitation, (i) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by chattel paper (as defined in the UCC) or instruments (as defined in
the UCC)), (including any such obligations that may be characterized as an
account or contract right under the UCC), (ii) all of each Borrower Party's
rights in, to and under all purchase orders or receipts for goods or services,
(iii) all of each Borrower Party's rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(iv) all rights to payment due to a Borrower Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Borrower Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Borrower Party), (v) all health care insurance receivables and (vi) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"ACH Transactions" means any cash management or related services including the
automated clearinghouse transfer of funds by the Administrative Agent (or any
affiliate of the Administrative Agent) for the account of the Borrowers pursuant
to agreement or overdrafts.
"Acquisition" shall mean the acquisition by the Parent on the Agreement Date of
all of the Equity Interests of the Target pursuant to the Acquisition Agreement.
"Acquisition Agreement" shall mean that certain Stock Purchase Agreement dated
as of April 26, 2003 among the Parent, the Target and the Sellers, as the same
may be amended, modified or supplemented from time to time in accordance with
Section 8.13.
"Acquisition Documents" shall mean the Acquisition Agreement, the Earnout
Agreement, the Acquisition Escrow Agreement, the Registration Rights Agreement
dated as of June 13, 2003 among the Target, the Sellers, the "Sellers
Representatives" identified therein and the Parent, the Noncompetition
Agreements dated as of June 13, 2003 between the Parent and each of S. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Beach Blues, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
the Nonsolicitation and Nondisclosure Agreements dated as of June 13, 2003
between the Parent and each of Whole Duty Investments, Ltd., ▇▇▇▇ ▇▇▇▇▇ and
SKM-TB, LLC, as the same may be amended, modified or supplemented from time to
time in accordance with Section 8.13.
"Acquisition Escrow Agreement" shall mean that certain Escrow Agreement dated as
of June 13, 2003 among the Parent, the Target, the Sellers, S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇
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Oddi as the "Sellers Representatives" and JPMorgan Chase Bank, as the same may
be amended, modified or supplemented from time to time in accordance with
Section 8.13.
"Administrative Agent" shall mean SunTrust Bank, acting as administrative agent
for the Lender Group, and any successor Administrative Agent appointed pursuant
to Section 10.12.
"Administrative Agent's Office" shall mean the office of the Administrative
Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other
office as may be designated pursuant to the provisions of Section 11.1.
"Administrative Borrower" shall have the meaning specified in Section 13.4.
"Administrative Questionnaire" shall mean a questionnaire substantially in the
form of Exhibit A.
"Advance" or "Advances" shall mean amounts of the Revolving Loans advanced by
the Lenders to the Borrowers pursuant to Section 2.2 on the occasion of any
borrowing.
"Affiliate" shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person,
and any other Person who is a director, officer or partner of such Person. For
purposes of this definition, "control", when used with respect to any Person,
includes, without limitation, the direct or indirect beneficial ownership of ten
percent (10%) or more of the outstanding voting securities or voting equity of
such Person or the power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent Advance Settlement Date" shall have the meaning specified in Section
2.1(e)(iii).
"Agent Advances" shall have the meaning specified in Section 2.1(e) hereof.
"Agents" shall mean, collectively, the Administrative Agent and the Syndication
Agent.
"Aggregate Letter of Credit Commitment" shall mean the several obligations of
the Issuing Banks to issue (or arrange with a Foreign Issuer for the issuance
of) Letters of Credit for the account of Borrowers from time to time in an
aggregate face amount not to exceed $175,000,000 pursuant to the terms of this
Agreement.
"Aggregate Revolving Credit Obligations" shall mean, as of any particular time,
the sum of (a) the aggregate principal amount of all Revolving Loans then
outstanding, plus (b) the aggregate amount of all Letter of Credit Obligations
then outstanding, plus (c) the aggregate amount of all Swing Loans then
outstanding, plus (d) the aggregate principal amount of all Agent Advances then
outstanding.
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"Agreement" shall mean this Credit Agreement, together with all Exhibits and
Schedules hereto, as amended, restated, supplemented or otherwise modified from
time to time.
"Agreement Date" shall mean the date as of which this Agreement is dated.
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations, and orders of governmental bodies
or regulatory agencies applicable to such Person, and all orders and decrees of
all courts and arbitrators in proceedings or actions to which the Person in
question is a party or by which it is bound.
"Approved Freight Handler" shall mean any freight forwarder, customs broker,
customs agent, shipper, shipping company or similar Person utilized by a
Borrowing Base Borrower Party from time to time in connection with the
importation of Inventory that has delivered a Lien Acknowledgment Agreement in
favor of the Administrative Agent, so long as such Lien Acknowledgement
Agreement remains in full force and effect and the Administrative Agent has not
received any notice of termination with respect thereto.
"Approved Fund" shall mean any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity that administers or
manages a Lender.
"Assignment and Assumption Agreement" shall mean that certain form of Assignment
and Assumption Agreement attached hereto as Exhibit B, pursuant to which each
Lender may, as further provided in Section 11.5, sell a portion of its Loans and
Revolving Loan Commitments.
"Assignments of Life Insurance Policy" shall mean the assignments of life
insurance policies as collateral from the applicable Borrower Party in favor of
the Administrative Agent, for the benefit of the Lender Group, assigning such
Borrower Party's life insurance policy or policies on the lives of (a) S.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and (b) ▇▇▇▇▇ ▇▇▇▇▇ Gasperina, and acknowledged by the
applicable insurance company issuing such policy or policies, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Assignment of Rights under Acquisition Agreement" shall mean that certain
Assignment of Rights under Acquisition Agreement of even date herewith, executed
by the Parent in favor of the Administrative Agent, for the benefit of the
Lender Group, and acknowledged by the Sellers, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Authorized Signatory" shall mean such personnel of each Borrower Party as may
be duly authorized and designated in writing to the Administrative Agent by such
Borrower Party to execute documents, agreements, and instruments on behalf of
such Borrower Party.
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"Availability" shall mean, as of any particular time, (a) the lesser of (i) the
Revolving Loan Commitment and (ii) the Borrowing Base, minus (b) in each case,
the Aggregate Revolving Credit Obligations.
"Available Letter of Credit Amount" shall mean, as of any particular time, an
amount equal to the lesser of (a) the Aggregate Letter of Credit Commitment at
such time, minus the aggregate amount of all Letter of Credit Obligations at
such time and (b) Availability at such time.
"Available Revolving Loan Commitment" shall mean, as of any particular time, (a)
the amount of the Revolving Loan Commitment at such time minus (b) the Aggregate
Revolving Credit Obligations at such time.
"Avoidance Provisions" shall have the meaning specified in Section 13.5(b).
"Bank Product Reserves" means all reserves that the Administrative Agent, from
time to time, establishes in its reasonable discretion for the Bank Products
then provided or outstanding.
"Bank Products" shall mean any one or more of the following types of services or
facilities extended to the Borrower Parties by the Administrative Agent (or any
affiliate of the Administrative Agent) or, so long as Bank of America, N.A. is a
Lender hereunder, Bank of America, N.A. (or any affiliate of Bank of America,
N.A.) or, in the case of Hedge Agreements, the Administrative Agent (or any
affiliate of the Administrative Agent) or any Lender: (a) credit cards; (b) ACH
Transactions; (c) cash management, including controlled disbursement services;
and (d) Hedge Agreements.
"Bank Products Documents" shall mean all agreements entered into from time to
time by the Borrower Parties in connection with any of the Bank Products and
shall include the Hedge Agreements.
"Bankruptcy Code" shall mean the United States Bankruptcy Code (11 U.S.C.
Section 101 et seq.), as now or hereafter amended, and any successor statute.
"Base Rate" shall mean, at any time, a fluctuating and floating rate per annum
equal to the higher of: (a) 0.50% per annum above the latest Federal Funds Rate;
and (b) the rate of interest announced publicly by SunTrust Bank from time to
time as its "prime rate" for the determination of interest rate loans of varying
maturities in Dollars to United States residents of varying degrees of credit
worthiness. Such "prime rate" is not necessarily the lowest rate of interest
charged to borrowers of SunTrust Bank, and SunTrust Bank may make commercial
loans or other loans at rates of interest at, above, or below such "prime rate".
Each change in the prime rate announced by SunTrust Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change.
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"Base Rate Advance" shall mean an Advance which the Administrative Borrower
requests to be made as a Base Rate Advance or which is reborrowed as a Base Rate
Advance, in accordance with the provisions of Section 2.2.
"Blocked Account" shall have the meaning specified in Section 6.15.
"Blocked Account Agreement" shall mean any agreement executed by a depository
bank and the Administrative Agent, for the benefit of the Lender Group, and
acknowledged and agreed to by the Administrative Borrower, in the form of
Exhibit C or such other form acceptable to the Administrative Agent in its sole
discretion, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"Borrower Parties" shall mean, collectively, the Borrowers and each of their
respective Domestic Subsidiaries.
"Borrowers" shall mean the Parent, Oxford of South Carolina, Inc., a South
Carolina corporation, and, after giving effect to the Acquisition and execution
by the Target of a Joinder Agreement, the Target.
"Borrowing Base" shall mean, at any particular time, the sum of:
(a) up to 85% of Eligible Non-Factored Accounts and
Eligible Factored Accounts (With Recourse); plus
(b) up to 90% of Eligible Factored Accounts (Without
Recourse), plus
(c) the sum of (i) the lesser of (A) up to 65% of the
Value of Eligible Landed Inventory of the Target and
the Target Retail Borrower Parties consisting of
finished goods and (B) up to 85% of the net appraised
OLV of Eligible Landed Inventory of the Target and
the Target Retail Borrower Parties consisting of
finished goods, and (ii) the lesser of (A) up to 60%
of the Value of Eligible Landed Inventory of the
Borrowing Base Borrower Parties (other than the
Target and the Target Retail Borrower Parties)
consisting of finished goods and (B) up to 85% of the
net appraised OLV of Eligible Landed Inventory of the
Borrowing Base Borrower Parties (other than the
Target and the Target Retail Borrower Parties)
consisting of finished goods, plus
(d) the lesser of (i) up to 40% of the Value of Eligible
Landed Inventory consisting of raw materials, and
(ii) up to 70% of the net appraised OLV of Eligible
Landed Inventory consisting of raw materials, plus
(e) (i) with respect to the Target and the Target Retail
Borrower
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Parties, up to 55% of the Value of their Eligible
In-Transit Inventory, and (ii) with respect to the
Borrowing Base Borrower Parties (other than the
Target and the Target Retail Borrower Parties), up to
50% of the Value of their Eligible In-Transit
Inventory, plus
(f) The lesser of (i) $10,100,000, and (ii)(A) from the
Agreement Date to but excluding the first anniversary
of the Agreement 70% of the fair market value (as of
the Agreement Date) of Eligible Real Estate, (B) from
the first anniversary of the Agreement Date to but
excluding the second anniversary of the Agreement
Date, 47% of the fair market value (as of the
Agreement Date) of Eligible Real Estate, (C) from the
second anniversary of the Agreement Date to but
excluding the third anniversary of the Agreement
Date, 23% of the fair market value (as of the
Agreement Date) of Eligible Real Estate and (D)
thereafter, zero, minus
(g) the Reserves;
provided, however, that the amount of availability created under clauses (a),
(b), (c), (d) and (e) of this definition in respect of any and all Borrower
Parties included in clause (c) of the definition of Borrowing Base Borrower
Party shall be limited to $15,000,000.
"Borrowing Base Borrower Parties" shall mean, collectively, (a) the Borrowers,
(b) the Target Retail Borrower Parties and (c) any other Borrower Party or
Borrower Parties approved by the Administrative Agent in writing after the
Agreement Date, in any event, after the Administrative Agent has completed its
due diligence with respect to such Borrower Party's or Borrower Parties'
Accounts and Inventory.
"Borrowing Base Certificate" shall mean a certificate of an Authorized Signatory
of the Administrative Borrower substantially in the form of Exhibit D.
"Business Day" shall mean any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of Georgia or is a day on which
banking institutions located in such state are closed; provided, however, that
when used with reference to a Eurodollar Advance (including the making,
continuing, prepaying or repaying of any Eurodollar Advance), the term "Business
Day" shall also exclude any day in which banks are not open for dealings in
deposits of Dollars on the London interbank market.
"Capital Expenditures" shall mean, for any period, on a consolidated basis for
the Borrower Parties, the aggregate of all expenditures made by the Borrower
Parties during such period that, in conformity with GAAP, are required to be
included in or reflected on the consolidated balance sheet as a capital asset of
the Borrower Parties, including Capitalized Lease Obligations of the Borrower
Parties.
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"Capitalized Lease Obligation" shall mean that portion of any obligation of a
Person as lessee under a lease which at the time would be required to be
capitalized on the balance sheet of such lessee in accordance with GAAP.
"Change in Control" shall mean the occurrence of one or more of the following
events: (a) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the SEA) of
thirty five percent (35%) or more of the outstanding shares of the voting Equity
Interest of the Parent; (b) as of any date a majority of the board of directors
of the Parent consists (other than vacant seats) of individuals who were not
either (i) directors of the Parent as of the Agreement Date, (ii) selected or
nominated to become directors by the board of directors of the Parent of which a
majority consisted of individuals described in clause (i), or (iii) selected or
nominated to become directors by the board of directors of the Parent of which a
majority consisted of individuals described in clause (i) and individuals
described in clause (ii), or (c) except as otherwise specifically permitted
hereunder and except for directors qualifying shares (required by Applicable
Law) in certain Foreign Subsidiaries, the Parent ceases to directly or
indirectly own and control one hundred percent (100%) of the outstanding Equity
Interests of all of its Subsidiaries.
"Clearing Account" shall mean Account No. 1000004189469 (or such other account
number established by the Administrative Agent for purposes of Section 6.15)
maintained by the Administrative Agent at SunTrust Bank, in Atlanta, Georgia
pursuant to Section 6.15 of this Agreement, and over which the Administrative
Agent has the sole dominion and exclusive access and control for withdrawal
purposes pursuant to Section 6.15 of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" shall mean all property pledged as collateral security for the
Obligations pursuant to the Security Documents or otherwise, and all other
property of any Borrower Party that is now or hereafter in the possession or
control of the Administrative Agent, any Issuing Bank or any Lender or on which
the Administrative Agent, any Issuing Bank or any Lender has been granted a Lien
in connection with the Obligations.
"Commercial Letter of Credit" shall mean a documentary Letter of Credit issued
in respect of the purchase of goods or services by any Borrower Party in the
ordinary course of its business.
"Confidential Information" means information that any Borrower Party furnishes
to any member of the Lender Group in a writing designated as confidential, and
all information relating to the Acquisition, but does not include any such
information that is or becomes generally available to the public or that is or
becomes available to such member of the Lender Group from a source other than a
Borrower Party.
"Contributing Borrower" shall have the meaning specified in Section 13.5(e).
8
"Customer Dispute" shall mean all instances in which (i) a customer of a
Borrowing Base Borrower Party has rejected or returned the goods and such return
or rejection has not been accepted by such Borrowing Base Borrower Party as a
valid return or rejection, or (ii) a customer of a Borrowing Base Borrower Party
has otherwise affirmatively asserted grounds for nonpayment of an Account or any
portion thereof, including, without limitation, any repossession of goods by
such Borrowing Base Borrower Party, or any claim by an Account Debtor of total
or partial failure of delivery, set-off, counterclaim or breach of warranty.
"Date of Issue" shall mean the date on which an Issuing Bank issues (or arranges
with a Foreign Issuer for the issuance of) a Letter of Credit pursuant to
Section 2.15.
"Default" shall mean any Event of Default, and any of the events specified in
Section 9.1 regardless of whether there shall have occurred any passage of time
or giving of notice (or both) that would be necessary in order to constitute
such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to, (a) with
respect to outstanding principal, the sum of (i) the applicable Interest Rate
Basis, plus (ii) the applicable Interest Rate Margin plus (iii) two percent
(2%), and (b) with respect to all other Obligations, the sum of (i) the Base
Rate, plus (ii) the Interest Rate Margin applicable to Base Rate Advances plus
(iii) two percent (2%); provided, however, that with respect to any Eurodollar
Advance outstanding on the date on which the Default Rate becomes applicable,
the Default Rate shall be based on the then applicable Eurodollar Basis until
the end of the current Eurodollar Advance Period and thereafter the Default Rate
shall be based on the Base Rate as in effect from time to time.
"Disbursement Account" shall mean account number 8800828975 maintained at
SunTrust Bank, or as otherwise designated to the Administrative Agent by the
Borrowers.
"Dividends" shall mean, any direct or indirect distribution, dividend, or
payment to any Person on account of any Equity Interests of any Borrower or any
Borrower's Subsidiaries.
"Dollars" or "$" shall mean United States dollars.
"Domestic Subsidiary" shall mean any Subsidiary of a Borrower Party that is
organized and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.
"Earnout Agreement" means that certain Earnout Agreement dated as of June 13,
2003 among the Sellers, the Parent and the Target, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with Section 8.13.
"Earnout Subordination Agreement" shall mean that certain Earnout Subordination
Agreement of even date hereof among the Parent, the Sellers, the Indenture
Trustee and
9
the Administrative Agent, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with Section 8.13.
"EBITDA" shall mean, with respect to the Parent on a consolidated basis with its
Subsidiaries for any period, the Net Income for such period, plus, (i) without
duplication and to the extent reflected as charges in the statement of Net
Income for such period, the sum of (a) income taxes, (b) Interest Expense (c)
depreciation and amortization expense, and (d) extraordinary losses, minus (ii)
to the extent added in computing Net Income for such period, extraordinary
gains; provided, however, that if any such calculation includes any period in
which an acquisition or sale of a Person or the assets of a Person occurred,
then such calculation shall be made on a Pro Forma Basis.
"Eligible Accounts" shall mean, at any particular date, all Accounts of each
Borrowing Base Borrower Party (less reserves for discounts or allowances,
including, without limitation, discounts for prompt payment or volume
purchases), but excluding each of the following Accounts:
(a) Accounts with respect to which more than sixty (60) days have
elapsed since the due date of the original invoice therefor or that contained
terms of one hundred (100) days or more in the original invoice therefor;
(b) Accounts with respect to which any of the representations,
warranties, covenants, and agreements contained in Section 5.2 are not or have
ceased to be complete and correct or have been breached;
(c) Accounts with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned uncollected for any
reason;
(d) Accounts as to which such Borrowing Base Borrower Party has
not performed, as of the applicable calculation date, all of its obligations
then required to have been performed, including, without limitation, the
delivery of merchandise or rendition of services applicable to such Accounts;
(e) Accounts as to which any one or more of the following events
has occurred with respect to the Account Debtor on such Accounts: death or
judicial declaration of incompetency of such Account Debtor who is an
individual; the filing by or against such Account Debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under the bankruptcy,
insolvency, or similar laws of the United States, any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect; the making of
any general assignment by such Account Debtor for the benefit of creditors; the
appointment of a receiver or trustee for such Account Debtor or for any of the
assets of such Account Debtor, including, without limitation, the appointment of
or taking possession by a "custodian," as defined in Title 11 of the United
States Code; the institution by or against
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such Account Debtor of any other type of insolvency proceeding (under the
bankruptcy laws of the United States or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, such Account Debtor; the sale, assignment, or
transfer of all or substantially all of the assets of such Account Debtor unless
the obligations of such Account Debtor in respect of the Accounts are assumed by
and assigned to such purchaser or transferee; the nonpayment generally by such
Account Debtor of its debts as they become due; or the cessation of the business
of such Account Debtor as a going concern;
(f) (i) those Accounts (other than Accounts covered under item
(ii) of this clause (f)) of an Account Debtor for whom fifty percent (50%) or
more of the aggregate Dollar amount of such Account Debtor's outstanding
Accounts are classified as ineligible under the other criteria other than this
subsection set forth herein; or (ii) those Accounts with respect to which the
aggregate Dollar amount of all Accounts owed by the Account Debtor thereon
exceeds twenty percent (20%) (or, with respect to Accounts owed by Target
Corporation, thirty percent (30%) or, upon written notice by the Administrative
Agent to the Administrative Borrower, such lower percentage down to twenty
percent (20%) as shall be determined by the Administrative Agent in its
reasonable discretion from time to time based on the Administrative Agent's
assessment of Target Corporation's creditworthiness as of any such time) of the
aggregate amount of all Accounts at such time to the extent of such excess;
(g) Accounts owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States or Canada; or (ii) is
not organized under the laws of the United States or Canada or any state,
province or territory thereof; or (iii) is the government of any foreign country
or sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Accounts do not exceed
$5,000,000 in the aggregate and are secured or payable by a letter of credit or
acceptance, or insured under foreign credit insurance, in each case, on terms
and conditions satisfactory to the Administrative Agent in its sole discretion;
(h) Accounts owed by an Account Debtor which is an Affiliate or
employee of such Borrowing Base Borrower Party;
(i) Accounts which are owed by an Account Debtor to which such
Borrowing Base Borrower Party is indebted in any way, but only to the extent of
such indebtedness, or which are subject to any right of setoff by the Account
Debtor, but only to the extent of such right of set off, unless the Account
Debtor has entered into an agreement acceptable to the Administrative Agent to
waive setoff rights;
(j) Accounts which are subject to any Customer Dispute, but only
to the extent of the amount in dispute;
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(k) Accounts which are owed by the government of the United States
of America or Canada, or any department, agency, public corporation, or other
instrumentality thereof, unless all required procedures for the effective
collateral assignment of the Accounts under the Federal Assignment of Claims Act
of 1940 or any comparable Canadian law and any other steps necessary to perfect
the Administrative Agent's security interest, for the benefit of the Lender
Group, in such Accounts have been complied with to the Administrative Agent's
satisfaction with respect to such Accounts;
(l) Accounts which are owed by any state, municipality, territory
or other political subdivision of the United States of America or Canada, or any
department, agency, public corporation, or other instrumentality thereof and as
to which the Administrative Agent determines in its reasonable discretion that
its security interest therein is not or cannot be perfected;
(m) Accounts which represent sales on a ▇▇▇▇-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other repurchase or
return basis;
(n) Accounts which are evidenced by a promissory note or other
instrument or by chattel paper;
(o) Accounts with respect to which the Account Debtor thereunder
is located in a state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit any Borrowing Base Borrower Party to
seek judicial enforcement in such State of payment of such Account unless if, at
the time the Accounts were created and at all times thereafter, (i) such
Borrowing Base Borrower Party has filed and has maintained effective a current
Notice of Business Activities Report with the appropriate office or agency of
such state or (ii) such Borrowing Base Borrower Party was and has continued to
be exempt from the filing of such Report and has provided the Administrative
Agent with satisfactory evidence thereof;
(p) Accounts as to which the applicable Account Debtor has not
been sent an invoice;
(q) Accounts that are not a bona fide, valid and, to the best of
such Borrowing Base Borrower Party's knowledge, enforceable obligation of the
Account Debtor thereunder;
(r) Accounts which are owed by an Account Debtor with whom any
Borrowing Base Borrower Party has any agreement or understanding for deductions
from the Accounts, except for discounts or allowances which are made in the
ordinary course of business, including, without limitation, discounts for prompt
payment or volume purchases, and which discounts or allowances are reflected in
the calculation of Reserves;
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(s) Accounts which are not subject to a valid and continuing first
priority Lien in favor of the Administrative Agent, for the benefit of the
Lender Group, pursuant to the Security Documents as to which all action
necessary or desirable to perfect such security interest shall have been taken,
and to which such Borrowing Base Borrower Party has good and marketable title,
free and clear of any Liens (other than Liens in favor of the Administrative
Agent, for the benefit of the Lender Group); or
(t) Accounts as to which a security agreement, financing
statement, equivalent security or Lien instrument or continuation statement is
on file or of record in any public office, except as may have been filed in
favor of the Administrative Agent, for the benefit of the Lender Group, pursuant
to the Security Documents;
provided, however, that for purposes of calculating Eligible Accounts
immediately prior to the Acquisition, references in this definition to
"Accounts" shall include accounts of the Target and the Target Retail Borrower
Parties.
"Eligible Assignee" shall mean (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; or (d) any other Person approved by the Administrative Agent,
the Issuing Banks and, unless (x) such Person is taking delivery of an
assignment in connection with physical settlement of a credit derivatives
transaction or (y) a Default has occurred and is continuing, the Borrowers, such
approvals not to be unreasonably withheld or delayed. If the consent of the
Borrowers to an assignment or to an Eligible Assignee is required hereunder
(including a consent to an assignment which does not meet the minimum assignment
thresholds specified in Section 11.5(b)), the Borrowers shall be deemed to have
given their consent five (5) Business Days after the date notice thereof has
been delivered by the assigning Lender (through the Administrative Agent) unless
such consent is expressly refused by the Borrowers prior to such fifth (5th)
Business Day.
"Eligible Factored Accounts (With Recourse)" shall mean any Account (i) created
by a Borrowing Base Borrower Party, (ii) sold and assigned to a factor under one
of the factoring arrangements specified on Schedule 8.7 hereto (with recourse to
the applicable Borrowing Base Borrower Party on account of the creditworthiness
of the applicable Account Debtor) or such other collection factoring
arrangements (with recourse to the applicable Borrowing Base Borrower Party on
account of the creditworthiness of the applicable Borrowing Base Borrower Party)
as shall be acceptable to the Administrative Agent, (iii) which meets all of the
standards of eligibility set forth in the definition of Eligible Accounts and
(iv) with respect to which the factor has executed and delivered to the
Administrative Agent a Factoring Intercreditor Agreement.
"Eligible Factored Accounts (Without Recourse)" shall mean any Account (i)
created by a Borrowing Base Borrower Party, (ii) sold and assigned to a factor
under one of the factoring arrangements specified on Schedule 8.7 hereto
(without recourse to any Borrowing Base Borrower Party on account of the
creditworthiness of the applicable Account Debtor) or such other collection
factoring arrangements (without recourse to any
13
Borrowing Base Borrower Party on account of the creditworthiness of the
applicable Borrowing Base Borrower Party) as shall be acceptable to the
Administrative Agent, and (iii) with respect to which the factor has executed
and delivered to the Administrative Agent a Factoring Intercreditor Agreement.
"Eligible In-Transit Inventory" shall mean (a) the stated amount of outstanding
Commercial Letters of Credit issued to purchase Inventory that does not qualify
as Eligible Landed Inventory solely because it is not located in a location
described in clause (c) of the definition of Eligible Landed Inventory and (b)
Inventory that is currently in transit (whether by vessel, air, or land and,
without double counting amounts determined under clause (a) of this definition,
and whether or not the purchase of such Inventory has been satisfied by the
issuance of a Commercial Letter of Credit) from a location outside of the United
States to a location described in clause (c) of the definition of Eligible
Landed Inventory and (i) that does not qualify as Eligible Landed Inventory
solely because it is not located in a location described in clause (c) of the
definition of Eligible Landed Inventory, (ii) with respect to which title to
such Inventory has passed to a Borrowing Base Borrower Party, (iii) that
constitutes finished goods Inventory, (iv) that is insured against types of
loss, damage, hazards, and risks, and in amounts, satisfactory to the
Administrative Agent in its reasonable discretion, (v) that is the subject of a
▇▇▇▇ of lading or a cargo receipt that (A)(x) in the case of a negotiable ▇▇▇▇
of lading or negotiable cargo receipt, is consigned to the Administrative Agent
and/or the Issuing Bank (either directly or by means of endorsement) or (y) in
the case of a non-negotiable ▇▇▇▇ of lading or non-negotiable cargo receipt, is
consigned to the Administrative Agent and/or the Issuing Bank (either directly
or by means of endorsements) or to a Borrowing Base Borrower Party if such ▇▇▇▇
of lading or cargo receipt shall state "[Name of applicable Borrowing Base
Borrower Party], subject to the security interest of SunTrust Bank, as agent,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇" thereon, (B) was issued by
the carrier respecting the subject Inventory, and (C) is in the physical
possession of an Approved Freight Handler or, if applicable, an Issuing Bank and
(vi) to the knowledge of the Administrative Borrower, that meets all of the
Borrowing Base Borrower Parties' representations and warranties contained in the
Loan Documents concerning Eligible Inventory; provided, however, that for
purposes of calculating Eligible In-Transit Inventory immediately prior to the
Acquisition, references in this definition to "Inventory" shall include
Inventory of the Target and the Target Retail Borrower Parties.
"Eligible Inventory" shall mean, collectively, as of any date of determination
the Eligible Landed Inventory and the Eligible In-Transit Inventory.
"Eligible Landed Inventory" shall mean, as of any particular date, the portion
of the Inventory of each Borrowing Base Borrower Party consisting of first
quality finished goods held for sale in the ordinary course of such Borrowing
Base Borrower Party's business that:
(a) is owned solely by such Borrowing Base Borrower Party;
14
(b) conforms to all of the warranties and representations
regarding the same which are set forth in this Agreement or any of the other
Loan Documents;
(c) is located in the United States either (i) on real property
owned by a Borrowing Base Borrower Party, or (ii) on leased premises in regard
to which the landlord thereof, and any bailee, warehouseman or similar party
that will be in possession of such Inventory, shall have executed and delivered
to the Administrative Agent an agreement, in form and substance acceptable to
the Administrative Agent, waiving any landlord's, bailee's, warehouseman's or
other Lien rights such Person may hold in regard to such Borrowing Base Borrower
Party's property in favor of the Administrative Agent, for the benefit of the
Lender Group;
(d) is not subject to any claim of reclamation, or Lien, adverse
claim, interest or right of any other Person;
(e) does not consist of Inventory in transit;
(f) has not been consigned to or by any Person;
(g) is in good condition and meets all standards imposed by any
Person having regulatory authority over such goods, its use and/or sale, and is
currently saleable in the normal course of such Borrower's business;
(h) does not consist of work-in-process;
(i) does not include any Inventory scheduled for return to
vendors, Inventory which is obsolete or slow-moving (for purposes of this
subsection, "obsolete or slow-moving" Inventory shall be deemed to be fifty
percent (50%) of the Value of finished goods items and one hundred percent
(100%) of the Value of raw materials, in each case, which have been in such
Borrowing Base Borrower Party's Inventory for twelve (12) months or longer),
food and beverage Inventory, Inventory markdown, in-stock Inventory markdown,
Inventory shrinkage, intercompany profit, display items, samples, packaging
materials, labels or name plates or similar supplies;
(j) is personal property in which such Borrowing Base Borrower
Party has granted a valid and continuing first Lien in favor of the
Administrative Agent, for the benefit of the Lender Group, pursuant to the
Security Documents, and as to which all action necessary to perfect such
security interest shall have been taken;
(k) is not covered, in whole or in part, by any security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement which is on file or of record in any public office,
except such as may have been filed in favor of the Administrative Agent, for the
benefit of the Lender Group, pursuant to the Security Documents; and
15
(l) with respect to any Inventory that is subject to a Licensing
Agreement, the applicable Borrowing Base Borrower Party has delivered to the
Administrative Agent a Licensor Consent Agreement;
provided, however, that for purposes of calculating Eligible Landed Inventory
immediately prior to the Acquisition, references in this definition to
"Inventory" shall include Inventory of the Target and the Target Retail Borrower
Parties.
"Eligible Non-Factored Accounts" shall mean any Eligible Account which is not an
Eligible Factored Account (With Recourse) or an Eligible Factored Account
(Without Recourse).
"Eligible Real Estate" shall mean all real property and the improvements thereon
described on Schedule 1(a); provided, however, that, if any such real property
or improvements are sold or otherwise disposed of by any Borrower, "Eligible
Real Estate" shall not include such real property and improvements that are no
longer owned by a Borrower.
"Employment Agreements" shall have the meaning specified in Section 4.1.
"Environmental Laws" shall mean, collectively, any and all applicable federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental Authority
regulating, relating to or imposing liability or standards of conduct concerning
environmental protection matters, including without limitation, Hazardous
Materials or human health, as now or may at any time during the term hereof be
in effect.
"Equity Interests" shall mean, as applied to any Person, any capital stock,
membership interests, partnership interests or other equity interests of such
Person, regardless of class or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as in
effect on the Agreement Date and as such Act may be amended thereafter from time
to time.
"ERISA Affiliate" shall mean any Person (whether incorporated or unincorporated)
that together with the Borrowers would be deemed to be a "single employer"
within the meaning of Section 414 of the Code.
"Eurodollar Advance" shall mean an Advance which the Administrative Borrower
requests to be made as a Eurodollar Advance or which is reborrowed as a
Eurodollar Advance, in accordance with the provisions of Section 2.2.
"Eurodollar Advance Period" shall mean, for each Eurodollar Advance, each one,
two, three, or six month period, as selected by the Administrative Borrower
pursuant to
16
Section 2.2, during which the applicable Eurodollar Rate (but not the applicable
Interest Rate Margin) shall remain unchanged. Notwithstanding the foregoing,
however: (i) any applicable Eurodollar Advance Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Eurodollar Advance Period shall end on the next preceding Business
Day; (ii) any applicable Eurodollar Advance Period which begins on a day for
which there is no numerically corresponding day in the calendar month during
which such Eurodollar Advance Period is to end shall (subject to clause (i)
above) end on the last day of such calendar month; and (iii) no Eurodollar
Advance Period shall extend beyond the Maturity Date or such earlier date as
would interfere with the repayment obligations of the Borrowers under Section
2.6. Interest shall be due and payable with respect to any Advance as provided
in Section 2.3.
"Eurodollar Basis" shall mean, with respect to each Eurodollar Advance Period, a
simple per annum interest rate equal to the quotient of (i) the Eurodollar Rate
divided by (ii) one minus the Eurodollar Reserve Percentage, stated as a
decimal. The Eurodollar Basis shall remain unchanged during the applicable
Eurodollar Advance Period, except for changes to reflect adjustments in the
Eurodollar Reserve Percentage.
"Eurodollar Rate" shall mean, for any applicable Eurodollar Advance Period, the
rate per annum quoted at or about 11:00 a.m. (London, England time) two (2)
Business Days prior to the first day of the Eurodollar Advance Period on that
page of the Reuters, Telerate or Bloombergs reporting service (as then being
used by the Administrative Agent to obtain such interest rate quotes) that
displays British Banker's Association Interest Settlement Rates for deposits in
Dollars for a period equal to such Eurodollar Advance Period or if such page or
such service shall cease to be available, such other page or service (as the
case may be) for the purpose of displaying British Banker's Association Interest
Settlement Rates as reasonably determined by the Administrative Agent upon
advising the Administrative Borrower as to the use of any such other service;
provided, that if the Administrative Agent determines that the relevant
foregoing sources are unavailable for the relevant Eurodollar Advance Period,
the Eurodollar Rate shall mean the rate of interest determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
nearest one one-hundredth of one percent (1/100th of 1%)) of the rates per annum
at which deposits in the applicable currency are offered to the Administrative
Agent two (2) Business Days preceding the first day of such Eurodollar Advance
Period by leading banks in the London interbank market as of 10:00 a.m. for
delivery on the first day of such Eurodollar Advance Period, for the number of
days comprised therein and in an amount comparable to the amount of the
applicable Eurodollar Advance of the Administrative Agent.
"Eurodollar Reserve Percentage" shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special
or other marginal reserves) expressed as a decimal (rounded upwards to the next
one one-hundredth of one percent (1/100th of 1%)) in effect on any day to which
the
17
Administrative Agent is subject with respect to the Eurodollar Basis pursuant to
regulations issued by the Board of Governors of the Federal Reserve System (or
any Governmental Authority succeeding to any of its principal functions) with
respect to Eurocurrency Liabilities (as that term is defined in Regulation D).
Eurodollar Advances shall be deemed to constitute Eurocurrency Liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to the
Administrative Agent under Regulation D. The Eurodollar Reserve Percentage shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage. The Eurodollar Basis for any Eurodollar Advance shall be
adjusted as of the effective date of any changes in the Eurodollar Reserve
Percentage.
"Event of Default" shall mean any of the events specified in Section 9.1,
provided that any requirement for notice or lapse of time, or both, has been
satisfied.
"Excess Funding Guarantor" shall have the meaning specified in Section 3.1(m).
"Excess Payment" shall have the meaning specified in Section 3.1(m).
"Existing Letters of Credit" shall have the meaning specified in Section
2.15(a).
"Factoring Intercreditor Agreements" shall mean, collectively, any intercreditor
agreement among the Administrative Agent, the applicable Borrowing Base Borrower
Party and the applicable factor of Accounts of such Borrowing Base Borrower
Party, substantially in the form of Exhibit E hereto or in such other form
satisfactory to the Administrative Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Federal Funds Rate" shall mean, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Administrative Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 12:00 noon (Atlanta, Georgia time)
on that day by each of three leading brokers of Federal funds transactions in
New York, New York selected by the Administrative Agent.
"Fee Letter" shall mean that certain fee letter of even date herewith executed
by the Borrowers and addressed to the Administrative Agent, the Syndication
Agent and SunTrust Capital Markets, Inc..
"Fixed Charge Coverage Ratio" shall mean, with respect to the Parent and its
Subsidiaries on a consolidated basis for any period, calculated on a Pro Forma
Basis in the event of any acquisition during such period, the ratio of (a) the
greater of (i)(x)
18
EBITDA minus (y) (A) Capital Expenditures made during such period and (B) cash
tax payments made during such period and (ii) zero, to (b) the sum of (i)
scheduled payments of principal made with respect to Indebtedness during such
period, (ii) Interest Expense (other than loan fees that, in accordance with
GAAP, are amortized) accrued during such period, (iii) cash earnout payments
made to the Sellers pursuant to the Earnout Agreement during such period, and
(iv) Dividends paid by the Parent during such period (other than Dividends on
common stock which accrue (but are not paid in cash) or are paid in kind or
Dividends on preferred stock which accrue (but are not paid in cash) or are paid
in kind); provided, however, that for purposes of calculating the components of
item (a)(i)(y)(B) and (b)(ii) of this definition (1) for the period ending as of
the last day of the first fiscal quarter of the 2004 fiscal year, the actual
amount of such components for such fiscal quarter multiplied by 4 shall be
included, (2) for the period ending as of the last day of the second fiscal
quarter of the 2004 fiscal year, the actual amount of such components for such
fiscal year multiplied by 2 shall be included and (3) for the period ending as
of the last day of the third fiscal quarter of the 2004 fiscal year, the actual
amount of such components for such fiscal year multiplied by 4/3 shall be
included.
"Foreign Issuer" shall mean any foreign bank engaged by an Issuing Bank to issue
Commercial Letters of Credit on behalf of such Issuing Bank so long as (a) such
foreign bank has agreed to hold any and all documents, instruments or other
Collateral in its possession in connection with the issuance of any Commercial
Letter of Credit as bailee on behalf of the Administrative Agent to perfect the
Administrative Agent's security interest in such documents, instruments or other
Collateral and (b) the agreement between such Issuing Bank and the Foreign
Issuer is satisfactory to the Administrative Agent in its reasonable discretion.
"Foreign Subsidiary" shall mean any Subsidiary of a Borrower Party that does not
constitute a Domestic Subsidiary.
"Fund" shall mean any Person that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.
"Funding Borrower" shall have the meaning specified in Section 13.5(e).
"GAAP" shall mean, as in effect from time to time (subject to the provisions of
Section 1.2), United States generally accepted accounting principles
consistently applied.
"Governmental Authority" shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any
government.
"Guarantors" shall mean, collectively, all Domestic Subsidiaries (other than the
Borrowers and Oxford Receivables Company) of the Parent and "Guarantor" shall
mean any one of the foregoing Guarantors.
19
"Guaranty" or "guaranteed," as applied to an obligation (each a "primary
obligation"), shall mean and include (a) any guaranty, direct or indirect, in
any manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit, and any
obligation of any Person, whether or not contingent, (i) to purchase any such
primary obligation or any property or asset constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of such primary obligation or (2) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance sheet or income
statement condition of any other Person, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner or holder
of any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation against loss in
respect thereof. All references in this Agreement to "this Guaranty" shall be to
the Guaranty provided for pursuant to the terms of Article 3.
"Guaranty Supplement" shall have the meaning specified in Section 6.21.
"Hazardous Materials" shall mean any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), friable asbestos containing
materials defined or regulated as such in or under any Environmental Law.
"Hedge Agreement" shall mean any and all transactions, agreements or documents
now existing or hereafter entered into between or among any Borrower Party, on
the one hand, and the Administrative Agent (or an Affiliate of the
Administrative Agent) or one or more Lenders (or an Affiliate of any Lender), on
the other hand, which provides for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging such
Borrower Party's exposure to fluctuations in interest or exchange rates, loan,
credit exchange or security or currency valuations.
"Indebtedness" shall mean, with respect to any Person (a) indebtedness for
borrowed money or for the deferred purchase price of property and services
(other than trade accounts payable on customary terms in the ordinary course of
business), (b) financial obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) financial obligations of such Person as lessee
under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (d) financial obligations of such Person as the
issuer of Equity Interests redeemable in whole or in part at the option of a
Person other than such issuer, at a fixed and determinable date or upon the
20
occurrence of an event or condition not solely within the control of such
issuer, (e) all net payment obligations with respect to interest rate and
currency hedging agreements, including, without limitation under Hedge
Agreements, (f) reimbursement obligations (contingent or otherwise) with respect
to amounts under letters of credit, bankers acceptances and similar instruments,
(g) financial obligations under purchase money mortgages, (h) financial
obligations under asset securitization vehicles, (i) conditional sale contracts
and similar title retention instruments with respect to property acquired, and
(j) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against a loss in respect of, indebtedness or
financial obligations of others of the kinds referred to in clauses (a) through
(i) above, except to the extent such guaranties are limited to a lesser amount.
"Indenture" shall mean that certain Indenture dated as of May 16, 2003 between
the Parent, as issuer, and the Indenture Trustee governing the issuance of the
Senior Notes, as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with Section 8.13.
"Indenture Trustee" shall mean SunTrust Bank.
"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any state or federal
bankruptcy or insolvency law, assignment for the benefit of creditors, formal or
informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement or similar relief.
"Intellectual Property Security Agreement" shall mean that certain Intellectual
Property Security Agreement of even date herewith among the Borrower Parties and
the Administrative Agent, on behalf of, and for the benefit of, the Lender
Group, in substantially in the form of Exhibit P, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Interest Expense" shall mean, for any period, interest expense and loan fees of
the Parent and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, and including capitalized and non-capitalized interest and
the interest component of Capitalized Lease Obligations.
"Interest Rate Basis" shall mean the Base Rate or the Eurodollar Basis, as
appropriate.
"Interest Rate Margin" shall have the meaning specified in Section 2.3(c).
"Inventory" shall mean all "inventory," as such term is defined in the UCC, of
each Borrower Party, whether now existing or hereafter acquired, wherever
located, and in any event including inventory, merchandise, goods and other
personal property that are held by or on behalf of a Borrower Party for sale or
lease or are furnished or are to be
21
furnished under a contract of service, goods that are leased by a Borrower Party
as lessor, or that constitute raw materials, samples, work-in-process, finished
goods, returned goods, promotional materials or materials or supplies of any
kind, nature or description used or consumed or to be used or consumed in such
Borrower Party's business or in the processing, production, packaging,
promotion, delivery or shipping of the same, including all supplies and embedded
software.
"Issuing Bank Joinder Agreement" shall have the meaning specified in Section
2.15(i).
"Issuing Banks" shall mean (a) SunTrust Bank, (b) Bank of America, N.A., (c)
Shanghai Commercial Bank Ltd., (d) HSBC Bank U.S.A., (e) any other Person
(consented to by the Administrative Agent and, so long as no Default exists, the
Administrative Borrower) who hereafter may be designated as an Issuing Bank
pursuant to an Assignment and Assumption Agreement or pursuant to an Issuing
Bank Joinder Agreement and (f) with respect to Existing Letters of Credit issued
by Wachovia Bank, National Association only and not Letters of Credit to be
issued on or after the Agreement Date, Wachovia Bank, National Association.
"Joinder Agreement" shall mean that certain Joinder Agreement dated as of the
Agreement Date executed and delivered by Target immediately upon consummation of
the Acquisition and pursuant to which Target assumes all rights, liabilities,
responsibilities and obligations of, and becomes, a Borrower under this
Agreement.
"Lender Group" shall mean, collectively, the Administrative Agent, the
Syndication Agent, the Issuing Banks and the Lenders.
"Lenders" shall mean those lenders whose names are set forth on the signature
pages to this Agreement under the heading "Lenders" and any assignees of the
Lenders who hereafter become parties hereto pursuant to and in accordance with
Section 11.5.
"Letter of Credit Commitment" means, with respect to any Issuing Bank, the
obligation of such Issuing Bank to issue (or arrange with a Foreign Issuer for
the issuance of) Letters of Credit in an aggregate face amount from time to time
not to exceed the amount set forth on Schedule I or any applicable Assignment
and Assumption Agreement.
"Letter of Credit Obligations" shall mean, at any time, the sum of (a) an amount
equal to 100% of the aggregate undrawn and unexpired stated amount (including
the amount to which any such Letter of Credit can be reinstated pursuant to its
terms) of the then outstanding Letters of Credit, plus (b) an amount equal to
100% of the aggregate drawn, but unreimbursed drawings of any Letters of Credit
(excluding, for the avoidance of doubt, such drawings that have been reimbursed
with Advances made pursuant to Section 2.15(e)).
22
"Letter of Credit Reserve Account" shall mean any account maintained by the
Administrative Agent for the benefit of any Issuing Bank, the proceeds of which
shall be applied as provided in Section 9.2(d).
"Letters of Credit" shall mean either Standby Letters of Credit or Commercial
Letters of Credit issued by Issuing Banks (or arranged by an Issuing Bank with a
Foreign Issuer on or after the Agreement Date) on behalf of the Borrowers from
time to time in accordance with Section 2.15 and shall include the Existing
Letters of Credit.
"License Agreement" shall mean any license agreement or other agreement between
a Borrower Party and a Person duly holding rights in a trademark, trade name or
service ▇▇▇▇ pursuant to which such Borrower Party is granted a license to use
such trademark, trade name or service ▇▇▇▇ on Inventory of such Borrower Party.
"Licensor Consent Agreement" shall mean an agreement among the applicable
Borrower Party, the Administrative Agent and the applicable licensor in form and
substance reasonably acceptable to the Administrative Agent.
"Lien" shall mean, with respect to any property, any mortgage, lien, pledge,
negative pledge agreement, assignment, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment or other
encumbrance of any kind in respect of such property, whether or not ▇▇▇▇▇▇,
vested, or perfected.
"Lien Acknowledgment Agreement" means an agreement between an Approved Freight
Handler and the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, pursuant to which, among other things, the Approved
Freight Handler acknowledges the Lien of the Administrative Agent in the
Collateral in the possession of the Approved Freight Handler and any documents
evidencing same.
"Loan Account" shall have the meaning specified in Section 2.7.
"Loan Documents" shall mean this Agreement, any Revolving Loan Notes, the
Security Documents, the Blocked Account Agreements, the Earnout Subordination
Agreement, the Factoring Intercreditor Agreements, the Fee Letter, the Joinder
Agreement, the Guaranty Supplements, all reimbursement agreements relating to
Letters of Credit, the Licensor Agreements, any Lien Acknowledgment Agreement,
all landlord, warehouseman or bailee waiver agreements in favor of the
Administrative Agent, all Requests for Advance, all Requests for Issuance of
Letters of Credit, all Notices of Conversion/Continuation, all Borrowing Base
Certificates, and all other lockbox agreements, and other agreements executed or
delivered by a Borrower Party in connection with or contemplated by this
Agreement, including, without limitation, any security agreements or guaranty
agreements from the Borrowers' Subsidiaries to the Administrative Agent, the
Lenders and the Issuing Banks; provided, however, that none of the Bank Products
Documents shall be deemed to constitute Loan Documents.
23
"Loans" shall mean, collectively, the Revolving Loans, the Swing Loans and Agent
Advances.
"Majority Lenders" shall mean (i) as of any date of calculation prior to the
termination of the Revolving Loan Commitment, Lenders the sum of whose Revolving
Commitment Ratios of the Revolving Loan Commitment on such date of calculation
equals or exceeds fifty-one percent (51%) of the amount of the Revolving Loan
Commitment on such date of calculation, or (ii) as of any date of calculation
after termination of the Revolving Loan Commitment, Lenders the total of whose
Revolving Loans outstanding plus participation interests in Letter of Credit
Obligations, Agent Advances and Swing Loans outstanding, as applicable, on such
date of calculation equals or exceeds fifty-one percent (51%) of the total
principal amount of the Revolving Loans, Agent Advances and Swing Loans
outstanding plus Letters of Credit Obligations as of such date of calculation.
"Materially Adverse Effect" shall mean any materially adverse effect (a) upon
the business, condition (financial or otherwise), operations, properties or
prospects of the Parent and its Subsidiaries, taken as a whole, or (b) upon the
ability of the Borrower Parties, taken as a whole, to perform under the Loan
Documents, or (c) upon the rights, benefits or interests of the Administrative
Agent, the Lenders or the Issuing Banks in or to this Agreement, any other Loan
Document or the Collateral.
"Maturity Date" shall mean June 13, 2008 or such earlier date as payment of the
Loans shall be due (whether by acceleration or otherwise).
"Maximum Borrower Liability" shall have the meaning specified in
Section 13.5(b).
"Moody's" shall mean ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgage" shall mean, collectively, any mortgage, deed of trust or deed to
secure debt entered into between a Borrower Party and the Administrative Agent,
in each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Multiemployer Plan" shall have the meaning specified in Section 4001(a)(3) of
ERISA.
"Necessary Authorizations" shall mean all material authorizations, consents,
permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any Governmental Authority whether
federal, state, local, and all agencies thereof, which are required for the
consummation of the Acquisition and the transactions contemplated by the Loan
Documents and the conduct of the businesses and the ownership (or lease) of the
properties and assets of the Borrower Parties and their Subsidiaries, as
applicable.
"Net Cash Proceeds" shall mean, with respect to any sale, lease, transfer,
casualty loss or other disposition or loss of assets by any Borrower Party or
any issuance by any Borrower Party of any Equity Interests or the incurrence by
any Borrower Party of any
24
Total Debt (other than the Obligations), the aggregate amount of cash received
for such assets or Equity Interests, or as a result of such Total Debt, net of
reasonable and customary transaction costs properly attributable to such
transaction and payable by such Borrower Party to a non-Affiliate in connection
with such sale, lease, transfer or other disposition of assets or the issuance
of any Equity Interests or the incurrence of any Total Debt, including without
limitation, sales commissions and underwriting discounts.
"Net Income" shall mean, with respect to any Person for any period, the
consolidated net income (or deficit) of such Person and its Subsidiaries for
such period, determined in accordance with GAAP.
"Notice of Conversion/Continuation" shall mean a notice in substantially the
form of Exhibit F.
"Obligations" shall mean (a) all payment and performance obligations as existing
from time to time of the Borrower Parties to the Lender Group under this
Agreement and the other Loan Documents (including all Letter of Credit
Obligations and including any interest, fees and expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), as they may be amended
from time to time, or as a result of making the Loans or issuing the Letters of
Credit, (b) any obligations as existing from time to time of any Borrower Party
to the Administrative Agent (or an affiliate of the Administrative Agent) or, so
long as Bank of America, N.A. is a Lender hereunder, Bank of America, N.A. (or
an affiliate of Bank of America, N.A.) arising from or in connection with Bank
Products and (c) any obligations as existing from time to time of any Borrower
Party to the Administrative Agent (or an affiliate of the Administrative Agent)
or any Lender (or an Affiliate of a Lender), as applicable, arising from or in
connection with any Hedge Agreement.
"OLV" shall mean, as to any particular asset, the value that is estimated to be
recoverable in an orderly liquidation thereof, as determined from time to time
by a qualified appraiser selected by the Administrative Agent.
"Other Debt Relief Law" shall have the meaning specified in Section 13.5(b).
"Overadvance" shall have the meaning specified in Section 2.1(d).
"Oxford Receivables Company" shall mean Oxford Receivables Company, a Delaware
corporation.
"Parent" shall mean Oxford Industries, Inc., a Georgia corporation.
"Participant" shall have the meaning specified in Section 11.5.
"Payment Date" shall mean the last day of each Eurodollar Advance Period for a
Eurodollar Advance.
25
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent or any other member of
the Lender Group given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes not yet delinquent
and (ii) Liens for taxes, assessments, judgments, governmental charges or
levies, or claims not yet delinquent or the non-payment of which is being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves have been set aside on such Person's books;
(c) Liens of carriers, warehousemen, mechanics, laborers, suppliers,
workers and materialmen incurred in the ordinary course of business for sums not
yet due or being diligently contested in good faith, if such reserve or
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;
(d) Liens incurred in the ordinary course of business in connection with
worker's compensation and unemployment insurance or other types of social
security benefits;
(e) Easements, rights-of-way, restrictions (including zoning or deed
restrictions), and other similar encumbrances on the use of real property which
do not interfere with the ordinary conduct of the business of such Person;
(f) Purchase money security interests and Liens securing Capitalized Lease
Obligations provided that such Lien attaches only to the asset (which asset
shall not constitute Inventory) so purchased or leased by the applicable
Borrower Party and secures only Indebtedness incurred by such Borrower Party in
order to purchase or lease such asset, but only to the extent permitted by
Section 8.1(d) ;
(g) Deposits to secure the performance of bids, trade contracts, tenders,
sales, leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(h) Liens arising in connection with the sale of Accounts permitted by
Section 8.7 and subject to a Factoring Intercreditor Agreement;
(i) Liens on assets of the Borrower Parties on the Agreement Date (after
giving effect to the Acquisition) which are set forth on Schedule 1(c); and
(j) With respect to Collateral consisting of real property, Liens that are
exceptions to the commitments for title insurance issued in connection with the
Mortgage, as accepted by the Administrative Agent in its sole and absolute
discretion.
26
"Person" shall mean an individual, corporation, partnership, trust, joint stock
company, limited liability company, unincorporated organization, other legal
entity or joint venture or a government or any agency or political subdivision
thereof.
"Plan" shall mean an employee benefit plan within the meaning of Section 3(3) of
ERISA or any other plan maintained for employees of any Person or any ERISA
Affiliate of such Person.
"Pledge Agreement" shall mean that certain Pledge Agreement of even date
herewith by certain Borrower Parties in favor of the Administrative Agent for
the benefit of the Lender Group, substantially in the form of Exhibit G, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Pro Forma Basis" shall mean for purposes of determining compliance with the
covenants set forth in Sections 8.8, 8.9 and 8.10 hereof and the defined terms
relating thereto, giving pro forma effect to any acquisition or sale of a
Person, business or asset, and any related incurrence, repayment or refinancing
of Indebtedness, Capital Expenditures or other related transactions which would
otherwise be accounted for as an adjustment permitted by Regulation S-X under
the Securities Act or on a pro forma basis under GAAP, in each case, as if such
acquisition or sale and related transactions were realized on the first day of
the relevant period.
"Property" shall mean any real property or personal property, plant, building,
facility, structure, underground storage tank or unit, equipment, Inventory or
other asset owned, leased or operated by any Borrower Party or any Subsidiary of
a Borrower Party (including, without limitation, any surface water thereon or
adjacent thereto, and soil and groundwater thereunder).
"Pro Rata Share" shall have the meaning specified in Section 3.1(m).
"Reimbursement Obligations" shall mean the payment obligations of the Borrowers
under Section 2.15(d).
"Replacement Asset" shall have the meaning specified in Section 2.6(b)(ii).
"Replacement Event" shall have the meaning specified in Section 11.16.
"Reportable Event" shall have the meaning specified in Section 4043(c) of ERISA
and the regulations thereunder, but shall not include any event which is not
subject to the thirty (30) day notice requirement for which notice is waived
under the regulations to Section 4043 of ERISA.
"Request for Advance" shall mean any certificate signed by an Authorized
Signatory of the Administrative Borrower requesting an Advance hereunder which
will increase the aggregate amount of the Loans outstanding, which certificate
shall be denominated a
27
"Request for Advance," and shall be in substantially the form of Exhibit H. Each
Request for Advance shall, among other things, specify the date of the Advance,
which shall be a Business Day, the amount of the Advance, and the type of
Advance.
"Request for Issuance of Letter of Credit" shall mean any certificate signed by
an Authorized Signatory of the Administrative Borrower requesting that an
Issuing Bank issue (or arrange with a Foreign Issuer for the issuance of) a
Letter of Credit hereunder, increase the stated amount of a Letter of Credit or
extend the expiration date of a Letter of Credit, which certificate shall be in
substantially the form of Exhibit I, and shall, among other things, (a) with
respect to any new Letter of Credit, specify that the requested Letter of Credit
is either a Commercial Letter of Credit or a Standby Letter of Credit, (b) with
respect to any increase in the stated amount of an existing Letter of Credit or
extension of the expiration date of any existing Letter of Credit, identify the
Letter of Credit to be amended and the Issuing Bank therefor, (c) the stated
amount of the Letter of Credit (which shall be in Dollars), (c) the effective
date (which shall be a Business Day) for the issuance or amendment of such
Letter of Credit, (d) the date on which such Letter of Credit is to expire
(which shall be a Business Day and which shall be subject to Section 2.15(a)),
(e) the Person for whose benefit such Letter of Credit (or amendment to a Letter
of Credit) is to be issued, (f) other relevant terms of such Letter of Credit,
and (g) the Available Letter of Credit Amount as of the scheduled date of
issuance (or amendment) of such Letter of Credit.
"Reserves" shall mean reserves that the Administrative Agent may establish from
time to time in its reasonable credit judgment for such purposes as the
Administrative Agent shall deem necessary. Without limiting the generality of
the foregoing, the following reserves shall be deemed an exercise of the
Administrative Agent's reasonable credit judgment: (a) reserves for price
adjustments and damages, (b) reserves for obsolescence of Inventory; (c)
reserves for special order goods and deferred shipment sales; (d) reserves for
accrued but unpaid ad valorem and personal property tax liability; (e) reserves
for market value declines; (f) receivable reserves; (g) reserves in the amount
of Net Cash Proceeds provisionally applied to the Swing Loans, Agent Advances
and the Revolving Loans after an asset sale or casualty loss pending
reinvestment of the Net Cash Proceeds of the applicable sale or loss in a
Replacement Asset pursuant to the terms of Section 2.6(b)(ii); (h) Bank Product
Reserves; (i) reserves for accrued, unpaid interest on the Obligations; (j)
reserves for warehousemen's, bailees', shippers' or carriers' charges; (k)
reserves for royalty payments on License Agreements; and (l) reserves for any
other matter that has a negative impact on the value of the Collateral;
"Restricted Payment" shall mean (a) Dividends, (b) any payment of management,
consulting or similar fees payable by any Borrower Party or any Subsidiary of a
Borrower Party to any Affiliate, (c) any earnout payments to the Sellers,
including, without limitation earnout payments made pursuant to the Earnout
Agreement, (d) any payment prior to the scheduled maturity of any Total Debt of
any Borrower Party (other than the Obligations) or (e) any payment or prepayment
of principal of, premium, if any,
28
or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, the Senior Notes.
"Restricted Purchase" shall mean any payment on account of the purchase,
redemption, or other acquisition or retirement of any shares of Equity Interests
of any Borrower Party.
"Revolving Commitment Ratio" shall mean, with respect to any Lender, the ratio,
expressed as a percentage, of (i) the Revolving Loan Commitment of such Lender,
divided by (ii) the aggregate Revolving Loan Commitments of all Lenders, which,
as of the Agreement Date, are set forth (together with Dollar amounts thereof)
on Schedule 1(b); and "Revolving Commitment Ratios" shall mean, collectively,
the Revolving Commitment Ratio of each Lender.
"Revolving Loan Commitment" shall mean the several obligations of the Lenders to
advance the aggregate amount of up to $275,000,000 to the Borrowers on or after
the Agreement Date, in accordance with their respective Revolving Commitment
Ratios, pursuant to the terms hereof, and as such amount may be reduced from
time to time, pursuant to the terms of this Agreement.
"Revolving Loan Notes" shall mean those certain promissory notes issued by the
Borrowers to each of the Lenders that requests a promissory note, in accordance
with each such Lender's Revolving Commitment Ratio of the Revolving Loan
Commitment, in substantially in the form of Exhibit J, and any amendments,
replacements, extensions, or renewals thereof.
"Revolving Loans" shall mean, collectively, the amounts (other than Agent
Advances and Swing Loans) advanced from time to time by the Lenders to the
Borrowers under the Revolving Loan Commitment, not to exceed the amount of the
Revolving Loan Commitment.
"S&P" shall mean Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc.
"SEA" shall mean the Securities and Exchange Act of 1934 and the rules
promulgated thereunder by the Securities and Exchange Commission, as amended
from time to time or any similar Federal law then in force
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar Federal law then in force.
"Security Agreement" shall mean that certain Security Agreement of even date
herewith among the Borrower Parties and the Administrative Agent, on behalf of,
and for the benefit of, the Lender Group, substantially in the form of Exhibit
K, as the same may be amended, restated, supplemented or otherwise modified from
time to time.
29
"Security Documents" shall mean, collectively, the Assignments of Life Insurance
Policy, the Assignment of Rights under Acquisition Agreement, the Intellectual
Property Security Agreement, each Mortgage, the Pledge Agreement, the Security
Agreement, all UCC-1 financing statements and any other document, instrument or
agreement granting Collateral for the Obligations, as the same may be amended or
modified from time to time.
"Sellers" shall mean, collectively SKM-TB, LLC, a Delaware limited liability
company, S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, The ▇▇▇▇▇▇▇▇ Family Stock Trust u/a/d May 1, 2000,
Whole Duty Investment, Ltd., a Hong Kong corporation, ▇▇▇▇▇▇ Beach Blues, Inc.,
a Florida corporation, and ▇▇▇▇▇ ▇▇▇▇▇ Gasperina.
"Senior Notes" shall mean the senior debt securities of the Parent issued under
and pursuant to the terms of the Indenture in the aggregate principal amount of
$200,000,000 and due June 11, 2011.
"Senior Notes Debt" shall mean Indebtedness evidenced by the Senior Notes
Documents.
"Senior Notes Documents" shall mean the Senior Notes and the Indenture, as the
same may be amended, modified or supplemented from time to time in accordance
with Section 8.13.
"Standby Letter of Credit" shall mean a Letter of Credit issued to support
obligations of any Borrower Party incurred in the ordinary course of its
business, and which is not a Commercial Letter of Credit.
"Standby Letter of Credit Issuers" shall mean Issuing Banks consisting of
SunTrust Bank and any other Issuing Bank (consented to by the Administrative
Agent and, so long as no Default exists, the Administrative Borrower) who may be
designated as a Standby Letter of Credit Issuer pursuant to an Assignment and
Assumption Agreement or otherwise.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation of which
more than fifty percent (50%) of the outstanding stock (other than directors'
qualifying shares) having ordinary voting power to elect a majority of its board
of directors, regardless of the existence at the time of a right of the holders
of any class or classes of securities of such corporation to exercise such
voting power by reason of the happening of any contingency, or any partnership
of which more than fifty percent (50%) of the outstanding partnership interests
is at the time owned by such Person, or by one or more Subsidiaries of such
Person, or by such Person and one or more Subsidiaries of such Person, and (b)
any other entity which is controlled or capable of being controlled by such
Person, or by one or more Subsidiaries of such Person, or by such Person and one
or more Subsidiaries of such Person.
"SunTrust Bank" shall mean SunTrust Bank, a bank organized under the laws of the
State of Georgia.
30
"Swing Bank" shall mean SunTrust Bank, or any other Lender who shall agree with
the Administrative Agent and the Administrative Borrower to act as Swing Bank.
"Swing Loans" shall mean any Loans made to the Borrowers by the Swing Bank from
time to time, in accordance with Section 2.2(g).
"Syndication Agent" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a division of ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services Inc., in its capacity as syndication agent.
"Target" shall mean Viewpoint International, Inc., a Delaware corporation.
"Target Retail Borrower Parties" shall mean, collectively, all Domestic
Subsidiaries of the Target that are parties to this Agreement and whose
principal business is the operation of retail stores.
"Total Debt" shall mean as of any date of determination, all Indebtedness of the
Parent and its Subsidiaries on a consolidated basis, excluding Indebtedness of
the type described in clause (e) the definition of Indebtedness.
"UCC" shall mean the Uniform Commercial Code as the same may, from time to time,
be enacted and in effect in the State of New York; provided, that to the extent
that the UCC is used to define any term herein and such term is defined
differently in different Articles or Divisions of the UCC, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, the
Administrative Agent's Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
"Uniform Customs" shall mean the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"Value" shall mean, at any particular date: (a) the lower of the fair market
value of the Inventory and its cost, valued in accordance with the "First-In,
First-Out" method of accounting, minus (b) an amount which is equal to the
amount of reserves which, under FASB No. 48, "Revenue recognition when the right
of return exists," the Borrowing Base Borrower Parties shall be required to take
in regard to the amount identified in subparagraph (a) hereof.
"Voidable Transfer" shall have the meaning specified in Section 13.6.
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Section 1.2 Accounting Principles. The classification, character and
amount of all assets, liabilities, capital accounts and reserves and of all
items of income and expense to be determined, and any consolidation or other
accounting computation to be made, and the interpretation of any definition
containing any financial term, pursuant to this Agreement shall be determined
and made in accordance with GAAP consistently applied, provided that if because
of a change in GAAP after the date of this Agreement the Parent or any of its
Subsidiaries would be required to alter a previously utilized accounting
principle, method or policy in order to remain in compliance with GAAP, such
determination shall continue to be made in accordance with the Parent's or such
Subsidiary's previous accounting principles, methods and policies.
Section 1.3 Other Interpretive Matters. Each definition of an agreement
in this Article 1 shall include such instrument or agreement as modified,
amended, or supplemented from time to time with, if required, the prior written
consent of the Majority Lenders, except as provided in Section 11.12. Except
where the context otherwise requires, definitions imparting the singular shall
include the plural and vice versa. Except where otherwise specifically provided
herein, each reference to a "Section", "Article", "Exhibit" or "Schedule" shall
be to a Section or Article hereof or an Exhibit or Schedule attached hereto.
Except where otherwise specifically restricted, reference to a party to a Loan
Document includes that party and its successors and assigns. All terms used
herein which are defined in Article 9 of the Uniform Commercial Code in effect
in the State of New York on the Agreement Date and which are not otherwise
defined herein shall have the same meanings herein as set forth therein. All
financial calculations hereunder shall, unless otherwise stated, be determined
for the Parent on a consolidated basis with its Subsidiaries.
ARTICLE 2.
THE LOANS AND THE LETTERS OF CREDIT
Section 2.1 Extension of Credit. Subject to the terms and conditions
of, and in reliance upon the representations and warranties made in, this
Agreement and the other Loan Documents, the Lenders have extended and agree,
severally in accordance with their respective Revolving Commitment Ratios, and
not jointly, to extend credit in an aggregate principal amount not to exceed Two
Hundred Seventy Five Million Dollars ($275,000,000).
(a) The Revolving Loans. The Lenders agree, severally in
accordance with their respective Revolving Commitment Ratios and not jointly,
upon the terms and subject to the conditions of this Agreement, to lend and
relend to the Borrowers, on any Business Day prior to the Maturity Date, amounts
which do not exceed such Lender's ratable share (based upon such Lender's
Revolving Commitment Ratio) of Availability as of such Business Day. Subject to
the terms and conditions hereof and prior to the
32
Maturity Date, Advances under the Revolving Loan Commitment may be repaid and
reborrowed from time to time on a revolving basis.
(b) The Letters of Credit. Subject to the terms and conditions
hereof, each Issuing Bank agrees, severally in accordance with its Letter of
Credit Commitment and not jointly, to issue Letters of Credit (or to arrange
with a Foreign Issuer for the issuance of a Letter of Credit on behalf of such
Issuing Bank) for the account of the Borrowers pursuant to Section 2.15 (i) in
an aggregate outstanding face amount (A) for all Issuing Banks, not to exceed
the Aggregate Letter of Credit Commitment at any time, (B) for any individual
Issuing Bank, not to exceed such Issuing Bank's Letter of Credit Commitment, and
(ii) with respect to the issuance of any Letter of Credit as of any Business
Day, not to exceed the Available Letter of Credit Amount as of such Business
Day.
(c) The Swing Loans. Subject to the terms and conditions hereof,
the Swing Bank, in its sole discretion, may from time to time after the
Agreement Date but prior to the Maturity Date, make Swing Loans to the Borrowers
in an aggregate principal amount not to exceed at any time outstanding the least
of (i) the Swing Bank's pro rata share (in accordance with its Revolving
Commitment Ratio) of Availability, (ii) the excess of (x) the Swing Bank's pro
rata share (in accordance with its Revolving Commitment Ratio) of the Revolving
Loan Commitment less (y) the sum of the aggregate outstanding principal amount
of Swing Loans and Revolving Loans made by it and the Swing Bank's pro rata
share (in accordance with its Revolving Commitment Ratio) of the outstanding
Letter of Credit Obligations and Agent Advances, and (iii) $25,000,000.
(d) Overadvances; Optional Overadvances. If at any time the amount
of the Aggregate Revolving Credit Obligations exceeds the Borrowing Base, the
Revolving Loan Commitment or any other applicable limitation set forth in this
Agreement (including, without limitation, the limitations on Swing Loans, Agent
Advances and Letters of Credit), such excess (an "Overadvance") shall
nevertheless constitute a portion of the Obligations that are secured by the
Collateral and are entitled to all benefits thereof. In no event, however, shall
the Borrowers have any right whatsoever to (i) receive any Revolving Loan, (ii)
receive any Swing Loan, or (iii) request the issuance of any Letter of Credit
if, before or after giving effect thereto, there shall exist a Default. In the
event that (1) any Lender shall make any Revolving Loans, (2) any Issuing Bank
shall agree to the issuance of any Letter of Credit, (3) the Swing Bank shall
make any Swing Loan, or (4) the Administrative Agent shall make any Agent
Advances, which in any such case gives rise to an Overadvance, the Borrowers
shall make, on demand, a payment on the Obligations to be applied to the
Revolving Loans, the Swing Loans, the Agent Advances and the Letter of Credit
Reserve Account, as appropriate, in an aggregate principal amount equal to such
Overadvance.
(e) Agent Advances. (i) Subject to the limitations set forth below
and notwithstanding anything else in this Agreement to the contrary, the
Administrative Agent is authorized by the Borrowers and the Lenders, from time
to time in the
33
Administrative Agent's sole discretion, (A) after the occurrence and during the
continuance of a Default, or (B) at any time that any of the other conditions
precedent set forth in Article 4 have not been satisfied, to make Base Rate
Advances to the Borrowers on behalf of the Lenders in an aggregate amount
outstanding at any time not to exceed $5,000,000, but, together with all
Revolving Loans, Swing Loans and Letters of Credit outstanding, not in excess of
the Revolving Loan Commitment, which the Administrative Agent, in its reasonable
business judgment, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to
pay any other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including costs, fees and expenses as provided under this Agreement
(any of such advances are herein referred to as "Agent Advances"); provided,
that the Majority Lenders may at any time revoke the Administrative Agent's
authorization to make Agent Advances. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent's receipt
thereof. The Administrative Agent shall promptly provide to the Administrative
Borrower written notice of any Agent Advance.
(ii) The Agent Advances shall be secured by the Collateral
and shall constitute Obligations hereunder. Each Agent Advance shall bear
interest at the same rate as a Base Rate Advance. Each Agent Advance shall be
subject to all terms and conditions of this Agreement and the other Loan
Documents applicable to Revolving Loans, except that all payments thereon shall
be made to the Administrative Agent solely for its own account. The
Administrative Agent shall have no duty or obligation to make any Agent Advance
hereunder.
(iii) The Administrative Agent shall notify each Lender no
less frequently than weekly, as determined by the Administrative Agent, of the
principal amount of Agent Advances outstanding as of 12:00 noon (Atlanta,
Georgia time) as of such date, and each Lender's pro rata share thereof. Each
Lender shall before 2:00 p.m. (Atlanta, Georgia time) on such Business Day (the
"Agent Advance Settlement Date") make available to the Administrative Agent, in
immediately available funds, the amount of its pro rata share of such principal
amount of Agent Advances outstanding. Upon such payment by a Lender, such Lender
shall be deemed to have made a Revolving Loan to the Borrowers, notwithstanding
any failure of the Borrowers to satisfy the conditions in Section 4.2. The
Administrative Agent shall use such funds to repay the principal amount of Agent
Advances. Additionally, if at any time any Agent Advances are outstanding, any
of the events described in clauses (g) or (h) of Section 9.1 shall have
occurred, then each Lender shall automatically, upon the occurrence of such
event, and without any action on the part of the Administrative Agent, the
Borrowers or the Lenders, be deemed to have purchased an undivided participation
in the principal and interest of all Agent Advances then outstanding in an
amount equal to such Lender's Revolving Commitment Ratio and each Lender shall,
notwithstanding such Event of Default, immediately pay to the Administrative
Agent in immediately available funds, the amount
34
of such Lender's participation (and upon receipt thereof, the Administrative
Agent shall deliver to such Lender, a loan participation certificate dated the
date of receipt of such funds in such amount).
Section 2.2 Manner of Borrowing and Disbursement of Loans.
(a) Choice of Interest Rate, etc. Any Advance of the Revolving
Loans shall, at the option of the Borrowers, be made either as a Base Rate
Advance or as a Eurodollar Advance (except for the first two (2) Business Days
after the Agreement Date, during which period the Revolving Loans shall bear
interest as a Base Rate Advance); provided, however, that (i) if the
Administrative Borrower fails to give the Administrative Agent written notice
specifying whether a Eurodollar Advance is to be repaid, continued or converted
on a Payment Date, such Advance shall be converted to a Base Rate Advance on the
Payment Date in accordance with Section 2.3(a)(iii), and (ii) the Administrative
Borrower may not select a Eurodollar Advance (A) with respect to Swing Loans,
(B) with respect to an Advance, the proceeds of which are to reimburse an
Issuing Bank pursuant to Section 2.15, or (C) if, at the time of such Advance or
at the time of the continuation of, or conversion to, a Eurodollar Advance
pursuant to Section 2.2(c), a Default has occurred and is continuing. Any notice
given to the Administrative Agent in connection with a requested Advance
hereunder (other than a request for a Swing Loan) shall be given to the
Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) in order for
such Business Day to count toward the minimum number of Business Days required.
(b) Base Rate Advances.
(i) Initial and Subsequent Advances. The Administrative
Borrower shall give the Administrative Agent in the case of Base Rate
Advances, not later than 11:00 a.m. (Atlanta, Georgia time) on the
Business Day of a proposed Advance irrevocable prior notice by
telephone and shall confirm any such telephone notice with a written
Request for Advance; provided, however, that the failure by the
Administrative Borrower to confirm any notice by telephone or
telecopy with a Request for Advance shall not invalidate any notice so
given.
(ii) Repayments and Conversions. The Borrowers may (A) at
any time without prior notice repay or prepay a Base Rate Advance, or
(B) upon at least three (3) Business Days' irrevocable prior written
notice to the Administrative Agent in the form of a Notice of
Conversion/Continuation, convert all or a portion of the principal
thereof to one or more Eurodollar Advances. Upon the date indicated by
the Administrative Borrower, such Base Rate Advance shall be so repaid
or converted.
35
(c) Eurodollar Advances.
(i) Initial and Subsequent Advances. The Administrative
Borrower shall give the Administrative Agent in the case of Eurodollar
Advances at least three (3) Business Days' irrevocable prior notice by
telephone and shall immediately confirm any such telephone notice with
a written Request for Advance; provided, however, that the failure by
the Administrative Borrower to confirm any notice by telephone or
telecopy with a Request for Advance shall not invalidate any notice so
given.
(ii) Repayments, Continuations and Conversions. At least
three (3) Business Days prior to each Payment Date for a Eurodollar
Advance, the Administrative Borrower shall give the Administrative
Agent written notice in the form of a Notice of Continuation/Conversion
specifying whether all or a portion of such Eurodollar Advance
outstanding on such Payment Date is to be continued in whole or in part
as one or more new Eurodollar Advances and also specifying the new
Eurodollar Advance Period applicable to the continuation of such
Eurodollar Advance (and subject to the provisions of this Agreement,
upon such Payment Date such Eurodollar Advance shall be so continued).
Upon such Payment Date, any Eurodollar Advance (or portion thereof) not
so continued shall be converted to a Base Rate Advance, subject to
Section 2.5, or prepaid or repaid.
(iii) Miscellaneous. Notwithstanding any term or provision
of this Agreement which may be construed to the contrary, each
Eurodollar Advance shall be in a principal amount of no less than
$1,000,000 and in an integral multiple of $500,000 in excess thereof,
and at no time shall the aggregate number of all Eurodollar Advances
then outstanding exceed ten (10).
(d) Notification of Lenders. Upon receipt of a (i) Request for
Advance or a telephone or telecopy request for Advance, (ii) notification from
an Issuing Bank that a draw has been made under any Letter of Credit (unless
such Issuing Bank will be reimbursed through the funding of a Swing Loan), (iii)
notification from the Swing Bank with respect to any outstanding Swing Loans
pursuant to Section 2.2(g)(ii) or (iv) notice from the Administrative Borrower
with respect to any outstanding Advance prior to the Payment Date for such
Advance, the Administrative Agent shall promptly notify each Lender by telephone
or telecopy of the contents thereof and the amount of each Lender's portion of
any such Advance. Each Lender shall, not later than 1:00 p.m. (Atlanta, Georgia
time) on the date specified for such Advance in such notice, make available to
the Administrative Agent at the Administrative Agent's Office, or at such
account as the Administrative Agent shall designate, the amount of such Lender's
portion of the Advance in immediately available funds.
(e) Disbursement. Prior to 3:00 p.m. (Atlanta, Georgia time) on
the date of an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in Article 4 hereof, disburse the
amounts made available to the
36
Administrative Agent by the Lenders in like funds by (i) transferring the
amounts so made available by wire transfer to the Disbursement Account or (ii)
in the case of an Advance the proceeds of which are to reimburse an Issuing Bank
pursuant to Section 2.15, transferring such amounts to such Issuing Bank. Unless
the Administrative Agent shall have received notice from a Lender prior to 12:00
Noon (Atlanta, Georgia time) on the date of any Advance that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
such Advance, the Administrative Agent may assume that such Lender has made or
will make such portion available to the Administrative Agent on the date of such
Advance and the Administrative Agent may, in its sole discretion and in reliance
upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent such Lender shall not have so made
such ratable portion available to the Administrative Agent, such Lender agrees
to repay to the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrowers until the date such amount is repaid to the
Administrative Agent, (x) for the first two (2) Business Days, at the Federal
Funds Rate on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day by
the Federal Reserve Bank of New York, and (y) thereafter, at the Base Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender's portion of the applicable
Advance for purposes of this Agreement, and if both such Lender and the
Borrowers shall pay and repay such corresponding amount, the Administrative
Agent shall promptly relend to the Borrowers such corresponding amount. If such
Lender does not repay such corresponding amount immediately upon the
Administrative Agent's demand therefor, the Administrative Agent shall notify
the Administrative Borrower, and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent. The failure of any Lender to
fund its portion of any Advance shall not relieve any other Lender of its
obligation, if any, hereunder to fund its respective portion of the Advance on
the date of such borrowing, but no Lender shall be responsible for any such
failure of any other Lender. In the event that a Lender for any reason fails or
refuses to fund its portion of an Advance in violation of this Agreement, then,
until such time as such Lender has funded its portion of such Advance, or all
other Lenders have received payment in full (whether by repayment or prepayment)
of the principal and interest due in respect of such Advance, such non-funding
Lender shall not (i) have the right to vote regarding any issue on which voting
is required or advisable under this Agreement or any other Loan Document, and
with respect to any such Lender, the amount of the Revolving Loan Commitment or
Loans, as applicable, held by such Lender shall not be counted as outstanding
for purposes of determining "Majority Lenders" hereunder, and (ii) be entitled
to receive any payments of principal, interest or fees from the Borrowers or the
Administrative Agent (or the other Lenders) in respect of its Loans.
(f) Deemed Requests for Advance. Unless payment is otherwise
timely made by the Borrowers, the becoming due of any amount required to be paid
under this Agreement or any of the other Loan Documents as principal, interest,
reimbursement
37
obligations in connection with Letters of Credit, premiums, fees, reimbursable
expenses or other sums payable hereunder shall be deemed irrevocably to be a
Request for Advance on the due date of, and in an aggregate amount required to
pay, such principal, interest, reimbursement obligations in connection with
Letters of Credit, premiums, fees, reimbursable expenses or other sums payable
hereunder, and the proceeds of a Revolving Loan made pursuant thereto may be
disbursed by way of direct payment of the relevant Obligation and shall bear
interest as a Base Rate Advance; provided, however, that the Administrative
Agent shall provide the Administrative Borrower with ten (10) days prior written
notice before making any such Advance that will be made for the purpose of
paying an Obligation other than principal, interest, reimbursement obligations
in connection with Letters of Credit, premiums or fees. The Lenders shall have
no obligation to the Borrowers to honor any deemed Request for Advance under
this Section 2.2(f) unless all the conditions set forth in Section 4.2 have been
satisfied, but, with the consent of the Lenders required under the last sentence
of Section 4.2, may do so in their sole discretion and without regard to the
existence of, and without being deemed to have waived, any Default and without
regard to the existence or creation of an Overadvance or the failure by the
Borrowers to satisfy any of the conditions set forth in Section 4.2. No further
authorization, direction or approval by the Borrowers shall be required to be
given by the Administrative Borrower for any deemed Request for Advance under
this Section 2.2(f). The Administrative Agent shall promptly provide to the
Administrative Borrower written notice of any Advance pursuant to this Section
2.2(f).
(g) Special Provisions Pertaining to Swing Loans.
(i) The Administrative Borrower shall give the Swing Bank
written notice in the form of a Request for Advance, or notice by
telephone, followed immediately by a written request for Advance no
later than 1:00 p.m. (Atlanta, Georgia time) on the date on which the
Borrowers wish to receive an Advance of any Swing Loan, in each case,
with a copy to the Administrative Agent; provided, however, that the
failure by the Administrative Borrower to confirm any notice by
telephone with a written Request for Advance shall not invalidate any
notice so given; provided further, however, that any request by the
Administrative Borrower of a Base Rate Advance under the Revolving Loan
Commitment shall be deemed to be a request for a Swing Loan unless the
Administrative Borrower specifically requests otherwise. Each Swing
Loan shall bear interest at the same rate as a Base Rate Advance. If
the Swing Bank, in its sole discretion, elects to make the requested
Swing Loan, the Advance shall be made on the date specified in the
notice or the Request for Advance and such notice or Request for
Advance shall specify (i) the amount of the requested Advance, and (ii)
instructions for the disbursement of the proceeds of the requested
Advance. Each Swing Loan shall be subject to all the terms and
conditions applicable to Revolving Loans, except that all payments
thereon shall be payable to the Swing Bank solely for its own account.
The Swing Bank shall have no duty or obligation to make any Swing Loans
hereunder. The Swing Bank
38
shall not make any Swing Loans if (i) the Swing Bank has received
written notice from any Lender (or the Swing Bank has actual knowledge)
that one or more applicable conditions precedent set forth in Section
4.2 will not be satisfied on the requested Advance date or (ii) the
requested Swing Loan would exceed Availability on the Advance date. In
the event the Swing Bank in its sole and absolute discretion elects to
make any requested Swing Loan, the Swing Bank shall make the proceeds
of such Swing Loan available to the Borrowers by deposit of Dollars in
same day funds by wire transfer to the Disbursement Account.
(ii) The Swing Bank shall notify the Administrative Agent
and each Lender no less frequently than weekly, as determined by the
Administrative Agent, of the principal amount of Swing Loans
outstanding as of 12:00 noon (Atlanta, Georgia time) as of such date
and each Lender's pro rata share thereof. Each Lender shall before 2:00
p.m. (Atlanta, Georgia time) on such Business Day (the "Settlement
Date") make available to the Administrative Agent, in immediate
available funds, the amount of its pro rata share of such principal
amount of Swing Loans outstanding. Upon such payment by a Lender, such
Lender shall be deemed to have made a Revolving Loan to the Borrowers,
notwithstanding any failure of the Borrowers to satisfy the conditions
in Section 4.2. The Administrative Agent shall use such funds to repay
the principal amount of Swing Loans to the Swing Bank. Additionally, if
at any time any Swing Loans are outstanding, any of the events
described in clauses (g) or (h) of Section 9.1 shall have occurred,
then each Lender shall automatically upon the occurrence of such event
and without any action on the part of the Swing Bank, the Borrowers,
the Administrative Agent or the Lenders be deemed to have purchased an
undivided participation in the principal and interest of all Swing
Loans then outstanding in an amount equal to such Lender's Revolving
Commitment Ratio and each Lender shall, notwithstanding such Event of
Default, immediately pay to the Administrative Agent for the account of
the Swing Bank in immediately available funds, the amount of such
Lender's participation (and upon receipt thereof, the Swing Bank shall
deliver to such Lender a loan participation certificate dated the date
of receipt of such funds in such amount).
Section 2.3 Interest.
(a) On Revolving Loans. Interest on Advances, subject to Section
2.3(b) and (c) shall be payable as follows:
(i) On Base Rate Advances. Interest on each Base Rate
Advance shall be computed for the actual number of days elapsed on the
basis of a hypothetical year of 365 days and shall be payable monthly
in arrears on the second day of each calendar month for the prior
calendar month, commencing on July 2, 2003. Interest on Base Rate
Advances then outstanding shall also be due
39
and payable on the Maturity Date. Interest shall accrue and be payable
on each Base Rate Advance made with respect to the Revolving Loans at
the simple per annum interest rate equal to the sum of (A) the Base
Rate, and (B) the applicable Interest Rate Margin.
(ii) On Eurodollar Advances. Interest on each Eurodollar
Advance shall be computed on the basis of a hypothetical 360-day year
for the actual number of days elapsed and shall be payable in arrears
on (x) the Payment Date for such Advance, and (y) if the Eurodollar
Advance Period for such Advance is greater than three (3) months, on
each three month anniversary of such Advance. Interest on Eurodollar
Advances then outstanding shall also be due and payable on the Maturity
Date. Interest shall accrue and be payable on each Eurodollar Advance
made with respect to the Revolving Loans at a rate per annum equal to
the sum of (A) the Eurodollar Basis applicable to such Eurodollar
Advance, and (B) the applicable Interest Rate Margin.
(iii) If No Notice of Selection of Interest Rate. If the
Administrative Borrower fails to give the Administrative Agent timely
notice of its selection of a Eurodollar Basis, or if for any reason a
determination of a Eurodollar Basis for any Advance is not timely
concluded, the Base Rate shall apply to such Advance. If the
Administrative Borrower fails to elect to continue any Eurodollar
Advance then outstanding prior to the last Payment Date applicable
thereto in accordance with the provisions of Section 2.2, as
applicable, the Base Rate shall apply to such Advance commencing on and
after such Payment Date.
(b) Upon Default. Unless the Majority Lenders shall otherwise
agree in writing (which agreement shall not be deemed to be a waiver of any
Event of Default), upon the occurrence and during the continuance of an Event of
Default, interest on the outstanding Obligations shall accrue at the Default
Rate. Interest accruing at the Default Rate shall be payable on demand and in
any event on the Maturity Date. The Lenders shall not be required to (A)
accelerate the maturity of the Loans, (B) terminate the Revolving Loan
Commitments, or (C) exercise any other rights or remedies under the Loan
Documents in order to charge interest hereunder at the Default Rate.
(c) Interest Rate Margin. The interest rate margin (the "Interest
Rate Margin") shall be that per annum rate of interest determined as set forth
below:
With respect to any Advance under the Revolving Loan Commitment, the
applicable Interest Rate Margin shall be (x) from the Agreement Date
through the date six (6) months following the Agreement Date, 2.50%
with respect to Eurodollar Advances and 1.00% with respect to Base Rate
Advances, and (y) from the date six (6) months and one (1) day
following the Agreement Date and thereafter, the interest rate margin
determined by the Administrative Agent based upon the Fixed Charge
Coverage Ratio as of the fiscal quarter most recently
40
ended for the immediately preceding four (4) fiscal quarter periods
(with respect to which the financial statements referred to below have
been delivered), effective as of the second Business Day after the
financial statements referred to in Section 7.1(b), hereof, and an
accompanying certificate of an Authorized Signatory of the
Administrative Borrower certifying the calculations of the Fixed Charge
Coverage Ratio as set forth in Section 7.3 hereof, are delivered by the
Administrative Borrower to the Administrative Agent and each Lender as
of such fiscal quarter most recently ended, expressed as a per annum
rate of interest as follows:
BASE RATE ADVANCE
(INCLUDING SWING LOANS) EURODOLLAR
INTEREST ADVANCE INTEREST
FIXED CHARGE COVERAGE RATIO RATE MARGIN RATE MARGIN
--------------------------- ----------------------- ----------------
Greater than 2.50 to 1.00 0.25% 1.75%
Greater than 2.00 to 1.00 but less 0.50% 2.00%
than or equal to 2.50 to 1.00
Greater than 1.50 to 1.00 but less 0.75% 2.25%
than or equal to 2.00 to 1.00
Greater than 1.25 to 1.00 but less 1.00% 2.50%
than or equal to 1.50 to 1.00
Less than or equal to 1.25 to 1.00 1.25% 2.75%
In the event that the Administrative Borrower fails to timely provide the
quarterly financial statements and certificate referred to above in accordance
with the terms of Sections 7.1(b) and 7.3, and without prejudice to any
additional rights under Section 9.2, as of the second Business Day after
delivery of such financial statements were due until the date two (2) Business
Days following the date such financial statements and certificate are delivered,
the applicable Interest Rate Margin shall be 2.75% with respect to Eurodollar
Advances and 1.25% with respect to Base Rate Advances.
(d) Computation of Interest. In computing interest on any Advance,
the date of making the Advance shall be included and the date of payment shall
be excluded; provided, however, that if an Advance is repaid on the date that it
is made, one (1) day's interest shall be due with respect to such Advance.
Section 2.4 Fees.
(a) Fee Letter. The Borrowers agree to pay to the Administrative
Agent such fees as are set forth in the Fee Letter.
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(b) Unused Line Fee. The Borrowers agree to pay to the
Administrative Agent for the account of the Lenders, in accordance with their
respective Revolving Commitment Ratios, an unused line fee on the Available
Revolving Loan Commitment (without taking into account any Swing Loans) for each
day from the Agreement Date through the Maturity Date (or the date of any
earlier prepayment in full of the Obligations), (x) from the Agreement Date
through and including the date six (6) months following the Agreement Date, at a
rate of one-half of one percent (0.50%) per annum, and (y) from the date which
is one day after the date six (6) months following the Agreement Date, and
thereafter, the unused line fee as set forth below based upon the Fixed Charge
Coverage Ratio as of the last day of the fiscal quarter most recently ended for
the immediately preceding four (4) fiscal quarter period, effective as of the
second (2nd) Business Day after the quarterly financial statements referred to
in Section 7.1(b) hereof, and an accompanying certificate of an Authorized
Signatory of the Administrative Borrower certifying the calculations of Fixed
Charge Coverage Ratio as set forth in Section 7.3 hereof, are delivered by the
Administrative Borrower to the Administrative Agent and each Lender as of such
fiscal quarter most recently ended, expressed as a per annum rate as follows:
Fixed Charge Coverage Ratio Unused Line Fee
--------------------------- ---------------
Greater than 1.50 to 1.00 0.375%
Less than or equal to 1.50 to 1.00 0.500%
In the event that the Administrative Borrower fails to timely provide the
quarterly financial statements and certificate referred to above in accordance
with the terms of Sections 7.1(b) and 7.3, and without prejudice to any
additional rights under Section 9.2, as of the second Business Day after
delivery of such financial statements were due until the date two (2) Business
Days following the date such financial statements and certificate are delivered,
the applicable unused line fee rate shall be 0.500% per annum. Such unused line
fee shall be computed on the basis of a hypothetical year of 360 days for the
actual number of days elapsed, shall be payable in arrears on July 2, 2003, for
the immediately preceding calendar quarter and thereafter shall be payable
quarterly in arrears on the second day of each calendar quarter thereafter for
the immediately preceding calendar quarter, and if then unpaid, on the Maturity
Date (or the date of any earlier prepayment in full of the Obligations), and
shall be fully earned when due and non-refundable when paid.
(c) Letter of Credit Fees.
(i) The Borrowers shall pay to the Administrative Agent
for the account of the Lenders, in accordance with their respective
Revolving Commitment Ratios, a fee on the stated amount of any
outstanding Letters of Credit for each day from the Date of Issue
through the Maturity Date (or the date of any earlier prepayment in
full of the Obligations) at a rate per annum on the
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amount of the Letter of Credit Obligations equal to the applicable
Interest Rate Margin in effect from time to time with respect to
Eurodollar Advances under the Revolving Loan Commitment. Such Letter of
Credit fee shall be computed on the basis of a hypothetical year of 360
days for the actual number of days elapsed, shall be payable quarterly
in arrears for each calendar quarter on the second day of the
immediately succeeding calendar quarter, commencing on July 2, 2003,
and if then unpaid, on the Maturity Date (or the date of any earlier
prepayment in full of the Obligations), and shall be fully earned when
due and non-refundable when paid.
(ii) The Borrowers shall also pay to the Administrative
Agent, for the account of each applicable Issuing Bank (A) a fee on the
undrawn stated amount of each Letter of Credit issued by or on behalf
of such Issuing Bank for each day from the Date of Issue through the
expiration date of each such Letter of Credit (or any earlier
prepayment in full of the Obligations) at a rate of one-eighth of one
percent (0.1250%) per annum which fee shall be computed on the basis of
a hypothetical year of 360 days for the actual number of days elapsed,
shall be payable quarterly in arrears on the second day of each
calendar quarter for the immediately preceding calendar quarter,
commencing on July 2, 2003, and, if unpaid on the Maturity Date (or any
earlier prepayment in full of the Obligations) and (B) any reasonable
and customary fees charged by the Issuing Banks for issuance and
administration of such Letters of Credit. The foregoing fees shall be
fully earned when due, and non-refundable when paid.
(d) Computation of Fees. In computing any fees payable under this
Section 2.4, the first day of the applicable period shall be included and the
date of the payment shall be excluded.
Section 2.5 Prepayment/Reduction of Commitment.
(a) Prepayment of Advances. The principal amount of any Base Rate
Advance may be prepaid in full or in part at any time, without penalty; and the
principal amount of any Eurodollar Advance may be prepaid prior to the
applicable Payment Date, upon three (3) Business Days' prior written notice to
the Administrative Agent, provided that the Borrowers shall reimburse the
Lenders and the Administrative Agent, on the earlier of demand and the Maturity
Date, for any loss or reasonable out-of-pocket expense incurred by the Lenders
or the Administrative Agent in connection with such prepayment, as set forth in
Section 2.9. Each notice of prepayment shall be irrevocable, and each such
prepayment shall include the accrued interest on the amount so prepaid. Upon
receipt of any notice of prepayment, the Administrative Agent shall promptly
notify each Lender of the contents thereof by telephone or telecopy and of such
Lender's portion of the prepayment. Notwithstanding the foregoing, the Borrowers
shall not make any prepayment of the Revolving Loans unless and until the
balance of the Swing Loans and Agent Advances then outstanding is zero. Other
than with respect to amounts
43
required to be applied to the Revolving Loans pursuant to Section 2.1(d), 2.6(b)
or Section 6.15, and other than with respect to prepayment in full of the
principal amount of the Advances, prepayments of principal hereunder shall be in
minimum amounts of $1,000,000 and integral multiples of $500,000 in excess
thereof. Except as provided in Section 2.5(b), any prepayment of Advances
outstanding under the Revolving Loan Commitment shall not reduce the Revolving
Loan Commitment.
(b) Permanent Prepayment or Reduction. The Borrowers shall have
the right, at any time and from time to time after the Agreement Date and prior
to the Maturity Date, upon at least three (3) Business Days' prior written
notice to the Administrative Agent by the Administrative Borrower, without
premium or penalty, to cancel or reduce permanently all or a portion of the
Revolving Loan Commitment on a pro rata basis among the Lenders in accordance
with their Revolving Commitment Ratios, provided that any such partial reduction
shall be made in an amount not less than $1,000,000 and in integral multiples of
$500,000 in excess thereof. As of the date of cancellation or reduction set
forth in such notice, the Revolving Loan Commitment shall be permanently reduced
to the amount stated in the Administrative Borrower's notice for all purposes
herein, and the Borrowers shall pay to the Administrative Agent for the account
of the Lenders the amount necessary to reduce the principal amount of the
Revolving Loans then outstanding to not more than the amount of the Revolving
Loan Commitment as so reduced, together with accrued interest on the amount so
prepaid and the unused line fee set forth in Section 2.4(b) accrued through the
date of the reduction with respect to the amount reduced, and shall reimburse
the Administrative Agent and the Lenders for any loss or out-of-pocket expense
incurred by any of them in connection with such payment as set forth in Section
2.9.
Section 2.6 Repayment.
(a) The Loans. All unpaid principal and accrued interest on the
Loans shall be due and payable in full on the Maturity Date. Notwithstanding the
foregoing, however, in the event that at any time and for any reason there shall
exist an Overadvance, the Borrowers, in accordance with Section 2.1(d), shall
pay to the Administrative Agent an amount equal to the Overadvance, which
payment shall constitute a mandatory payment of the Obligations to be applied to
the Revolving Loans, Agent Advances, Swing Loans and Letter of Credit Reserve
Account, as appropriate.
(b) Other Mandatory Repayments.
(i) In the event that after the Agreement Date, the
Parent shall issue any Equity Interests (other than Equity Interests
issued to sellers in connection with any acquisition permitted under
Section 8.7(d)) or any Borrower Party shall incur any Total Debt other
than Total Debt permitted under Section 8.1, one hundred percent (100%)
of the Net Cash Proceeds received by such Borrower Party from such
issuance or incurrence shall be paid on the date of receipt of the
proceeds thereof by such Borrower Party to the Lenders as a
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mandatory payment of the Loans. Any payment due hereunder shall be
applied first to repay outstanding Agent Advances, then outstanding
Swing Loans and then to repay outstanding Revolving Loans. Nothing in
this Section shall authorize any Borrower Party to issue any Equity
Interests or incur any Total Debt except as expressly permitted by this
Agreement.
(ii) All Net Cash Proceeds of Collateral (including,
without limitation, from the sale of inventory in the ordinary course
of business, from the sale of other assets permitted under Section
8.7(b) and insurance and condemnation proceeds) shall be remitted to
the Administrative Agent in accordance with Section 6.15 and shall be
applied to the repayment of the Obligations as set forth in Section
2.11.
(c) In addition to the foregoing, the Borrowers hereby promise to
pay all Obligations, including, without limitation, the principal amount of the
Loans and interest and fees thereon, as the same become due and payable
hereunder and, in any event, on the Maturity Date.
Section 2.7 Revolving Loan Notes; Loan Accounts.
(a) The Revolving Loans shall be repayable in accordance with the
terms and provisions set forth herein and, upon request by any Lender, the
Revolving Loans owed to such Lender shall be evidenced by Revolving Loan Notes.
A Revolving Loan Note shall be payable to the order of each Lender requesting
such a Revolving Loan Note in accordance with such Lender's Revolving Commitment
Ratio of the Revolving Loan Commitment. Any such Revolving Loan Notes shall be
issued by the Borrowers to the Lenders and shall be duly executed and delivered
by Authorized Signatories of the Borrowers.
(b) The Administrative Agent shall open and maintain on its books
in the name of the Borrowers a loan account with respect to the Loans and
interest thereon (the "Loan Account"). The Administrative Agent shall debit such
Loan Account for the principal amount of each Advance made by it on behalf of
the Lenders, accrued interest thereon, and all other amounts which shall become
due from the Borrowers pursuant to this Agreement (including any Swing Loans and
Agent Advances) and shall credit the Loan Account for each payment which the
Borrowers shall make in respect to the Obligations. The records of the
Administrative Agent with respect to such Loan Account shall be conclusive
evidence of the Loans and accrued interest thereon, absent manifest error.
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Section 2.8 Manner of Payment.
(a) When Payments Due.
(i) Each payment (including any prepayment) by the
Borrowers on account of the principal of or interest on the Loans, fees, and any
other amount owed to any member of the Lender Group under this Agreement, the
Revolving Loan Notes, or the other Loan Documents shall be made not later than
1:00 p.m. (Atlanta, Georgia time) on the date specified for payment under this
Agreement or any other Loan Document to the Administrative Agent at the
Administrative Agent's Office, for the account of the Lenders, the Issuing Bank
or the Administrative Agent, as the case may be, in lawful money of the United
States of America in immediately available funds. Any payment received by the
Administrative Agent after 1:00 p.m. (Atlanta, Georgia time) shall be deemed
received on the next Business Day. In the case of a payment for the account of a
Lender, the Administrative Agent will promptly thereafter (but in any event no
more than two (2) Business Days following receipt thereof by the Administrative
Agent) distribute the amount so received in like funds to such Lender. If the
Administrative Agent shall not have received any payment from the Borrowers as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly.
(ii) If any payment under this Agreement or any Revolving
Loan Note shall be specified to be made upon a day which is not a Business Day,
it shall be made on the next succeeding day which is a Business Day, and such
extension of time shall in such case be included in computing interest and fees,
if any, in connection with such payment.
(b) No Deduction.
(i) Any and all payments of principal and interest, or of
any fees or indemnity or expense reimbursements by the Borrowers hereunder or
under any other Loan Documents (the "Borrower Payments") shall be made without
setoff or counterclaim and free and clear of and without deduction for any and
all current or future taxes, levies, imposts, deductions, charges or
withholdings with respect to such Borrower Payments and all interest, penalties
or similar liabilities with respect thereto, excluding taxes imposed on the net
income of any member of the Lender Group (or any transferee or assignee thereof)
by the jurisdiction under the laws of which such member of the Lender Group is
organized or conducts business or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges or withholdings and
liabilities collectively or individually "Taxes"). If a Borrower shall be
required to deduct any Taxes from or in respect of any sum payable to any member
of the Lender Group hereunder or under any other Loan Document, (i) the sum
payable shall be increased by the amount (an "additional amount") necessary so
that after
46
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.8(b)(i), such member of the Lender Group shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) such Borrower shall make such deductions, and (iii) such
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law.
(ii) In addition, the Borrowers shall pay to the relevant
Governmental Authority in accordance with Applicable Law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (such taxes being "Other Taxes").
(iii) The Borrowers shall indemnify the members of the
Lender Group for the full amount of Taxes and Other Taxes with respect to
Borrower Payments paid by such Person, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate setting forth and containing an explanation in reasonable detail
of the manner in which such amount shall have been determined and the amount of
such payment or liability prepared by a member of the Lender Group or the
Administrative Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within thirty (30) days after the date the Administrative Agent or such member,
as the case may be, makes written demand therefor. If any Taxes or Other Taxes
for which the Administrative Agent or any member of the Lender Group has
received indemnification from a Borrower hereunder shall be finally determined
to have been incorrectly or illegally asserted and are refunded to the
Administrative Agent or such member, the Administrative Agent or such member, as
the case may be, shall promptly forward to such Borrower any such refunded
amount (after deduction of any Tax or Other Tax paid or payable by any member of
the Lender Group as a result of such refund), not exceeding the increased amount
paid by such Borrower pursuant to this Section 2.8(b).
(iv) As soon as practicable after the date of any payment
of Taxes or Other Taxes by a Borrower to the relevant Governmental Authority,
such Borrower will deliver to the Administrative Agent, at its address, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(v) On or prior to the Agreement Date (or, in the case of
any Lender that becomes a party to this Agreement pursuant to an Assignment and
47
Assumption Agreement, on or prior to the effective date of such Assignment and
Assumption Agreement), each Lender which is organized in a jurisdiction other
than the United States or a political subdivision thereof shall provide each of
the Administrative Agent and the Borrowers with either (a) two (2) properly
executed originals of Form W-8ECI or Form W-8BEN (or any successor forms)
prescribed by the Internal Revenue Service or other documents satisfactory to
the Borrowers and the Administrative Agent, as the case may be, certifying (i)
as to such Lender's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to such Lender
hereunder and under any other Loan Documents or (ii) that all payments to be
made to such Lender hereunder and under any other Loan Documents are subject to
such taxes at a rate reduced to zero by an applicable tax treaty, or (b)(i) a
certificate executed by such Lender certifying that such Lender is not a "bank"
and that such Lender qualifies for the portfolio interest exemption under
Section 881(c) of the Code, and (ii) two (2) properly executed originals of
Internal Revenue Service Form W-8BEN (or any successor form), in each case,
certifying such Lender's entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made hereunder or
under any other Loan Documents. Each such Lender agrees to provide the
Administrative Agent and the Borrowers with new forms prescribed by the Internal
Revenue Service upon the expiration or obsolescence of any previously delivered
form, or after the occurrence of any event requiring a change in the most recent
forms delivered by it to the Administrative Agent and the Borrowers.
(vi) The Borrowers shall not be required to indemnify any
member of the Lender Group that is organized in a jurisdiction other than the
United States or any political subdivision thereof, or to pay any additional
amounts to such Lender pursuant to subsection (b)(i) or (b)(iii) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal, state or local withholding tax existed on the date such Lender became a
party to this Agreement (or, in the case of a transferee, on the effective date
of the Assignment and Assumption Agreement pursuant to which such transferee
became a Lender) or, with respect to payments to a new lending office, the date
such Lender designated such new lending office; provided, however, that this
clause (i) shall not apply to any Lender that became a Lender or new lending
office that became a new lending office as a result of an assignment or
designation made at the request of a Borrower; and provided further, however,
that this clause (i) shall not apply to the extent the indemnity payment or
additional amounts, if any, that any member of the Lender Group through a new
lending office would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the Person making
the assignment or transfer to such member of the Lender Group making the
designation of such new lending office would have been entitled to receive in
the absence of such assignment, transfer or designation or (ii) the obligation
to pay
48
such additional amounts or such indemnity payments would not have
arisen but for a failure by such member of the Lender Group to comply
with the provisions of subsection (b)(v) above.
(vii) Any member of the Lender Group claiming any indemnity
payment or additional amounts payable pursuant to this Section 2.8(b)
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document reasonably requested
in writing by any Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change
would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not,
in the good faith determination of such member of the Lender Group, be
otherwise disadvantageous to such Person.
(viii) Nothing contained in this Section 2.8(b) shall
require any member of the Lender Group to make available to any
Borrower any of its tax returns (or any other information) that it
deems confidential or proprietary.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur
any losses (including losses of anticipated profits) or out-of-pocket expenses
in connection with (a) failure by the Borrowers to borrow or continue any
Eurodollar Advance, or convert any Advance to a Eurodollar Advance, in each
case, after having given notice of their intention to do so in accordance with
Section 2.2 (whether by reason of the election of the Borrowers not to proceed
or the non-fulfillment of any of the conditions set forth in Article 3), or (b)
prepayment of any Eurodollar Advance in whole or in part for any reason or (c)
failure by the Borrowers to prepay any Eurodollar Advance after giving notice of
its intention to prepay such Advance, the Borrowers agree to pay to such Lender,
promptly upon such Lender's written demand therefor, accompanied by a
certificate setting forth in reasonable detail the nature and calculation of
such losses and expenses, an amount sufficient to compensate such Lender for all
such losses and out-of-pocket expenses. Such Lender's good faith determination
of the amount of such losses and out-of-pocket expenses, absent manifest error,
shall be binding and conclusive. Losses subject to reimbursement hereunder shall
include, without limitation, expenses incurred by any Lender or any participant
of such Lender permitted hereunder in connection with the re-employment of funds
prepaid, repaid, not borrowed, or paid, as the case may be, and any lost profit
of such Lender or any participant of such Lender over the remainder of the
Eurodollar Advance Period for such prepaid Advance. For purposes of calculating
amounts payable to a Lender under this paragraph, each Lender shall be deemed to
have actually funded its relevant Eurodollar Advance through the purchase of a
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of that Eurodollar Advance and having a maturity and repricing characteristics
comparable to the relevant Eurodollar Advance Period; provided, however, that
each Lender may fund each of its Eurodollar Advances in any manner it sees fit,
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section.
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Section 2.10 Pro Rata Treatment.
(a) Advances. Each Advance with respect to the Revolving Loans,
from the Lenders under this Agreement shall be made pro rata on the basis of
their respective Revolving Commitment Ratios.
(b) Payments. Each payment and prepayment of the principal of the
Revolving Loans and each payment of interest on the Revolving Loans received
from the Borrowers shall be made by the Administrative Agent to the Lenders pro
rata on the basis of their respective unpaid principal amounts thereof
outstanding immediately prior to such payment or prepayment (except in cases
when a Lender's right to receive payments is restricted pursuant to Section
2.2(e)). If any Lender shall obtain any payment (whether involuntary, through
the exercise of any right of set-off, or otherwise) on account of the Revolving
Loans in excess of its ratable share of the Revolving Loans under its Revolving
Commitment Ratio (or in violation of any restriction set forth in Section
2.2(e)), such Lender shall forthwith purchase from the other Lenders such
participation in the Revolving Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery without interest thereon unless
the Lender obligated to repay such amount is required to pay interest. The
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10(b) may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
Section 2.11 Application of Payments.
(a) Payments Prior to Event of Default. Prior to the occurrence
and continuance of an Event of Default, all amounts received by the
Administrative Agent from the Borrowers (other than payments specifically
earmarked for application to certain principal, interest, fees or expenses
hereunder), shall be distributed by the Administrative Agent in the following
order of priority: FIRST, to the payment of fees and expenses then due and
payable to the Administrative Agent hereunder; SECOND, pro rata to the payment
of any fees and expenses then due and payable to the Lenders and the Issuing
Banks hereunder or under any other Loan Documents; THIRD, to the payment of
interest then due and payable on the Swing Loans, Agent Advances and the
Revolving Loans; FOURTH, to the payment of principal then due and payable on the
Swing Loans and Agent Advances; FIFTH, to the payment of principal then due and
payable on the Revolving Loans; SIXTH, to the payment of Obligations arising in
respect of Bank Products (including, Hedge Agreements) then due to the
Administrative Agent (or any affiliate of the Administrative Agent) or, so long
as Bank of America, N.A. is a
50
Lender hereunder, Bank of America, N.A. (or any Affiliate of Bank of America,
N.A.) and to the payment of Obligations arising in respect of Hedge Agreements
then due to any of the other Lenders (or any Affiliate of any other Lender) from
the Borrowers; and SEVENTH, to the payment of all other Obligations not
otherwise referred to in this Section 2.11(a) then due and payable.
(b) Payments Subsequent to Event of Default. Subsequent to the
occurrence and during the continuance of an Event of Default, payments and
prepayments with respect to the Obligations made to the Administrative Agent,
the Lenders, the Issuing Banks or otherwise received by the Administrative
Agent, any Lender, any Issuing Bank (from realization on Collateral or
otherwise) shall be distributed in the following order of priority (subject, as
applicable, to Section 2.10): FIRST, to the costs and expenses (including
attorneys' fees and expenses), if any, incurred by the Administrative Agent, any
Lender, or any Issuing Bank in the collection of such amounts under this
Agreement or any other Loan Documents, including, without limitation, any costs
incurred in connection with the sale or disposition of any Collateral; SECOND,
to any fees then due and payable to the Administrative Agent under this
Agreement or any other Loan Document; THIRD, pro rata to any fees then due and
payable to the Lenders and the Issuing Banks under this Agreement or any other
Loan Document; FOURTH, pro rata to the payment of interest then due and payable
on the Swing Loans, Agent Advances and the Revolving Loans; FIFTH, pro rata to
(i) the payment of the principal of the Swing Loans and Agent Advances then
outstanding, (ii) the payment of principal on the Revolving Loans then
outstanding and (iii) the Letter of Credit Reserve Account to the extent of one
hundred five percent (105%) of any Letter of Credit Obligations then
outstanding; SIXTH, to the payment of any Obligations arising in respect of Bank
Products then due to the Administrative Agent (or any affiliate of the
Administrative Agent) or any Lender (or any Affiliate of a Lender); SEVENTH, to
any other Obligations not otherwise referred to in this Section 2.11(b); and
EIGHTH, upon satisfaction in full of all Obligations to the Borrowers or as
otherwise required by law.
Section 2.12 Use of Proceeds. The proceeds of the Loans shall be used
by the Borrowers as follows:
(a) The initial Advance of Revolving Loans hereunder shall be used
on the Agreement Date to provide financing related to the acquisition by the
Parent of the Equity Interests of the Target pursuant to the Acquisition
Agreement, to fund transaction fees, costs and expenses and to refinance, in
conjunction with proceeds of other funds received, certain existing indebtedness
of the Borrowers.
(b) The balance of the proceeds of the Loans shall be used to
finance the Borrowers' working capital needs, permitted capital expenditures,
permitted acquisitions and general corporate needs.
Section 2.13 All Obligations to Constitute One Obligation. All
Obligations shall constitute one general obligation of the Borrowers and shall
be secured by the
51
Administrative Agent's security interest (on behalf of, and for the benefit of,
the Lender Group) and Lien upon all of the Collateral, and by all other security
interests and Liens heretofore, now or at any time hereafter granted by any
Borrower Party to the Administrative Agent or any other member of the Lender
Group, to the extent provided in the Security Documents under which such Liens
arise.
Section 2.14 Maximum Rate of Interest. The Borrowers and the Lender
Group hereby agree and stipulate that the only charges imposed upon the
Borrowers for the use of money in connection with this Agreement are and shall
be the specific interest and fees described in this Article 2 and in any other
Loan Document. Notwithstanding the foregoing, the Borrowers and the Lender Group
further agree and stipulate that all closing fees, agency fees, syndication
fees, facility fees, underwriting fees, default charges, late charges, funding
or "breakage" charges, increased cost charges, attorneys' fees and reimbursement
for costs and expenses paid by any member of the Lender Group to third parties
or for damages incurred by the Lender Group or any of them are charges to
compensate the Lender Group for underwriting and administrative services and
costs or losses performed or incurred, and to be performed and incurred, by the
Lender Group in connection with this Agreement and the other Loan Documents and
shall under no circumstances be deemed to be charges for the use of money
pursuant to any Applicable Law. In no event shall the amount of interest and
other charges for the use of money payable under this Agreement exceed the
maximum amounts permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. The Borrowers and the Lender
Group, in executing and delivering this Agreement, intend legally to agree upon
the rate or rates of interest and other charges for the use of money and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if the amount of such interest and other
charges for the use of money or manner of payment exceeds the maximum amount
allowable under applicable law, then, ipso facto as of the date of this
Agreement, the Borrowers are and shall be liable only for the payment of such
maximum as allowed by law, and payment received from the Borrowers in excess of
such legal maximum, whenever received, shall be applied to reduce the principal
balance of the Revolving Loans to the extent of such excess.
Section 2.15 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, each
Issuing Bank, on behalf of the Lenders, and in reliance on the agreements of the
Lenders set forth in Section 2.15(c) below, hereby agrees to issue (or arrange
with a Foreign Issuer for the issuance of) one or more Letters of Credit up to
an aggregate face amount equal to such Issuing Bank's share of the Letter of
Credit Commitment as set forth on Schedule 1(b) or any applicable Assignment and
Assumption Agreements; provided, however, that except as described in the last
sentence of Section 4.3, the Issuing Banks shall not issue (or arrange with a
Foreign Issuer for the issuance of) any Letter of Credit unless the conditions
precedent to the issuance thereof set forth in Section 4.3 have been satisfied,
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and, except as described in the last sentence of Section 4.3, shall not issue
(or arrange with a Foreign Issuer for the issuance of) any Letter of Credit if
any Default then exists or would be caused thereby or if, after giving effect to
such issuance, there would exist an Overadvance; and provided further, however,
that at no time shall the total Letter of Credit Obligations outstanding
hereunder exceed the Aggregate Letter of Credit Commitment. Each Letter of
Credit shall (1) be denominated in Dollars, and (2) expire no later than the
earlier to occur of (A) the date thirty (30) days prior to the Maturity Date,
and (B) 365 days after its date of issuance (but may contain provisions for
automatic renewal provided that no Default exists on the renewal date or would
be caused by such renewal and provided no such renewal shall extend beyond the
date thirty (30) days prior to the Maturity Date). Each Letter of Credit shall
be subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of New York. None of the Issuing Banks shall at any time
be obligated to issue, or to cause to be issued, any Letter of Credit if such
issuance would conflict with, or cause such Issuing Bank to exceed any limits
imposed by, any Applicable Law. Without limiting the generality of the
foregoing, each of the letters of credit set forth on Schedule 2.15 (each, an
"Existing Letter of Credit") shall be deemed to constitute a Letter of Credit
issued hereunder on the Agreement Date and shall thereafter be subject to each
of the terms and conditions of this Agreement and other Loan Documents.
(b) The Administrative Borrower on behalf of the Borrowers may
from time to time request that an Issuing Bank issue (or arrange with a Foreign
Issuer for the issuance of) a Letter of Credit, increase the stated amount of a
Letter of Credit or extend the expiration date of any Letter of Credit;
provided, however, that only a Standby Letter of Credit Issuer shall issue
Standby Letters of Credit hereunder. The Administrative Borrower on behalf of
the Borrowers shall execute and deliver to the Administrative Agent and
applicable Issuing Bank a Request for Issuance of Letter of Credit (i) for each
Standby Letter of Credit to be issued (or amended) by such Issuing Bank, not
later than 12:00 noon (Atlanta, Georgia time) on the third (3rd) Business Day
preceding the date on which such requested Standby Letter of Credit is to be
issued (or amended), and (ii) for each Commercial Letter of Credit to be issued
(or amended) by such Issuing Bank, (x) not later than 2:00 p.m. (Atlanta,
Georgia time) one (1) Business Day preceding the date on which such requested
Commercial Letter of Credit is to be issued (or amended) or (y) with respect to
requests for Commercial Letters of Credit in an aggregate stated amount not to
exceed $750,000 in any day (from 12:00 a.m. until 11:59 p.m., Atlanta, Georgia
time), not later than 10:00 a.m. (at the location of the office where the
applicable Letter of Credit is to be issued) on the Business Day on which such
requested Commercial Letter of Credit is to be issued, or, in each case under
clauses (i) and (ii) above, such shorter notice as may be acceptable to the
applicable Issuing Bank and the Administrative Agent. Each Business Day on which
a Request for Issuance of Letter of Credit is delivered to the Administrative
Agent and on or before 3:00 p.m. (Atlanta, Georgia time) on such Business Day,
the Administrative Agent shall determine whether there is sufficient
Availability, after giving effect to the requirements of Section 4.3(c), for the
issuance of such Letter of Credit and shall notify the applicable Issuing Banks
of the
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same; provided, however, that with respect to any Request for Issuance of Letter
of Credit for a Commercial Letter of Credit under clause (y) above, the
applicable Issuing Bank shall not be required to obtain confirmation from the
Administrative Agent of sufficient Availability prior to issuing such Commercial
Letter of Credit requested but rather shall be entitled to rely on the
certifications given by the Administrative Borrower pursuant to Section 4.3 and
the applicable Request for Issuance of Letter of Credit. Unless an Issuing Bank
has received notice from a Lender or the Administrative Agent that a Default
exists or unless such Issuing Bank has actual knowledge that a Default exists
and except as set forth in the immediately preceding sentence of this Section,
such Issuing Bank shall be entitled to rely on the certifications of the
Administrative Borrower pursuant to Section 4.3 and the applicable Request for
Issuance of Letter of Credit to determine whether the conditions to issuance of
any Letter of Credit have been satisfied. Upon receipt of any such Request for
Issuance of Letter of Credit, subject to satisfaction (or waiver in accordance
with the last sentence of Section 4.3) of all conditions precedent thereto as
set forth in Section 4.3 and receipt of a notification from the Administrative
Agent that sufficient Availability, after giving effect to the requirements of
Section 4.3(c), exists for the issuance of such Letter of Credit, the applicable
Issuing Bank shall process such Request for Issuance of Letter of Credit and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue (or amend) (or arrange with a Foreign Issuer for the issuance of)
the Letter of Credit requested thereby. Such Issuing Bank shall furnish a copy
of such Letter of Credit to the Administrative Borrower and the Administrative
Agent following the issuance thereof. In addition to the fees payable pursuant
to Section 2.4(c)(ii) the Borrowers shall pay or reimburse each Issuing Bank for
normal and customary costs and expenses incurred by such Issuing Bank in
issuing, causing the issuance of, effecting payment under, amending or otherwise
administering the Letters of Credit. On each Business Day on or before 10:00
a.m. (Atlanta, Georgia time) each Issuing Bank shall deliver to the
Administrative Agent and the Administrative Borrower a report in substantially
the form of Exhibit O (a "Daily Letter of Credit Report") (A) setting forth the
opening balance of its Letters of Credit outstanding on the immediately
preceding Business Day, (B) identifying all Letters of Credit issued (or
amended) by it (or its Foreign Issuer) on such immediately preceding Business
Day, (C) identifying all Letters of Credit cancelled on such immediately
preceding Business Day, (D) identifying all draws on such immediately preceding
Business Day under Letters of Credit issued by it (or its Foreign Issuer), (E)
setting forth the ending balance of its Letters of Credit outstanding on such
immediately preceding Business Day and (E) identifying all requests for the
issuance of Letters of Credit cancelled on such immediately preceding Business
Day.
(c) Immediately upon the issuance (or amendment) by (or on behalf
of) an Issuing Bank of a Letter of Credit and in accordance with the terms and
conditions of this Agreement, such Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an
54
undivided interest and participation, to the extent of such Lender's Revolving
Commitment Ratio, in such Letter of Credit (as applicable, as amended) and the
obligations of the Borrowers with respect thereto (including, without
limitation, all Letter of Credit Obligations with respect thereto). The
applicable Issuing Bank shall promptly notify the Administrative Agent of any
such draw under a Letter of Credit. At such time as the Administrative Agent
shall be notified by the Issuing Bank that the beneficiary under any Letter of
Credit has drawn on the same, the Administrative Agent shall promptly notify the
Borrowers and the Swing Bank (or, at its option, all Lenders), by telephone or
telecopy, of the amount of the draw (and, in the case of each Lender, such
Lender's portion of such draw amount as calculated in accordance with its
Revolving Commitment Ratio).
(d) The Borrowers hereby agree to immediately reimburse each
Issuing Bank for amounts paid by such Issuing Bank in respect of draws under
each Letter of Credit. In order to facilitate such repayment, the Borrowers
hereby irrevocably request the Lenders, and the Lenders hereby severally agree,
on the terms and conditions of this Agreement (other than as provided in Article
2 with respect to the amounts of, the timing of requests for, and the repayment
of Advances hereunder and in Article 4 with respect to conditions precedent to
Advances hereunder), with respect to any drawing under a Letter of Credit, to
make a Base Rate Advance on each day on which a draw is funded under any Letter
of Credit and in the amount of such draw, and to pay the proceeds of such
Advance directly to the applicable Issuing Bank to reimburse such Issuing Bank
for the amount paid by it upon such draw. Each Lender shall pay its share of
such Base Rate Advance by paying its portion of such Advance to the
Administrative Agent in accordance with Section 2.2(e) and its Revolving
Commitment Ratio, without reduction for any set-off or counterclaim of any
nature whatsoever and regardless of whether any Default then exists or would be
caused thereby. The disbursement of funds in connection with a draw under a
Letter of Credit pursuant to this Section hereunder shall be subject to the
terms and conditions of Section 2.2(e). The obligation of each Lender to make
payments to the Administrative Agent for the account of an Issuing Bank in
accordance with this Section 2.15 shall be absolute and unconditional, and no
Lender shall be relieved of its obligations to make such payments by reason of
noncompliance by any other Person with the terms of the Letter of Credit or for
any other reason (other than the gross negligence or willful misconduct of such
Issuing Bank (or Foreign Issuer) in paying such Letter of Credit, as determined
by a final non-appealable judgment of a court of competent jurisdiction). The
Administrative Agent shall promptly remit to such Issuing Bank the amounts so
received from the other Lenders. Any overdue amounts payable by the Lenders to
an Issuing Bank in respect of a draw under any Letter of Credit shall bear
interest, payable on demand, (x) for the first two (2) Business Days, at the
Federal Funds Rate and (y) thereafter, at the Base Rate. Notwithstanding the
foregoing, at the request of the Administrative Agent the Swing Bank may, at its
option and subject to the conditions set forth in Section 2.2(g), make Swing
Loans to reimburse Issuing Banks for amounts drawn under Letters of Credit.
55
(e) The Borrowers agree that each Advance by the Lenders to
reimburse an Issuing Bank for draws under any Letter of Credit, shall, for all
purposes hereunder unless and until converted into Eurodollar Advances pursuant
to Section 2.2(b)(ii), be deemed to be a Base Rate Advance under the Revolving
Loan Commitment and shall be payable and bear interest in accordance with all
other Base Rate Advances.
(f) The Borrowers agree that any action taken or omitted to be
taken by an Issuing Bank in connection with any Letter of Credit, except for
such actions or omissions as shall constitute gross negligence or willful
misconduct on the part of such Issuing Bank as determined by a final
non-appealable judgment of a court of competent jurisdiction, shall be binding
on the Borrowers as between the Borrowers and such Issuing Bank, and shall not
result in any liability of such Issuing Bank to the Borrowers. The obligation of
the Borrowers to reimburse an Issuing Bank for a drawing under any Letter of
Credit or the Lenders for Advances made by them to the Issuing Banks on account
of draws made under the Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances whatsoever, including, without limitation, the
following circumstances:
(i) Any lack of validity or enforceability of any Loan
Document;
(ii) Any amendment or waiver of or consent to any
departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of
Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any
right which the Borrowers may have at any time against any beneficiary
or any transferee of any Letter of Credit (or Persons for whom any such
beneficiary or any such transferee may be acting), any Lender or any
other Person, whether in connection with any Letter of Credit, any
transaction contemplated by any Letter of Credit, this Agreement, or
any other Loan Document, or any unrelated transaction;
(v) Any statement or any other documents presented under
any Letter of Credit proving to be insufficient, forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(vi) The insolvency of any Person issuing any documents in
connection with any Letter of Credit;
56
(vii) Any breach of any agreement between the Borrowers and
any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect to
which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
wireless or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission,
insolvency or failure of business of any of the correspondents of or
Foreign Issuer for the applicable Issuing Bank (other than the gross
negligence or willful misconduct of any such Foreign Issuer or
correspondent);
(xi) Any other circumstances arising from causes beyond
the control of the applicable Issuing Bank;
(xii) Payment by an Issuing Bank (or Foreign Issuer) under
any Letter of Credit against presentation of a sight draft or a
certificate which does not comply with the terms of such Letter of
Credit, provided that such payment shall not have constituted gross
negligence or willful misconduct of such Issuing Bank (or Foreign
Issuer) as determined by a final non-appealable judgment of a court of
competent jurisdiction; and
(xiii) Any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
(g) The Borrowers will indemnify and hold harmless each member of
the Lender Group and each of their respective employees, representatives,
officers and directors from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys' fees) which may be imposed on, incurred by or asserted against such
member of the Lender Group in any way relating to or arising out of the issuance
of a Letter of Credit, except that the Borrowers shall not be liable to any
member of the Lender Group for any portion of such claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the gross negligence or willful
misconduct of such member of the Lender Group, as determined by a final
non-appealable judgment of a court of competent jurisdiction. This Section
2.15(g) shall survive termination of this Agreement.
(h) Each Lender shall be responsible (to the extent the applicable
Issuing Bank is not reimbursed by the Borrowers) for its pro rata share (based
on such Lender's Revolving Commitment Ratio) of any and all reasonable
out-of-pocket costs, expenses
57
(including reasonable legal fees) and disbursements which may be incurred or
made by such Issuing Bank in connection with the collection of any amounts due
under, the administration of, or the presentation or enforcement of any rights
conferred by any Letter of Credit, the Borrowers' or any guarantor's obligations
to reimburse draws thereunder or otherwise. In the event the Borrowers shall
fail to pay such expenses of an Issuing Bank within fifteen (15) days of demand
for payment by such Issuing Bank, each Lender shall thereupon pay to such
Issuing Bank its pro rata share (based on such Lender's Revolving Commitment
Ratio) of such expenses within ten (10) days from the date of such Issuing
Bank's notice to the Lenders of the Borrowers' failure to pay; provided,
however, that if the Borrowers shall thereafter pay such expenses, such Issuing
Bank will repay to each Lender the amounts received from such Lender hereunder.
(i) Any Person that is to be a new Issuing Bank (that does not
execute an Assignment and Assumption Agreement) is required to enter into this
Agreement by executing and delivering to the Administrative Agent a joinder
agreement, in form and substance reasonably satisfactory to the Administrative
Agent and, so long as no Default exists, the Administrative Borrower (each, an
"Issuing Bank Joinder Agreement"). Upon the execution and delivery of an Issuing
Bank Joinder Agreement by such Person, such Person shall become an Issuing Bank
hereunder with the same force and effect as if originally named as an Issuing
Bank herein. The execution and delivery of any Issuing Bank Joinder Agreement
adding an additional Person as a party to this Agreement shall not require the
consent of any other party hereto.
Section 2.16 Bank Products. Any Borrower Party may request and the
Administrative Agent, so long as Bank of America, N.A. is a Lender hereunder,
Bank of America, N.A. or, with respect to Hedge Agreements, any Lender may, in
its sole and absolute discretion, arrange for such Borrower Party to obtain from
such Person or any Affiliate of such Person, as applicable, Bank Products
although no Borrower Party is required to do so. If any Bank Products are
provided by an Affiliate of the Administrative Agent, so long as Bank of
America, N.A. is a Lender hereunder, an Affiliate of Bank of America, N.A. or,
with respect to Hedge Agreements, any Affiliate of a Lender, the Borrower
Parties agree to indemnify and hold the Lender Group, or any of them, harmless
from any and all costs and obligations now or hereafter incurred by the Lender
Group, or any of them, which arise from any indemnity given by the
Administrative Agent to any of its Affiliates, so long as Bank of America, N.A.
is a Lender hereunder, Bank of America, N.A. to any of its Affiliates or any
Lender to any of its Affiliates, as applicable, related to such Bank Products;
provided, however, nothing contained herein is intended to limit the Borrower
Parties' rights, with respect to the Administrative Agent or any of its
Affiliates, Bank of America, N.A. or any of its Affiliates or any Lender or any
of its Affiliates, as applicable, if any, which arise as a result of the
execution of documents by and between the Borrower Parties and such Person which
relate to Bank Products. The agreement contained in this Section shall survive
termination of this Agreement. The Borrower Parties acknowledge and agree that
the obtaining of Bank Products from the Administrative Agent, Bank of America,
58
N.A. or any Lender or any of their respective Affiliates (a) is in the sole and
absolute discretion of the Administrative Agent, Bank of America, N.A. or such
Affiliates, and (b) is subject to all rules and regulations of the
Administrative Agent, Bank of America, N.A., such Lender or such Affiliates.
ARTICLE 3.
GUARANTY
Section 3.1 Guaranty
(a) Each Guarantor hereby guarantees to the Administrative Agent,
for the benefit of the Lender Group, the full and prompt payment of the
Obligations, including, without limitation, any interest therein (including,
without limitation, interest as provided in this Agreement, accruing after the
filing of a petition initiating any insolvency proceedings, whether or not such
interest accrues or is recoverable against the Borrowers after the filing of
such petition for purposes of the Bankruptcy Code or is an allowed claim in such
proceeding), plus reasonable attorneys' fees and expenses if the obligations
represented by this Guaranty are collected by law, through an attorney-at-law,
or under advice therefrom.
(b) Regardless of whether any proposed guarantor or any other
Person shall become in any other way responsible to the Lender Group, or any of
them, for or in respect of the Obligations or any part thereof, and regardless
of whether or not any Person now or hereafter responsible to the Lender Group,
or any of them, for the Obligations or any part thereof, whether under this
Guaranty or otherwise, shall cease to be so liable, each Guarantor hereby
declares and agrees that this Guaranty shall be a joint and several obligation,
shall be a continuing guaranty and shall be operative and binding until the
Obligations shall have been indefeasibly paid in full in cash (or in the case of
Letter of Credit Obligations, secured through delivery of cash collateral in an
amount equal to one hundred and five percent (105%) of the Letter of Credit
Obligations) and the Revolving Loan Commitments shall have been terminated.
(c) Each Guarantor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense (other than the defense of
payment in cash in full, to the extent of its obligations hereunder, or a
defense that such Guarantor's liability is limited as provided in Section
3.1(g)), set-off, counterclaim or cross-claim of any nature whatsoever with
respect to this Guaranty or the obligations of the Guarantors under this
Guaranty or the obligations of any other Person or party (including, without
limitation, the Borrowers) relating to this Guaranty or the obligations of any
of the Guarantors under this Guaranty or otherwise with respect to the
Obligations in any action or proceeding brought by the Administrative Agent or
any other member of the Lender Group to collect the Obligations or any portion
thereof, or to enforce the obligations of any of the Guarantors under this
Guaranty.
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(d) The Lender Group, or any of them, may from time to time,
without exonerating or releasing any Guarantor in any way under this Guaranty,
(i) take such further or other security or securities for the Obligations or any
part thereof as they may deem proper, or (ii) release, discharge, abandon or
otherwise deal with or fail to deal with any guarantor of the Obligations or any
security or securities therefor or any part thereof now or hereafter held by the
Lender Group, or any of them, or (iii) amend, modify, extend, accelerate or
waive in any manner any of the provisions, terms, or conditions of the Loan
Documents, all as they may consider expedient or appropriate in their sole
discretion. Without limiting the generality of the foregoing, or of Section
3.1(e), it is understood that the Lender Group, or any of them, may, without
exonerating or releasing any Guarantor, give up, modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept or
make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, and with or without notice, all as such
Person may deem expedient.
(e) Each Guarantor acknowledges and agrees that no change in the
nature or terms of the Obligations or any of the Loan Documents, or other
agreements, instruments or contracts evidencing, related to or attendant with
the Obligations (including any novation), shall discharge all or any part of the
liabilities and obligations of such Guarantor pursuant to this Guaranty; it
being the purpose and intent of the Guarantors and the Lender Group that the
covenants, agreements and all liabilities and obligations of each Guarantor
hereunder are absolute, unconditional and irrevocable under any and all
circumstances. Without limiting the generality of the foregoing, each Guarantor
agrees that until each and every one of the covenants and agreements of this
Guaranty is fully performed, and without possibility of recourse, whether by
operation of law or otherwise, such Guarantor's undertakings hereunder shall not
be released, in whole or in part, by any action or thing which might, but for
this paragraph of this Guaranty, be deemed a legal or equitable discharge of a
surety or guarantor, or by reason of any waiver, omission of the Lender Group,
or any of them, or their failure to proceed promptly or otherwise, or by reason
of any action taken or omitted by the Lender Group, or any of them, whether or
not such action or failure to act varies or increases the risk of, or affects
the rights or remedies of, such Guarantor or by reason of any further dealings
among the Borrowers, on the one hand, and any member of the Lender Group, on the
other hand, or any other guarantor or surety, and such Guarantor hereby
expressly waives and surrenders any defense to its liability hereunder, or any
right of counterclaim or offset of any nature or description which it may have
or may exist based upon, and shall be deemed to have consented to, any of the
foregoing acts, omissions, things, agreements or waivers.
(f) The Lender Group, or any of them, may, without demand or
notice of any kind upon or to any Guarantor, at any time or from time to time
when any amount shall be due and payable hereunder by any Guarantor, if the
Borrowers shall not have timely paid any of the Obligations (or in the case of
Letter of Credit Obligations, secured through delivery of cash collateral in an
amount equal to one hundred and five percent (105%) of the Letter of Credit
Obligations), set-off and appropriate and apply to any
60
portion of the Obligations hereby guaranteed, and in such order of application
as the Administrative Agent may from time to time elect in accordance with this
Agreement, any deposits, property, balances, credit accounts or moneys of any
Guarantor in the possession of any member of the Lender Group or under their
respective control for any purpose. If and to the extent that any Guarantor
makes any payment to the Administrative Agent or any other Person pursuant to or
in respect of this Guaranty, any claim which such Guarantor may have against the
Borrowers by reason thereof shall be subject and subordinate to the prior
payment in full of the Obligations to the satisfaction of the Lender Group.
(g) The creation or existence from time to time of Obligations in
excess of the amount committed to or outstanding on the date of this Guaranty is
hereby authorized, without notice to any Guarantor, and shall in no way impair
or affect this Guaranty or the rights of the Lender Group herein. It is the
intention of each Guarantor and the Administrative Agent that each Guarantor's
obligations hereunder shall be, but not in excess of, the Maximum Guaranteed
Amount (as herein defined). The "Maximum Guaranteed Amount" with respect to any
Guarantor, shall mean the maximum amount which could be paid by such Guarantor
without rendering this Guaranty void or voidable as would otherwise be held or
determined by a court of competent jurisdiction in any action or proceeding
involving any state or Federal bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to the
insolvency of debtors.
(h) Upon the bankruptcy or winding up or other distribution of
assets of any Borrower, or of any surety or guarantor (other than the applicable
Guarantor) for any Obligations of the Borrowers to the Lender Group, or any of
them, the rights of the Administrative Agent against any Guarantor shall not be
affected or impaired by the omission of any member of the Lender Group to prove
its claim, or to prove the full claim, as appropriate, against such Borrower, or
any such other guarantor or surety, and the Administrative Agent may prove such
claims as it sees fit and may refrain from proving any claim and in its
discretion may value as it sees fit or refrain from valuing any security held by
it without in any way releasing, reducing or otherwise affecting the liability
to the Lender Group of each of the Guarantors.
(i) Each Guarantor hereby absolutely, unconditionally and
irrevocably expressly waives, except to the extent such waiver would be
expressly prohibited by applicable law, the following: (i) notice of acceptance
of this Guaranty, (ii) notice of the existence or creation of all or any of the
Obligations, (iii) presentment, demand, notice of dishonor, protest and all
other notices whatsoever (other than notices expressly required hereunder or
under any other Loan Document to which any Guarantor is a party), (iv) all
diligence in collection or protection of or realization upon the Obligations or
any part thereof, any obligation hereunder, or any security for any of the
foregoing, (v) all rights to enforce any remedy which the Lender Group, or any
of them, may have against the Borrowers, and (vi) until the Obligations shall
have been paid in full in cash (or in the
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case of Letter of Credit Obligations, secured through delivery of cash
collateral in an amount equal to one hundred and five percent (105%) of the
Letter of Credit Obligations), all rights of subrogation, indemnification,
contribution and reimbursement from the Borrowers for amounts paid hereunder and
any benefit of, or right to participate in, any collateral or security now or
hereinafter held by the Lender Group, or any of them, in respect of the
Obligations. If a claim is ever made upon any member of the Lender Group for the
repayment or recovery of any amount or amounts received by such Person in
payment of any of the Obligations and such Person repays all or part of such
amount by reason of (x) any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or any of its property,
or (y) any settlement or compromise of any such claim effected by such Person
with any such claimant, including a Borrower, then in such event each Guarantor
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or the
cancellation of any promissory note or other instrument evidencing any of the
Obligations, and such Guarantor shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.
(j) This Guaranty is a continuing guaranty of the Obligations and
all liabilities to which it applies or may apply under the terms hereof and
shall be conclusively presumed to have been created in reliance hereon. No
failure or delay by any member of the Lender Group in the exercise of any right,
power, privilege or remedy shall operate as a waiver thereof, and no single or
partial exercise by the Administrative Agent of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy and no course of dealing between any Guarantor and any member of the
Lender Group shall operate as a waiver thereof. No action by any member of the
Lender Group permitted hereunder shall in any way impair or affect this
Guaranty. For the purpose of this Guaranty, the Obligations shall include,
without limitation, all Obligations of the Borrowers to the Lender Group,
notwithstanding any right or power of any third party, individually or in the
name of any Borrower and the Lender Group, or any of them, to assert any claim
or defense as to the invalidity or unenforceability of any such Obligation, and
no such claim or defense shall impair or affect the obligations of any Guarantor
hereunder.
(k) This is a guaranty of payment and not of collection. In the
event the Administrative Agent makes a demand upon any Guarantor in accordance
with the terms of this Guaranty, such Guarantor shall be held and bound to the
Administrative Agent directly as debtor in respect of the payment of the amounts
hereby guaranteed. All costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred by the Administrative Agent in
obtaining performance of or collecting payments due under this Guaranty shall be
deemed part of the Obligations guaranteed hereby.
(l) Each Guarantor is a direct or indirect wholly owned Domestic
Subsidiary of a Borrower. Each Guarantor expressly represents and acknowledges
that any financial
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accommodations by the Lender Group to any Borrower, including, without
limitation, the extension of credit, are and will be of direct interest, benefit
and advantage to such Guarantor.
(m) The Guarantors hereby agree, among themselves, that if any
Guarantor shall become an Excess Funding Guarantor (as defined below) by reason
of the payment by such Guarantor of any Obligations, each other Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Guarantor's Pro
Rata Share (as defined below and determined, for this purpose, without reference
to the properties, debts and liabilities of such Excess Funding Guarantor) of
the Excess Payment (as defined below) in respect of such Obligations. The
payment obligation of a Guarantor to any Excess Funding Guarantor under this
Section 3.1(m) shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Guarantor under the other provisions
of this Guaranty, and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until payment and satisfaction in full of
all such obligations. For purposes of this Section 3.1(m), (i) "Excess Funding
Guarantor" shall mean, in respect of any Obligations, a Guarantor that has paid
an amount in excess of its Pro Rata Share of such Obligations, (ii) "Excess
Payment" shall mean, in respect of any Obligations, the amount paid by an Excess
Funding Guarantor in excess of its Pro Rata Share of such Obligations and (iii)
"Pro Rata Share" shall mean, for any Guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate present fair saleable value
of all properties of such Guarantor (excluding any shares of stock of any other
Guarantor) exceeds the amount of all the debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been guaranteed by such Guarantor) to (y)
the amount by which the aggregate fair saleable value of all properties of the
Borrowers and all of the Guarantors exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of the Borrowers and the Guarantors
hereunder) of the Borrowers and all of the Guarantors, all as of the Agreement
Date.
(n) Pursuant to Section 6.21 of this Agreement, any new Domestic
Subsidiary (whether by creation or designation) is required to enter into this
Agreement by executing and delivering to the Administrative Agent a Guaranty
Supplement. Upon the execution and delivery of a Guaranty Supplement by such new
Domestic Subsidiary, such Domestic Subsidiary shall become a Guarantor and
Borrower Party hereunder with the same force and effect as if originally named
as a Guarantor or Borrower Party herein. The execution and delivery of any
Guaranty Supplement adding an additional Guarantor as a party to this Agreement
shall not require the consent of any other party hereto. The rights and
obligations of each party hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor hereunder.
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ARTICLE 4.
CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Initial Advance. The obligations of
the Lenders to undertake the Revolving Loan Commitment and to make the initial
Advance hereunder, and the obligation of the Issuing Banks to issue (or arrange
with a Foreign Issuer the issuance of) the initial Letter of Credit hereunder,
are subject to the prior fulfillment of each of the following conditions:
(a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Agents and the other
members of the Lender Group:
(i) This duly executed Agreement;
(ii) A duly executed Revolving Loan Note to the order of
each Lender requesting a promissory note in the amount of such Lender's
Revolving Commitment Ratio of the Revolving Loan Commitment;
(iii) The Pledge Agreement duly executed by each Borrower
Party pledging one hundred percent (100%) of the Equity Interests owned
by such Borrower Party in any Domestic Subsidiary and a minimum of
sixty five percent (65%) of the Equity Interests owned by such Borrower
Party in any Foreign Subsidiary, together with stock certificates
representing all of the certificated Equity Interests pledged as
security thereunder and stock powers with respect thereto duly endorsed
in blank and Uniform Commercial Code financing statements, as
applicable, related to all of the Equity Interests pledged as security
thereunder;
(iv) The Security Agreement duly executed by each Borrower
Party, together with Uniform Commercial Code financing statements
related thereto;
(v) The Intellectual Property Security Agreement duly
executed by each Borrower Party;
(vi) The Assignment of Rights under Acquisition Agreement
duly executed by the Parent, the Target and acknowledged by the
Sellers;
(vii) Each factor of Accounts under the factoring
arrangements described in Schedule 8.7 shall have executed a Factoring
Intercreditor Agreement,
(viii) The Fee Letter duly executed by the Borrowers;
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(ix) The Mortgages duly executed by the applicable
Borrower Parties, encumbering each Borrower Party's fee interest in the
real property listed on Schedule 5.1(w)-2 (other than the
Administrative Borrower's real property located in Greenville, Georgia,
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ in Vidalia, Georgia, at lots 34 and 35 in Gaffney,
South Carolina and at ▇▇▇▇ ▇▇▇▇▇▇ in Gaffney, South Carolina), together
with delivery to the Administrative Agent of: (w) title insurance
commitments (the "Title Insurance Commitments"), each issued by Lawyers
Title Insurance Corporation or another title company acceptable to each
of the Agents in such form and amount as is acceptable to each of the
Agents insuring that each Mortgage is a valid first priority Lien on
the applicable Borrower Party's interest in the real property subject
only to such exceptions to title as shall be acceptable to each of the
Agents in their discretion and containing such endorsements and
affirmative insurance as the Agents may require and as are available in
the jurisdiction in which the relevant property is located, and true
copies of each document, instrument or certificate required by the
terms of each such policy and/or Mortgage to be filed, recorded,
executed or delivered in connection therewith; (x) duly authorized
Uniform Commercial Code financing statements under the applicable
Uniform Commercial Code, or other filings under applicable law, to be
filed in connection with each Mortgage in form and substance
satisfactory to each of the Agents to perfect the Lien created by each
Mortgage; (y) a current survey of the real property encumbered by each
Mortgage, certified to the title company, the Lender Group and each of
their successors and assigns, in form and content satisfactory to each
of the Agents and prepared by a professional and properly licensed land
surveyor satisfactory to each of the Agents and (z) local counsel
opinions with respect to each Mortgage in form and substance
satisfactory to each of the Agents.
(x) An environmental review and audit report (including
phase I and, as determined necessary by the Agents, phase II
environmental reports) with respect to each parcel of Eligible Real
Estate, together with a reliance letter in favor of the Lender Group,
in each case, satisfactory in all respects to each of the Agents from
EMG or another independent firm acceptable to the Administrative Agent
(including without limitation any Phase I and, as determined necessary
by the Agents, Phase II environmental reports prepared by EMG),
together with copies of all existing environmental reviews and audits
and other information pertaining to actual or potential environmental
claims as the Agents may require.
(xi) Appraisals in form and substance satisfactory to each
of the Agents reflecting values of the Borrower Parties' interest in
real property and Inventory at levels acceptable to each of the Agents
from appraisers acceptable to each of the Agents (including without
limitation, appraisals of inventory from Hilco Appraisal Services, LLC,
appraisals of real property from Land America, and valuations by the
Administrative Agent's field examiners (including, without
65
limitation, valuations from Freed ▇▇▇▇▇▇) reflecting values of the
Borrower Parties' Accounts, Inventory and other personal property at
levels acceptable to each of the Agents;
(xii) Duly executed landlord waiver agreements and bailee
waiver agreements, as applicable, with respect to each Borrower Party's
leased premises or goods in the possession of bailees, in each case, in
form and substance satisfactory to each of the Agents;
(xiii) A duly executed Licensor Consent Agreement with
respect to each License Agreement;
(xiv) Duly executed Blocked Account Agreements.
(xv) (A) The legal opinion of King & Spalding LLP, counsel
to the Borrower Parties, addressed to the Lender Group, in form and
substance satisfactory to each of the Agents, (B) the legal opinion of
King & Spalding LLP, counsel to the Parent, addressed to the Sellers,
including a reliance provision in favor of the Lender Group, in form
and substance reasonably satisfactory to each of the Agents, and (C)
the legal opinions of ▇▇▇▇▇▇ & Bird LLP and Ropes & ▇▇▇▇, counsel to
the Target and the Sellers, addressed to the Borrower Parties,
including reliance provisions in favor of the Lender Group, in form and
substance reasonably satisfactory to each of the Agents;
(xvi) The duly executed Request for Advance for the initial
Advance of the Revolving Loans;
(xvii) The Assignments of Life Insurance Policy duly
executed by the applicable Borrower Party and acknowledged by the
applicable insurance company, in form and substance satisfactory to
each of the Agents;
(xviii) All Lien Acknowledgment Agreements duly executed by
the applicable Approved Freight Handler;
(xix) With respect to each Borrower Party, a loan
certificate signed by an Authorized Signatory of such Borrower Party in
substantially the form of Exhibit L, including a certificate of
incumbency with respect to each Authorized Signatory of such Borrower
Party, together with appropriate attachments which shall include,
without limitation, the following: (A) a copy of the certificate or
articles of incorporation, certificate of limited partnership or
certificate of organization of such Borrower Party certified to be
true, complete and correct by the Secretary of State or applicable
officer for the State of such Borrower Party's incorporation or
organization, (B) a true, complete and correct copy of the bylaws,
partnership agreement or limited liability company or operating
agreement of such Borrower Party, (C) a true, complete and correct
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copy of the resolutions of the such Borrower Party authorizing the
execution, delivery and performance by such Borrower Party of the Loan
Documents and, with respect to the Borrowers, authorizing the
borrowings hereunder, (D) certificates of good standing from each
jurisdiction in which such Borrower Party does business except to the
extent the failure to be so qualified would not reasonably be expected
to have a Materially Adverse Effect, (E) copies of employment contracts
for senior management level employees of such Borrower Party, and (F)
copies of all shareholders or share purchase agreements, as applicable,
relating to the Equity Interests of such Borrower Party;
(xx) A certificate executed by an Authorized Signatory of
the Parent regarding the solvency and financial condition of the
Borrower Parties, together with a pro forma balance sheet giving effect
to the Acquisition, the incurrence of the Senior Notes Debt and the
incurrence of the initial Advances and the issuance of the initial
Letters of Credit on the Agreement Date, in form and substance
satisfactory to each of the Agents;
(xxi) The duly executed Earnout Subordination Agreement;
(xxii) A copy of the executed Senior Notes Documents,
together with all exhibits and schedules thereto; provided, however,
that only a specimen copy of the Senior Notes shall be required to be
delivered;
(xxiii) A copy of the executed Acquisition Agreement,
together with all exhibits and schedules thereto, accompanied by the
certificate of a senior officer of the Parent as to the consummation of
the transactions contemplated by the Acquisition Agreement;
(xxiv) A copy of the other executed Acquisition Documents;
(xxv) A certificate of the Secretary or an Assistant
Secretary of the Parent certifying that attached thereto is a true and
complete copy of resolutions adopted by the Board of Directors of the
Parent authorizing the execution, delivery and performance of the
Senior Notes Documents and the Acquisition Documents and the
consummation of the transactions provided for therein;
(xxvi) (A) Projected consolidated financial statements for
the Parent and its Subsidiaries for the 2004 fiscal year, on a month by
month basis, for each fiscal year thereafter until the Maturity Date on
an annual basis and (B) monthly financial statements for the Parent and
its Subsidiaries and the Target for the fiscal month of April 2003;
(xxvii) Copies of certificates of insurance and loss payable
endorsements with respect to the Borrower Parties and certified copies
of all
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insurance policies of the Borrower Parties, in each case, meeting the
requirements of Section 6.5;
(xxviii) Copies of any pay-off letters, termination
statements, canceled mortgages and the like required by the Agents in
connection with the removal of any Liens (other than Permitted Liens)
against the assets of the Borrower Parties after giving effect to the
Acquisition;
(xxix) Lien search results with respect to the Borrower
Parties from all appropriate jurisdictions and filing offices
satisfactory to each of the Agents;
(xxx) Evidence satisfactory to each of the Agents that the
Liens granted pursuant to the Security Documents will be first priority
perfected Liens on the Collateral (subject only to Permitted Liens);
(xxxi) Payment of all fees and expenses payable to the
Administrative Agent, the affiliates of the Administrative Agent, the
Syndication Agent and the Lenders in connection with the execution and
delivery of this Agreement, including, without limitation, fees and
expenses of counsel to the Administrative Agent; and
(xxxii) All such other documents as the Agents may reasonably
request, certified by an appropriate governmental official or an
Authorized Signatory if so requested.
(b) No event shall have occurred since May 31, 2002, which, in the
reasonable business judgment of the Agents and the other members of the Lender
Group, is reasonably likely to have a Materially Adverse Effect or a materially
adverse effect upon the business, assets, liabilities, prospects, condition
(financial or otherwise) or the results of operation of the Target;
(c) The Administrative Agent and the Lenders shall have received
evidence reasonably satisfactory to them that (i) all conditions to the closing
of the transactions contemplated by the Senior Notes Documents have been
satisfied (ii) the Senior Notes have been issued by the Parent for an aggregate
principal amount of not less than $200,000,000, and (iii) such proceeds have
been released (or will be, concurrently with the making of the initial Advance)
from escrow and made available to the Parent.
(d) The Agents shall have received evidence reasonably
satisfactory to them that all Necessary Authorizations are in full force and
effect and are not subject to any pending or threatened reversal or
cancellation, and that no Default exists, after giving effect to the initial
Advance hereunder, and the Agents and the other members of the Lender Group
shall have received a certificate of an Authorized Signatory so stating.
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(e) The Agents shall have received evidence satisfactory to them
that (i) the Target shall have entered into employment agreements with each of
S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Gasperina and ▇▇▇ ▇. Kong, (ii) the Target
shall have entered into consulting agreements with each of ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (iii) the Parent shall have entered into noncompetition agreements with
each of S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Beach Blues, Inc. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and (iv) the Parent shall have entered into nonsolicitation and
nondisclosure agreements with each of Whole Duty Investments, Ltd., ▇▇▇▇ ▇▇▇▇▇
and SKM-TB, LLC, which agreements shall be in form and substance satisfactory to
each of the Agents and which agreements shall be in full force and effect on the
Agreement Date;
(f) The Agents shall have received evidence that the Acquisition
will be consummated on the terms set forth in the Acquisition Documents and
otherwise on terms satisfactory to each of the Agents immediately following the
initial Advance hereunder as of the Agreement Date;
(g) The Agents shall have received confirmation that the original
Uniform Commercial Code financing statements naming the respective Borrower
Parties as debtor and naming the Administrative Agent as secured party have been
duly filed in all appropriate jurisdictions, in such form as shall be
satisfactory to each of the Agents;
(h) The Agents shall have received a duly executed Borrowing Base
Certificate, in form and substance satisfactory to each of the Agents,
demonstrating that as of the Agreement Date, after giving effect to the
borrowings hereunder on the Agreement Date, the issuance of any Letters of
Credit hereunder on the Agreement Date and the consummation of the Acquisition,
the Borrowers shall have not less than $50,000,000 in Availability (with
expenses and liabilities being paid in the ordinary course of business, without
acceleration of sales and without deterioration in working capital);
(i) The Agents shall have received a flow of funds report in form
and substance reasonably acceptable to them dated as of the Agreement Date and
executed by the Administrative Borrower which report shall include a statement
of all sources and uses of funds on the Agreement Date;
(j) The Agents shall have received a certificate executed by the
chief financial officer of the Administrative Borrower, together with
calculations, evidencing that (A) EBITDA of the Parent and its Subsidiaries for
the 12-month period ending with the April 2003 fiscal month on a consolidated
basis calculated on a Pro Forma Basis (after giving effect to the Acquisition)
is not less than $90,000,000 and (B) as of the last day of the April 2003 fiscal
month, the ratio of Total Debt to EBITDA calculated on a Pro Forma Basis (after
giving effect to the Acquisition) is not greater than 3.80 to 1.00;
(k) The Agents shall have received, as applicable, and reviewed to
their satisfaction the Borrowers' accounting and computer systems, pension
agreements and
69
obligations, union contracts negotiated in the preceding twelve (12) month
period and customer profitability reports.
(l) The Agents shall have received and reviewed to their
satisfaction, all License Agreements;
(m) The Agents shall have received evidence satisfactory to them
that the securitization arrangements of the Parent have been terminated pursuant
to the terms of the securitization documents governing such arrangements;
(n) The Agent s shall have reviewed to their satisfaction the
structure, terms and conditions of the Acquisition, including any earnout
provisions thereof;
(o) The Administrative Agent shall have completed to its
satisfaction its field audit of the Borrowers; and
(p) The Administrative Agent shall have completed its credit
review of certain Account Debtors of the Borrowers and such review shall be
reasonably satisfactory to each of the Agents.
Section 4.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance, including the initial Advance hereunder (but
excluding Advances, the proceeds of which are to reimburse (i) the Swing Bank
for Swing Loans or (ii) an Issuing Bank for amounts drawn under a Letter of
Credit), is subject to the fulfillment of each of the following conditions
immediately prior to or contemporaneously with such Advance:
(a) All of the representations and warranties of the Borrower
Parties under this Agreement and the other Loan Documents, which, pursuant to
Section 5.4, are made at and as of the time of such Advance, shall be true and
correct at such time, both before and after giving effect to the application of
the proceeds of such Advance, and the Administrative Agent shall have received a
certificate (which may be a Request for Advance) to that effect signed by an
Authorized Signatory of the Administrative Borrower and dated the date of such
Advance or such Request for Advance;
(b) The incumbency of the Authorized Signatories of the
Administrative Borrower shall be as stated in the certificate of incumbency
contained in the certificate of the Administrative Borrower delivered pursuant
to Section 4.1(a) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Agent and the Lenders;
(c) The most recent Borrowing Base Certificate which shall have
been delivered to the Administrative Agent pursuant to Section 7.5(a) shall
demonstrate that, after giving effect to the making of such Advance, no
Overadvance shall exist and that the Borrowers shall have not less than
$22,500,000 (or with respect to any date of
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determination in December 2003, January 2004, February 2004, December 2004,
January 2005, February 2005, or February 2006, not less than $15,000,000) of
Availability (with expenses and liabilities being paid in the ordinary course of
business, without acceleration of sales and without deterioration in working
capital);
(d) There shall not exist on the date of such Advance and after
giving effect to the application of the proceeds of such Advance, a Default or
an Event of Default and the Administrative Agent shall have received a
certificate (which may be a Request for Advance) to that effect signed by an
Authorized Signatory of the Administrative Borrower and dated the date of such
Advance; and
(e) The Administrative Agent and the Lenders shall have received
all such other certificates, reports, statements, opinions of counsel, or other
documents as the Administrative Agent or Lenders may reasonably request and all
other conditions to the making of such Advance which are set forth in this
Agreement shall have been fulfilled.
The Borrowers hereby agree that the delivery of any Request for Advance
hereunder shall be deemed to be the certification of the Authorized Signatory of
the Administrative Borrower thereof, on behalf of the Borrowers, that there does
not exist, on the date of the making of the Advance and after giving effect
thereto, a Default or an Event of Default hereunder and that all of the other
conditions set forth in this Section 4.2 have been satisfied. Notwithstanding
the foregoing, if the conditions, or any of them, set forth above are not
satisfied, such conditions may be waived by the requisite Lenders under Section
11.12, and, in any event, the Majority Lenders may waive the Availability
requirement set forth in Section 4.2(c).
Section 4.3 Conditions Precedent to Each Letter of Credit. The
obligation of the Issuing Banks to issue (or arrange with a Foreign Issuer the
issuance of) each Letter of Credit (including the initial Letter of Credit), to
increase the stated amount of any existing Letter of Credit or to extend the
expiration date of any existing Letter of Credit hereunder is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with the issuance of such Letter of Credit:
(a) All of the representations and warranties of the Borrower
Parties under this Agreement and the other Loan Documents, which, pursuant to
Section 5.4, are made at and as of the time of the issuance of (or amendment to)
such Letter of Credit, shall be true and correct at such time, both before and
after giving effect to the issuance of such Letter of Credit, and the
Administrative Agent shall have received a certificate (which may be a Request
for Issuance of Letter of Credit) to that effect signed by an Authorized
signatory of the Administrative Borrower and dated the date of the issuance of
such Letter of Credit or such Request for Issuance of Letter of Credit;
(b) The incumbency of the Authorized Signatories of the
Administrative Borrower shall be as stated in the certificate of incumbency
contained in the certificate of the Administrative Borrower delivered pursuant
to Section 4.1(a) or as subsequently
71
modified and reflected in a certificate of incumbency delivered to the
Administrative Agent and the Lenders;
(c) The most recent Borrowing Base Certificate which shall have
been delivered to the Administrative Agent pursuant to Section 7.5(a) shall
demonstrate that, after giving effect to the making of (or amendment to) such
Letter of Credit, that the Borrowers shall have not less than $22,500,000 (or
with respect to any date of determination in December 2003, January 2004,
February 2004, December 2004, January 2005, February 2005, or February 2006, not
less than $15,000,000) of Availability (with expenses and liabilities being paid
in the ordinary course of business, without acceleration of sales and without
deterioration in working capital);
(d) There shall not exist on the date of issuance of (or amendment
to) such Letter of Credit, and after giving effect thereto, a Default or an
Event of Default, and the Administrative Agent shall have received a certificate
(which may be a Request for Issuance of Letter of Credit) to that effect signed
by an Authorized Signatory of the Administrative Borrower and dated the date of
the issuance of (or amendment to) such Letter of Credit; and
(e) The Administrative Agent and the applicable Issuing Bank shall
have received all such other certificates, reports, statements, opinions of
counsel, or other documents as the Administrative Agent or such Issuing Bank may
reasonably request and all other conditions to the issuance of (or amendment to)
such Letter of Credit which are set forth in this Agreement shall have been
fulfilled.
The Borrower hereby agrees that the delivery of any Request for Issuance of a
Letter of Credit hereunder shall be deemed to be the certification of the
Authorized Signatory thereof that there does not exist, on the date of issuance
of (or amendment to) the Letter of Credit and after giving effect thereto, a
Default or an Event of Default hereunder and that all of the conditions set
forth in Section 4.3 have been satisfied. Notwithstanding the foregoing, if the
conditions, or any of them, set forth above are not satisfied, such conditions
may be waived by the requisite Lenders under Section 11.12, and, in any event,
the Majority Lenders may waive the Availability requirement set forth in Section
4.3(c).
Section 4.4 Conditions Subsequent. As a condition subsequent to
obligations of the Lenders to undertake the Revolving Commitment and to make the
Advances hereunder and the obligation of the Issuing Banks to issue the Letters
of Credit hereunder, the Borrowers shall perform or cause to be performed the
following (the failure by the Borrowers to so perform or cause to be performed
each such item constituting an Event of Default hereunder):
Immediately upon the consummation of the Acquisition, Target and each Domestic
Subsidiary of Target, as applicable, shall execute and deliver to the
Administrative Agent each of the following documents, in form and substance
satisfactory to each of the
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Agents: (i) the Joinder Agreement, (ii) a Guaranty Supplement, (iii) a
supplement to the Security Agreement, (iv) a supplement to the Pledge Agreement,
(v) a certificate signed by an Authorized Signatory of such Person in
substantially the form of Exhibit L, including a certificate of incumbency with
respect to each Authorized Signatory of such Person, together with appropriate
attachments which shall include, without limitation, the following: (A) a copy
of the certificate or articles of incorporation, organization or formation of
such Person certified to be true, complete and correct by the Secretary of State
or applicable officer for the state of incorporation, formation or organization
of such Person, (B) a true, complete and correct copy of the bylaws, partnership
agreement or limited liability company operating agreement of such Person, (C) a
true, complete and correct copy of the resolutions of such Person authorizing
the execution, delivery and performance by such Person of the Loan Documents and
authorizing the borrowings hereunder, (D) certificates of good standing from
each jurisdiction in which such Person does business except to the extent the
failure to be so qualified would not reasonably be expected to have a Materially
Adverse Effect, (E) copies of employment contracts for key management level
employees of such Person, and (F) copies of all shareholders or share purchase
agreements, relating to the Equity Interests of such Person, (v) other Security
Documents, opinions of counsel, reports, statements, certificates or other
documents as the Administrative Agent may reasonably request.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Section 5.1 General Representations and Warranties. In order to induce
the Lender Group to enter into this Agreement and to extend the Loans and issue
the Letters of Credit to the Borrowers, each Borrower Party hereby represents,
and warrants that:
(a) Organization; Power; Qualification. Each Borrower Party and
each Subsidiary of a Borrower Party, as applicable (i) is a corporation or other
legal entity duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation or organization, (ii) has the
corporate or other company power and authority to own or lease and operate its
properties and to carry on its business as now being and hereafter proposed to
be conducted, and (iii) is duly qualified and is in good standing as a foreign
corporation or other company, and authorized to do business, in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization except where the failure
to be so qualified would not reasonably be expected to have a Materially Adverse
Effect.
(b) Authorization; Enforceability. Each Borrower Party has the
power and has taken all necessary action, corporate or otherwise to authorize it
to execute, deliver, and perform this Agreement and each of the other Loan
Documents to which it is a party in accordance with the terms thereof and to
consummate the transactions contemplated hereby and thereby. Each of this
Agreement and each other Loan Document to which a
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Borrower Party is a party has been duly executed and delivered by such Borrower
Party, and (except for Requests for Advance, Requests for Issuance of Letters of
Credit, Notices of Conversion/Continuation, Borrowing Base Certificates and
Uniform Commercial Code financing statements solely to the extent they do not
contain any affirmative obligations of the Borrower Parties) is a legal, valid
and binding obligation of such Borrower Party, enforceable in accordance with
its terms except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditor's rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
(c) Partnerships; Joint Ventures; Subsidiaries. Except as
disclosed to the Administrative Agent in writing in connection with any
investment made pursuant to Section 8.5 or 8.7, no Borrower Party or any
Subsidiary of a Borrower Party is a partner or joint venturer in any partnership
or joint venture other than (i) the Subsidiaries listed on Schedule 5.1(c)-1
(and identified on such schedule as a Domestic Subsidiary or Foreign
Subsidiaries) and (ii) the partnerships and joint ventures (that are not
Subsidiaries) listed on Schedule 5.1(c)-2. Schedule 5.1(c)-1 and Schedule
5.1(c)-2 set forth, for each entity identified thereon, a complete and accurate
statement of (A) the percentage ownership of each entity by the applicable
Borrower Party, (B) the state or other jurisdiction of incorporation or
organization, as appropriate, of each such entity, (C) each state in which each
entity is qualified to do business as of the Agreement Date and (D) all names,
trade names, trade styles or doing business forms which such entity has used or
under which such entity has transacted business during the five (5) year period
immediately preceding the Agreement Date. Except as set forth on Schedule
5.1(c)-1 and Schedule 5.1(d) attached hereto or as disclosed to the
Administrative Agent in writing as set forth above, no Borrower Party has any
Subsidiaries.
(d) Capital Stock and Related Matters. The authorized Equity
Interests as of the Agreement Date of each Borrower Party and its Subsidiaries
and the number of shares of such Equity Interests that are issued and
outstanding as of the Agreement Date are as set forth on Schedule 5.1(d). All of
the shares of such Equity Interests that are issued and outstanding as of the
Agreement Date are fully paid and non-assessable. As of the Agreement Date, the
Equity Interests of each such Borrower Party and its Subsidiaries (other than
the Parent) are owned by the Persons listed on Schedule 5.1(d) in the amounts
set forth on such schedule. A description of such Equity Interests held by such
Persons is listed on Schedule 5.1(d). Except as described on Schedule 5.1(d), no
Borrower Party or Subsidiary of a Borrower Party has outstanding any stock or
securities convertible into or exchangeable for any shares of its Equity
Interests, nor are there any preemptive or similar rights to subscribe for or to
purchase, or any other rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments, or claims of any character relating
to, any Equity Interests or any stock or securities convertible into or
exchangeable for any Equity Interests. Except as set forth on Schedule 5.1(d),
no
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Borrower Party or Subsidiary of a Borrower Party is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its Equity Interests or to register any shares of its Equity
Interests, and there are no agreements restricting the transfer of any shares of
such Borrower Party's or such Subsidiary's Equity Interests.
(e) Compliance of the Loan Documents with Laws, Other Loan
Documents, and Contemplated Transactions The execution, delivery, and
performance of this Agreement and each of the other Loan Documents in accordance
with their respective terms and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any Applicable
Law, (ii) conflict with, result in a breach of, or constitute a default under
the certificate of incorporation or by-laws of any Borrower Party or under any
indenture, agreement, or other instrument to which any Borrower Party is a party
or by which any Borrower Party or any of its properties may be bound, or (iii)
result in or require the creation or imposition of any Lien upon or with any
Borrower Party except Permitted Liens.
(f) Necessary Authorizations. Each Borrower Party and each
Subsidiary of a Borrower Party has obtained all Necessary Authorizations, and
all such Necessary Authorizations are in full force and effect. None of such
Necessary Authorizations is the subject of any pending or, to the best of each
Borrower Party's or such Subsidiary's knowledge, threatened attack or
revocation, by the grantor of the Necessary Authorization.
(g) Title to Properties. Each Borrower Party and each Subsidiary
of a Borrower Party has good, marketable, and legal title to, or a valid
leasehold interest in, all of its properties and assets, and none of such
properties or assets is subject to any Liens (other than Permitted Liens).
(h) Material Contracts; Labor Matters. Schedule 5.1(h) contains a
complete list, as of the date of this Agreement, of each contract or agreement
to which any Borrower Party or Subsidiary of a Borrower Party is a party which,
if terminated, would reasonably be likely to result in a Materially Adverse
Effect. Schedule 5.1(h) further identifies, as of the Agreement Date, each
material contract which requires consent to the granting of a Lien in favor of
the Administrative Agent on the rights of any Borrower Party thereunder. Except
as disclosed to the Administrative Agent and the Lenders in writing from time to
time, no Borrower Party or Subsidiary of a Borrower Party is in default under or
with respect to any contract to which it is a party or by which it or any of its
properties are bound that, if terminated, would reasonably be likely to result
in a Materially Adverse Effect. Except as disclosed on Schedule 5.1(h): (A) no
labor contract to which any Borrower Party is a party or is otherwise subject is
scheduled to expire prior to the Maturity Date; (B) no Borrower Party has,
within the two-year (2) period preceding the Agreement Date, taken any action
which would have constituted or resulted in a "plant closing" or "mass layoff"
within the meaning of the Federal Worker
75
Adjustment and Retraining Notification Act of 1988 or any similar applicable
federal, state or local law (to the extent any such law would restrict such
action taken given the location of the applicable Borrower Party's operations or
otherwise), and no Borrower Party has any reasonable expectation that any such
action is or will be required at any time prior to the Maturity Date; (C) no
Borrower Party is a party to any labor dispute (other than disputes arising in
the ordinary course of business, including, without limitation, disputes with
such Borrower Party's employees as individuals and not affecting such Borrower
Party's relations with any labor group or its workforce as a whole), and (D)
there are no pending or, to each Borrower Party's knowledge, threatened strikes
or walkouts relating to any labor contracts to which any Borrower Party is a
party or is otherwise subject that could reasonably be expected to have a
Materially Adverse Effect. Except as set forth on Schedule 5.1(h), none of the
employees of any Borrower Party or Subsidiary of a Borrower Party is a party to
any collective bargaining agreement with such Borrower Party or such Subsidiary,
as applicable.
(i) Taxes. Except as set forth on Schedule 5.1(i), all federal,
state, and other tax returns of each Borrower Party and each Subsidiary of
Borrower Party required by law to be filed have been duly filed, and all
federal, state, and other taxes (including without limitation, all real estate
and personal property, income, franchise, transfer and gains taxes), all general
or special assessments, and other governmental charges or levies upon each
Borrower Party and each Subsidiary of a Borrower Party and any of their
respective properties, income, profits, and assets, which are due and payable,
have been paid, except any payment of any of the foregoing which such Borrower
Party or Subsidiary, as applicable, is currently contesting in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Borrower Party or such Subsidiary,
as the case may be. The charges, accruals, and reserves on the books of the
Borrower Parties and Subsidiaries of the Borrower Parties in respect of taxes
are, in the reasonable judgment of the Borrower Parties, adequate. Except as set
forth on Schedule 5.1(i), no Borrower Party or any Subsidiary of a Borrower
Party is currently under audit by the Internal Revenue Service or any other
taxing authority.
(j) Financial Statements. The Borrower Parties have furnished, or
caused to be furnished, to the Lenders the audited consolidated financial
statements of the Parent and its Subsidiaries and the financial statements of
the Target which are complete and correct in all material respects and present
fairly in accordance with GAAP the respective financial positions of the Parent
and its Subsidiaries as of May 31, 2002 and of the Target as of March 31, 2002,
and the respective results of operations of the Parent and its Subsidiaries and
of the Target for the periods then ended. The Borrower Parties have furnished,
or caused to be furnished, to the Lenders the unaudited consolidated financial
statements of the Parent and its Subsidiaries and the financial statements of
the Target for the April 2003 fiscal month which are complete and correct in all
material respects and present fairly in accordance with GAAP, subject to normal
year end adjustments, the respective financial positions of the Parent and its
Subsidiaries as of the last day of the
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April 2003 fiscal month and of the Target as of the last day of the April 2003
fiscal month, and the respective results of operations of the Parent and its
Subsidiaries and of the Target for the periods then ended.
(k) No Adverse Change. Since May 31, 2002, there has occurred no
event which could reasonably be expected to have a Materially Adverse Effect or,
on or prior to the Agreement Date, a materially adverse effect upon the
business, assets, liabilities, prospects, condition (financial or otherwise) or
the results of operation of the Target.
(l) Investments and Guaranties. As of the Agreement Date, no
Borrower Party or Subsidiary of a Borrower Party owns any Equity Interests of,
or has outstanding loans or advances to, or guaranties of the obligations of,
any Person, except as reflected in the financial statements referred to in
Section 5.1(j) or disclosed on Schedules 5.1(c)-1, 5.1(d) or 5.1(l).
(m) Liabilities, Litigation, etc. As of the Agreement Date, except
for liabilities incurred in the normal course of business, no Borrower Party or
Subsidiary of a Borrower Party has any material (individually or in the
aggregate) liabilities, direct or contingent, except as disclosed or referred to
in the financial statements referred to in Section 5.1(j), the Obligations and
the Senior Notes Debt. As of the Agreement Date, except as described on
Schedules 5.1(m) and 5.1(x), there is no litigation, legal or administrative
proceeding, investigation, or other action of any nature pending or, to the
knowledge of the Borrower Parties, threatened against or affecting any Borrower
Party or any Subsidiary of a Borrower Party or any of their respective
properties which could reasonably be expected to result in any judgment against
or liability of such Borrower Party or Subsidiary of a Borrower Party in excess
of $7,500,000, individually and in the aggregate with respect to all Borrower
Parties and their Subsidiaries, or the loss of any certification or license
material to the operation of such Borrower Party's or Subsidiary's business.
None of such litigation disclosed on Schedules 5.1(m) and 5.1(x), individually
or collectively, could reasonably be expected to have a Materially Adverse
Effect.
(n) ERISA. Each Borrower Party and each Plan are in compliance in
all material respects with ERISA and the Code, and no Borrower Party nor any of
its ERISA Affiliates incurred any accumulated funding deficiency within the
meaning of Section 302 of ERISA or Section 412 of the Code with respect to any
such Plan that is subject to the minimum funding requirements of Section 302 of
ERISA or Section 412 of the Code. Each Borrower Party and each of its ERISA
Affiliates have complied with all material requirements of Sections 601 through
608 of ERISA and Section 4980B of the Code. No Borrower Party has made any
promises of retirement or other benefits to employees, except as set forth in
the Plans. No Borrower Party has incurred any material liability to the PBGC in
connection with any such Plan. No Reportable Event has occurred and is
continuing with respect to any such Plan. No such Plan or trust created
thereunder, or party in interest (as defined in Section 3(14) of ERISA, or any
fiduciary (as defined in Section 3(21) of ERISA), has engaged in a non-exempt
"prohibited transaction" (as such
77
term is defined in Section 406 of ERISA or Section 4975 of the Code) which would
subject any Borrower Party to any material penalty or tax on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code. No
Borrower Party or any ERISA Affiliate is a participant in or is obligated to
make any payment to a Multiemployer Plan.
(o) Intellectual Property; Licenses; Certifications. As of the
Agreement Date, except as set forth on Schedule 5.1(o), no Borrower Party or
Subsidiary of a Borrower Party owns any registered patents, trademarks, service
marks or copyrights, and has no pending registration applications with respect
to any of the foregoing. As of the Agreement Date, no other patents, trademarks,
service marks or copyrights are necessary for the operation of the business of
the Borrower Parties and their Subsidiaries. Each Borrower Party and each
Subsidiary of a Borrower Party has all material licenses and certifications
necessary for the operation of such Borrower Party's or such Subsidiary's
business.
(p) Compliance with Law; Absence of Default. Each Borrower Party
and each Subsidiary of a Borrower Party is in material compliance with all
Applicable Laws and with all of the provisions of its certificate or articles of
incorporation or formation, by-laws or other governing documents. No event has
occurred or has failed to occur which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes (i) a Default, (ii) a default
by such Borrower Party under the Senior Notes Documents, or (iii) except with
respect to indebtedness in an aggregate principal amount equal to or less than
$5,000,000, a default under any other indenture, agreement, or other instrument,
or any judgment, decree, or order to which such Borrower Party or such
Subsidiary is a party or by which such Borrower Party or such Subsidiary or any
of their respective properties may be bound.
(q) Casualties; Taking of Properties, etc. Since May 31, 2002,
neither the business nor the properties of the Borrower Parties, their
Subsidiaries, or the Target has been materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces, or acts of
God or of any public enemy.
(r) Accuracy and Completeness of Information. All written
information, reports, other papers and data relating to the Borrower Parties
furnished by or at the direction of the Borrower Parties to the Lender Group
(other than projections, estimates and forecasts) were, at the time furnished,
complete and correct in all material respects. With respect to projections,
estimates and forecasts given to the Lender Group, such projections, estimates
and forecasts are based on the Borrower Parties' good faith assessment of the
future of the business at the time made. The Borrower Parties had a reasonable
basis for such assessment at the time made.
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(s) Compliance with Regulations T, U and X. No Borrower Party or
Subsidiary of a Borrower Party is engaged principally in or has as one of its
important activities in the business of extending credit for the purpose of
purchasing or carrying, and no Borrower Party or Subsidiary of a Borrower Party
owns or presently intends to acquire, any "margin security" or "margin stock" as
defined in Regulations T, U and X of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). None of the proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin stock or for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulations T, U and X. If so requested by the Administrative
Agent, the Borrower Parties or their Subsidiaries, as applicable, will furnish
the Administrative Agent with (i) a statement or statements in conformity with
the requirements of Federal Reserve Form U-1 referred to in Regulation U of said
Board of Governors and (ii) other documents evidencing its compliance with the
margin regulations reasonably requested by the Administrative Agent. Neither the
making of the Loans nor the use of proceeds thereof will violate the provisions
of Regulation T, U or X of said Board of Governors.
(t) Solvency. As of the Agreement Date and after giving effect to
the transactions contemplated by the Acquisition Documents, the Acquisition, the
incurrence of the Senior Notes Debt, and the transactions contemplated by the
Loan Documents (i) the property of each Borrower Party, at a fair valuation on a
going concern basis, will exceed its debt; (ii) the capital of each Borrower
Party will not be unreasonably small to conduct its business; and (iii) no
Borrower Party will have incurred debts, or have intended to incur debts, beyond
its ability to pay such debts as they mature. For purposes of this Section,
"debt" means any liability on a claim, and "claim" means (A) the right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, undisputed, legal,
equitable, secured or unsecured, or (B) the right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, undisputed, secured or unsecured.
(u) Insurance. The Borrower Parties and their Subsidiaries have
insurance meeting the requirements of Section 6.5, and such insurance policies
are in full force and effect. As of the Agreement Date, all material insurance
policies and insurance coverages maintained by the Borrower Parties and their
Subsidiaries are described on Schedule 5.1(u).
(v) Broker's or Finder's Commissions. Except as set forth on
Schedule 5.1(v), no broker's or finder's fee or commission will be payable with
respect to the execution and delivery of this Agreement and the other Loan
Documents, and no other similar fees or commissions will be payable by the
Borrower Parties for any other
79
services rendered to the Borrower Parties ancillary to the credit transactions
contemplated herein.
(w) Real Property. All real property leased by each Borrower Party
and each Subsidiary of a Borrower Party as of the Agreement Date, and the name
of the lessor of such real property, is set forth in Schedule 5.1(w)-1. The
leases of each Borrower Party and each Subsidiary of a Borrower Party, as
applicable, are valid, enforceable and in full force and effect, and have not
been modified or amended, except as otherwise set forth in Schedule 5.1(w)-1.
The Borrower Parties and their Subsidiaries, as applicable, are the sole holders
of the lessee's interests under such leases. No Borrower Party or a Subsidiary
of a Borrower Party has made any pledge, mortgage, assignment or sublease of any
of it rights under such leases except pursuant to the Loan Documents and as set
forth in Schedule 5.1(w)-1 and, there is no default or condition which, with the
passage of time or the giving of notice, or both, would constitute a material
default on the part of any party under such leases and the Borrower Parties and
their Subsidiaries, as applicable, have paid all rents and other charges due and
payable under such leases. All real property owned by each Borrower Party and
each Subsidiary of a Borrower Party as of the Agreement Date is set forth in
Schedule 5.1(w)-2. As of the Agreement Date, no Borrower Party or Subsidiary of
a Borrower Party owns, leases or uses any real property other than as set forth
on Schedule 5.1(w). Each Borrower Party and each Subsidiary of a Borrower Party,
as applicable, owns good and marketable fee simple title to all of its owned
real property, and none of its owned real property is subject to any Liens,
except Permitted Liens. No Borrower Party or Subsidiary of a Borrower Party,
owns or holds, or is obligated under or a party to, any option, right of first
refusal or any other contractual right to purchase, acquire, sell, assign or
dispose of any real property owned or leased by it.
(x) Environmental Matters.
(i) Except as is described on Schedule 5.1(x) - 1, none
of the Properties contains, in, on or under, including, without
limitation, the soil and groundwater thereunder, any Hazardous
Materials in violation of Environmental Laws or in amounts that could
give rise to any material liability under Environmental Laws.
(ii) Except as is described on Schedule 5.1(x) - 2, each
Borrower Party and each Subsidiary of a Borrower Party is in compliance
with all applicable Environmental Laws and there is no violation of any
Environmental Law or contamination which could materially interfere
with the continued operation of any of the Properties or impair the
financial condition of any Borrower Party or Subsidiary of a Borrower
Party.
(iii) Except as is described on Schedule 5.1(x) -3, no
Borrower Party or Subsidiary of a Borrower Party has received from any
Governmental Authority any complaint, or notice of violation, alleged
violation, investigation or
80
advisory action or notice of potential liability regarding matters of
environmental protection or permit compliance under applicable
Environmental Laws with regard to the Properties, nor is any Borrower
Party aware that any such notice is pending.
(iv) Except as is described on Schedule 5.1(x) - 4,
Hazardous Materials have not been generated, treated, stored, disposed
of, at, on or under any of the Property in violation of any
Environmental Laws or in a manner that could give rise to any liability
under Environmental Laws nor have any Hazardous Materials been
transported or disposed of from any of the Properties to any other
location in violation of any Environmental Laws or in a manner that
could give rise to liability under Environmental Laws. Except as
disclosed on Schedule 5.1x-4 no Borrower Party or any Subsidiary of a
Borrower Party has permitted or will permit any tenant or occupant of
the Properties to engage in any activity that could impose material
liability under the Environmental Laws on such tenant or occupant, any
Borrower Party or any Subsidiary of a Borrower Party or any other owner
of any of the Properties.
(v) Except as is described on Schedule 5.1(x) - 5, no
Borrower Party is, and no Subsidiary of a Borrower Party is, a party to
any governmental administrative actions or judicial proceedings pending
under any Environmental Law with respect to any of the Properties, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to any of the Properties.
(vi) Except as is described on Schedule 5.1(x) - 6, there
has been no release or threat of release of Hazardous Materials into
the environment at or from any of the Properties, or arising from or
relating to the operations of the Borrower Parties or their
Subsidiaries, in material violation of Environmental Laws or in amounts
that could give rise to any material liability under Environmental
Laws.
(vii) None of the matters disclosed on Schedules 5 (x) - 1
through 6 is reasonably likely to result in liability to the Borrower
Parties and their Subsidiaries in excess of $7,500,000 in the
aggregate.
(y) OSHA. All of the Borrower Parties' operations are conducted in
substantial compliance with all material and applicable rules and regulations
promulgated by the Occupational Safety and Health Administration of the United
States Department of Labor.
(z) Names of Borrowers. No Borrower Party or Subsidiary of a
Borrower Party has changed its name within the five (5) years preceding the
Agreement Date, nor
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has any Borrower Party or Subsidiary of a Borrower Party transacted business
under any other name or trade name.
(aa) Investment Company Act; Public Utility Holding Company Act. No
Borrower Party is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower Parties of this Agreement nor the issuance of any Revolving Loan
Notes violates any provision of such Act or requires any consent, approval, or
authorization of, or registration with, any governmental or public body or
authority pursuant to any of the provisions of such Act. No Borrower Party is a
"holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
(bb) Senior Debt Status. The Obligations as and when incurred shall
constitute senior Indebtedness of each Borrower Party with respect to any
Indebtedness of such Borrower Party that is subordinate to the Obligations,
including, without limitation, Indebtedness of the Parent under the Earnout
Agreement.
Section 5.2 Representations and Warranties Relating to Accounts. With
respect to all Accounts of each Borrower Party, such Borrower Party hereby
warrants and represents to the Lender Group that such Accounts are bona fide
existing payment obligations of Account Debtors created by the sale and delivery
of Inventory or the rendition of services to such Account Debtors in the
ordinary course of such Borrower Party's business. As to each Account that is
identified by such Borrower Party as an Eligible Account in a Borrowing Base
Certificate submitted to the Administrative Agent by the Administrative
Borrower, such Account is not excluded as ineligible by virtue of one or more of
the excluding criteria set forth in the definition of Eligible Accounts.
Section 5.3 Representations and Warranties Relating to Inventory. With
respect to all Eligible Inventory, the Administrative Agent may rely upon all
statements, warranties or representations made in any Borrowing Base Certificate
in determining the classification of such Inventory and in determining which
items of Inventory listed in such Borrowing Base Certificate meet the
requirements of eligibility.
Section 5.4 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made, and shall be true and correct, at and as
of the Agreement Date (after giving effect to the Acquisition) and the date of
each Advance or issuance of (or amendment to) a Letter of Credit hereunder,
except to the extent previously fulfilled in accordance with the terms of this
Agreement or the other Loan Documents and to the extent subsequently
inapplicable. All representations and warranties made under this Agreement and
the other Loan Documents shall survive, and not be waived by, the execution of
this Agreement or the other Loan Documents by the Lender Group or any of them,
any investigation or inquiry by any member of the Lender
82
Group, or the making of any Advance or the issuance of (or amendment to) any
Letter of Credit under this Agreement.
ARTICLE 6.
GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or the Borrowers
shall have the right to borrow, or have Letters of Credit issued, hereunder
(whether or not the conditions to borrowing have been or can be fulfilled), and
unless the Majority Lenders shall otherwise give their prior consent in writing:
Section 6.1 Preservation of Existence and Similar Matters. Each
Borrower Party will, and will cause its Subsidiaries to, (i) except as expressly
permitted under Section 8.7, preserve and maintain its existence, rights,
franchises, licenses, and privileges in its jurisdiction of incorporation or
organization including, without limitation, all Necessary Authorizations, and
(ii) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of their
respective business requires such qualification or authorization except where
the failure to be so qualified would not reasonably be expected to have a
Materially Adverse Effect.
Section 6.2 Compliance with Applicable Law. Each Borrower Party will,
and will cause its Subsidiaries to, comply, in all material respects, with the
requirements of all Applicable Law.
Section 6.3 Maintenance of Properties. Each Borrower Party will, and
will cause its Subsidiaries to, maintain or cause to be maintained in the
ordinary course of business in good repair, working order, and condition, normal
wear and tear and disposal of obsolete equipment excepted, all properties used
or useful in its business (whether owned or held under lease), and from time to
time make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments, and improvements thereto.
Section 6.4 Accounting Methods and Financial Records. Each Borrower
Party will, and will cause its Subsidiaries to, maintain a system of accounting
established and administered in accordance with GAAP, and will keep adequate
records and books of account in which complete entries will be made in
accordance with such accounting principles consistently applied and reflecting
all transactions required to be reflected by such accounting principles.
Section 6.5 Insurance. Each Borrower Party will, and will cause its
Subsidiaries to, maintain insurance including, but not limited to, public
liability, property insurance, comprehensive general liability, product
liability, business interruption and fidelity coverage insurance, in such
amounts and against such risks as would be customary for companies in the same
industry and of comparable size as the Borrower
83
Parties and their Subsidiaries from financially sound and reputable insurance
companies having and maintaining an A.M. Best rating of "A minus" or better and
being in a size category of VI or larger or otherwise acceptable to the
Administrative Agent. In addition to the foregoing, each Borrower Party further
agrees to maintain and pay for insurance upon all goods constituting Collateral
wherever located, in storage or in transit in vehicles, vessels or aircraft,
including goods evidenced by documents, covering casualty, hazard, public
liability and such other risks and in such amounts as would be customary for
companies in the same industry and of comparable size as the Borrower Parties,
from responsible companies having and maintaining an A.M. Best rating of "A
minus" or better and being in a size category of VI or larger or otherwise
acceptable to the Administrative Agent to insure the Lenders' interest in such
Collateral. All such property insurance policies of the Borrower Parties shall
name the Administrative Agent as loss payee and all liability insurance policies
shall name the Administrative Agent as additional insured. Each Borrower Party
shall deliver the original certificates of insurance evidencing that the
required insurance is in force together with satisfactory lender's loss payable
and additional insured, as applicable, endorsements. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less than
thirty (30) days' prior written notice to the Administrative Agent in the event
of cancellation or modification of the policy for any reason whatsoever and a
clause that the interest of the Administrative Agent shall not be impaired or
invalidated by any act or neglect of any Borrower Party or owner of the
Collateral nor by the occupation of the premises for purposes more hazardous
than are permitted by said policy. If any Borrower Party fails to provide and
pay for such insurance, the Administrative Agent may, at the Borrowers' expense,
procure the same, but shall not be required to do so. Each Borrower Party agrees
to deliver to the Administrative Agent, promptly as rendered, true copies of all
reports made in any reporting forms to insurance companies.
Section 6.6 Payment of Taxes and Claims. Each Borrower Party will, and
will cause its Subsidiaries to, pay and discharge all taxes, assessments, and
governmental charges or levies imposed upon it or its income or profit or upon
any properties belonging to it prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies which have
become due and payable and which by law have or may become a Lien upon any of
its Property; except that, no such tax, assessment, charge, levy, or claim need
be paid which is being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set aside on the appropriate books,
but only so long as such tax, assessment, charge, levy, or claim does not become
a Lien or charge other than a Permitted Lien and no foreclosure, distraint,
sale, or similar proceedings shall have been commenced and remain unstayed for a
period thirty (30) days after such commencement. Each Borrower Party shall, and
shall cause its Subsidiaries to, timely file all information returns required by
federal, state, or local tax authorities.
Section 6.7 Visits and Inspections. Each Borrower Party will, and will
cause its Subsidiaries to, permit representatives of the Administrative Agent to
(a) visit and
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inspect the properties of the Borrower Parties and their Subsidiaries, as
applicable, during normal business hours, (b) inspect and make extracts from and
copies of the Borrower Parties' and such Subsidiaries' books and records, as
applicable, and (c) discuss with the Borrower Parties' and such Subsidiaries'
respective principal officers, as applicable, the Borrower Parties' or such
Subsidiaries' businesses, assets, liabilities, financial positions, results of
operations, and business prospects relating to the Borrower Parties or such
Subsidiaries, as applicable. Any other member of the Lender Group may, at its
expense, accompany the Administrative Agent on any regularly scheduled visit (or
during the continuance of a Default any visit regardless of whether it is
regularly scheduled) to the Borrower Parties and their Subsidiaries' properties
.. The Borrower Parties agree and authorize the Administrative Agent, absent the
existence of a Default (in which event, more field examinations and appraisals
may be conducted at the Administrative Agent's discretion), (at which any other
member of the Lender Group may, at its expense, accompany the Administrative
Agent) to conduct no more than two field examinations and appraisals of
Inventory during any twelve (12) month period (using for such Inventory
appraisals, Hilco Appraisal Service, LLC or such other appraisal firm
satisfactory to the Administrative Agent). The Borrower Parties agree to pay
for, or to reimburse the Administrative Agent for, the costs and expenses of
such field examinations and appraisals in accordance with Section 11.2.
Section 6.8 Conduct of Business. Each Borrower Party shall, and shall
cause its Subsidiaries to, continue to engage in business of the same general
type as now conducted by it.
Section 6.9 ERISA. Each Borrower Party shall at all times make, or
cause to be made, prompt payment of contributions required to meet the minimum
funding standards set forth in Section 302 of ERISA and Section 412 of the Code
with respect to each Borrower Party's and its ERISA Affiliates' Plans that are
subject to such funding requirements; furnish to the Administrative Agent,
promptly upon the Administrative Agent's request therefor, copies of any annual
report required to be filed pursuant to ERISA in connection with each such Plan
of each Borrower Party and its ERISA Affiliates; notify the Administrative Agent
as soon as practicable of any Reportable Event and of any additional act or
condition arising in connection with any such Plan which a Borrower Party
believes might constitute grounds for the termination thereof by the PBGC or for
the appointment by the appropriate United States District Court of a trustee to
administer such Plan; and furnish to the Administrative Agent, promptly upon the
Administrative Agent's request therefor, such additional information concerning
any such Plan as may be reasonably requested by the Administrative Agent.
Section 6.10 Lien Perfection. Each Borrower Party agrees to take such
action as may be required to perfect or continue the perfection of the
Administrative Agent's (on behalf of, and for the benefit of, the Lender Group)
security interest in the Collateral. Each Borrower Party hereby authorizes the
Administrative Agent to file any such
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financing statement on such Borrower Party's behalf describing the Collateral as
"all assets of the debtor" or "all personal property of the debtor."
Section 6.11 Location of Collateral. All Collateral, other than
Inventory in transit and Inventory sold in the ordinary course of business, will
at all times be kept by the Borrower Parties at one or more of the business
locations of the Borrower Parties set forth in Schedule 6.11. The Inventory
shall not, without the prior written approval of the Administrative Agent, be
moved from the locations set forth on Schedule 6.11 except as permitted in the
immediately preceding sentence and prior to an Event of Default, (i) sales or
other dispositions of assets permitted pursuant to Section 8.7 and (ii) the
storage of Inventory at locations within the continental United States other
than those specified in the first sentence of this Section 6.11 if (A) the
applicable Borrower Party gives the Administrative Agent written notice of the
new storage location at least thirty (30) days prior to storing Inventory at
such location, (B) the Lenders' security interest in such Inventory is and
continues to be a duly perfected, first priority Lien thereon, (C) neither any
Borrower Party's nor the Administrative Agent's right of entry upon the premises
where such Inventory is stored or its right to remove the Inventory therefrom,
is in any way restricted, (D) the owner of such premises, and any bailee,
warehouseman or similar party that will be in possession of such Inventory,
shall have executed and delivered to the Administrative Agent an agreement, in
form and substance acceptable to the Administrative Agent, waiving any
landlord's, bailee's, warehouseman's or other Lien in respect of the Inventory
for unpaid rent or storage charges, and (E) all negotiable documents and
receipts in respect of any Collateral maintained at such premises are promptly
delivered to the Administrative Agent and any non-negotiable documents and
receipts in respect of any Collateral maintained at such premises are issued to
the Administrative Agent and promptly delivered to the Administrative Agent.
Section 6.12 Protection of Collateral. All insurance expenses and
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral (including, without limitation, all rent payable by
any Borrower Party to any landlord of any premises where any of the Collateral
may be located), and any and all excise, property, sales, and use taxes imposed
by any state, federal, or local authority on any of the Collateral or in respect
of the sale thereof, shall be borne and paid by the Borrower Parties. If the
Borrower Parties fail to promptly pay any portion thereof when due, the Lenders
may, at their option, but shall not be required to, make a Base Rate Advance for
such purpose and pay the same directly to the appropriate Person. The Borrowers
agree to reimburse the Lenders promptly therefor with interest accruing thereon
daily at the Default Rate provided in this Agreement. All sums so paid or
incurred by the Lenders for any of the foregoing and all reasonable costs and
expenses (including attorneys' fees, legal expenses, and court costs) which the
Lenders may incur in enforcing or protecting the Lien on or rights and interest
in the Collateral or any of its rights or remedies under this or any other
agreement between the parties hereto or in respect of any of the transactions to
be had hereunder until paid by the Borrowers to the Lenders with interest at the
Default Rate, shall be considered Obligations owing by the
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Borrowers to the Lenders hereunder. Such Obligations shall be secured by all
Collateral and by any and all other collateral, security, assets, reserves, or
funds of the Borrowers in or coming into the hands or inuring to the benefit of
the Lenders. Neither the Administrative Agent nor the Lenders shall be liable or
responsible in any way for the safekeeping of any of the Collateral or for any
loss or damage thereto (except for reasonable care in the custody thereof while
any Collateral is in the Lenders' actual possession) or for any diminution in
the value thereof, or for any act or default of any warehouseman, carrier,
forwarding agency, or other person whomsoever, but the same shall be at the
Borrower Parties' sole risk.
Section 6.13 Assignments and Records of Accounts. If so requested by
the Administrative Agent following an Event of Default, each Borrower Party
shall execute and deliver to the Administrative Agent, for the benefit of the
Lender Group, formal written assignments of all of the Accounts daily, which
shall include all Accounts that have been created since the date of the last
assignment, together with copies of invoices or invoice registers related
thereto. Each Borrower Party shall keep accurate and complete records of the
Accounts and all payments and collections thereon.
Section 6.14 Administration of Accounts.
(a) The Administrative Agent retains the right after the
occurrence and during the continuance of an Event of Default to notify the
Account Debtors that the Accounts have been assigned to the Administrative
Agent, for the benefit of the Lender Group, and to collect the Accounts directly
in its own name and to charge the collection costs and expenses, including
attorneys' fees, to the Borrowers. The Administrative Agent has no duty to
protect, insure, collect or realize upon the Accounts or preserve rights in
them. Each Borrower Party irrevocably makes, constitutes and appoints the
Administrative Agent as such Borrower Party's true and lawful attorney and
agent-in-fact to endorse such Borrower Party's name on any checks, notes, drafts
or other payments relating to, the Accounts which come into the Administrative
Agent's possession or under the Administrative Agent's control as a result of
its taking any of the foregoing actions. Additionally, the Administrative Agent,
for the benefit of the Lender Group, shall have the right to collect and settle
or adjust all disputes and claims directly with the Account Debtor and to
compromise the amount or extend the time for payment of the Accounts upon such
terms and conditions as the Administrative Agent may deem advisable, and to
charge the deficiencies, reasonable costs and expenses thereof, including
attorney's fees, to the Borrowers.
(b) If an Account includes a charge for any tax payable to any
governmental taxing authority, the Administrative Agent on behalf of the Lenders
is authorized, in its sole discretion, to pay the amount thereof to the proper
taxing authority for the account of the applicable Borrower Party and to make a
Base Rate Advance to the Borrowers to pay therefor. The Borrower Parties shall
notify the Administrative Agent if any Account includes any tax due to any
governmental taxing authority and, in the absence of such
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notice, the Administrative Agent shall have the right to retain the full
proceeds of the Account and shall not be liable for any taxes to any
governmental taxing authority that may be due by any Borrower Party by reason of
the sale and delivery creating the Account.
(c) Whether or not a Default has occurred, any of the
Administrative Agent's officers, employees or agents shall have the right, at
any time or times hereafter, in the name of the Lenders, or any designee of the
Lenders or the Borrower Parties, to verify the validity, amount or other matter
relating to any Accounts by mail, telephone, telegraph or otherwise. The
Borrower Parties shall cooperate fully with the Administrative Agent and the
Lenders in an effort to facilitate and promptly conclude any such verification
process.
Section 6.15 The Blocked Account.
(a) The Borrower Parties shall establish and maintain one or more
blocked accounts (each a "Blocked Account") pursuant to a lockbox arrangement
acceptable to the Administrative Agent with SunTrust Bank, any affiliate thereof
or any other bank(s) as may be selected by the Borrower Parties and approved by
the Administrative Agent. The Borrower Parties shall issue to each such bank an
irrevocable letter of instruction directing such bank to deposit all payments or
other remittances received in the lockbox to the Blocked Account. Each such
Blocked Account bank shall agree to the Administrative Agent's standard Blocked
Account Agreement or such variation thereof as shall be mutually satisfactory to
the Administrative Agent and such bank. All amounts which shall be deposited
into any Blocked Account shall immediately become the property of and be under
the sole dominion and exclusive control of the Administrative Agent, on behalf
of the Lender Group, and no Borrower Party shall have any right to withdraw such
amounts from the Blocked Account.
(b) The Borrower Parties shall take all steps to ensure that all
of their Account Debtors and all of their credit card processors forward all
items of payment to lockboxes established with the Blocked Account banks. Within
thirty (30) days of the Agreement Date or such later date as shall be acceptable
to the Administrative Agent in its reasonable discretion, the Borrower Parties
shall cause each of their credit card processors to enter into an agreement, in
form and substance satisfactory to the Administrative Agent, with the
Administrative Agent and the applicable Borrower Party pursuant to which the
applicable Borrower Party shall irrevocably instruct such credit card processor
to forward all items of payment owing to the Borrower Parties directly to a
Blocked Account.
(c) In the event that any Borrower Party shall at any time receive
any remittances of any of the foregoing directly or shall receive any other
funds representing proceeds of the Collateral, such Borrower Party shall hold
the same as trustee for the Administrative Agent, shall segregate such
remittances from its other assets, and shall promptly deposit the same into a
Blocked Account. All cash, cash equivalents, checks, notes, drafts or similar
items of payment (including, without limitation, from the sale of
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any assets under Section 8.7(b) or otherwise or constituting insurance or
condemnation proceeds) received by any Borrower Party otherwise than as provided
elsewhere in this Section 6.15(b) shall be deposited into a Blocked Account
promptly upon receipt thereof by such Borrower Party. Notwithstanding the
foregoing, the Target Retail Borrower Parties shall be permitted to retain as
▇▇▇▇▇ cash an amount up to $2,500 per retail center, determined on an average
basis, for use in the retail stores of such Target Retail Borrower Parties in
the ordinary course of business.
(d) If the Administrative Agent or any affiliate of the
Administrative Agent is a Blocked Account bank, on the Business day on which any
amount is deposited into the Blocked Account with the Administrative Agent or
any affiliate of the Administrative Agent in immediately available funds, the
Administrative Agent shall, without further consent of any Borrower Party,
withdraw such amount from such Blocked Account, deposit the same in the Loan
Account, and apply the same against the Obligations in the manner provided for
in Section 2.11 hereof; provided, however, and notwithstanding the foregoing,
that unless an Event of Default then exists and unless the Administrative
Borrower requests otherwise, no money on deposit in such Blocked Account shall
be applied against any Eurodollar Advance if such application would constitute a
prepayment of such Eurodollar Advance prior to its Payment Date, and such funds
shall be retained in such Blocked Account (and, upon the written request of the
Administrative Borrower, will be invested by the Administrative Agent in
overnight deposits for the Borrowers' account) until the earliest of (i) such
Payment Date, (ii) the next Business Day on which additional Obligations arise,
and (iii) the occurrence of an Event of Default, at which time such amount shall
be applied to such Eurodollar Advance or such Obligations (in accordance with
the provisions of Section 2.11 hereof), as the case may be.
(e) If any Blocked Account bank is not the Administrative Agent or
any affiliate of the Administrative Agent, all funds in the Blocked Account of
such other bank shall be deposited into the Clearing Account on a daily basis
(or, with respect to account number 07-083327 at First Hawaiian Bank, on each
Monday and each Thursday and, with respect to account number ▇▇▇▇▇▇▇▇ at
SouthTrust Bank, on each Wednesday) in immediately available funds. On the
Business Day on which any amount is deposited into the Clearing Account in
immediately available funds, the Administrative Agent shall withdraw such amount
from the Clearing Account, deposit the same in the Loan Account, and apply the
same against the Obligations in the manner provided for in Section 2.11 hereof;
provided, however, that notwithstanding the foregoing, unless an Event of
Default then exists and unless the Administrative Borrower requests otherwise,
no money on deposit in the Clearing Account shall be applied against any
Eurodollar Advance if such application would constitute a prepayment of such
Eurodollar Advance prior to its Payment Date, and such funds shall be retained
in the Clearing Account (and, upon the written request of the Administrative
Borrower, will be invested by the Administrative Agent in overnight deposits for
the Borrowers' account) until the earliest of (i) such Payment Date, (ii) the
next Business Day on which additional Obligations arise, and (iii)
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the occurrence of an Event of Default, at which time such amount shall be
applied to such Eurodollar Advance or such Obligations (in accordance with the
provisions of Section 2.11 hereof), as the case may be.
(f) As of the Agreement Date, all bank accounts and investment
accounts of the Borrower Parties are listed on Schedule 6.15 and such Schedule
designates which such accounts are deposit accounts. No Borrower Party shall
open any other deposit account unless the depository bank for such account shall
have entered into an agreement with the Administrative Agent substantially in
the form of the Blocked Account Agreement. In addition, no Borrower Party shall
maintain a balance in excess of the amount necessary to cover outstanding checks
drawn on such account in any other bank account or investment account (each a
"Non-Depository Account") unless and until such Borrower Party has delivered to
the Administrative Agent a control agreement in form and substance satisfactory
to the Administrative Agent executed by such Borrower Party, the Administrative
Agent and the financial institution where such account is located; provided,
however, that the Borrower Parties shall be entitled to maintain balances in
excess of such amounts necessary to cover outstanding checks drawn on such
Non-Depository Accounts (i) with respect to accounts of the Target Retail
Borrower Parties, in an amount not to exceed the amount described in the last
sentence of Section 6.15(b), (ii) with respect to the employee benefit trust
account number [8801663496] at [SunTrust Bank] or such other similar employee
benefit trust account, an amount not to exceed as of any date of determination
the Administrative Borrower's estimate of employee benefit claims to be paid in
the remaining portion of such fiscal year (or, with respect to any date of
determination in the last fiscal month of any fiscal year, the Administrative
Borrower's estimate of employee benefit claims to be paid in the remaining
portion of such fiscal year and during the next succeeding fiscal year) from
such date of determination] (provided, that at any time that a Default exists,
Borrower Parties shall not deposit additional funds into such account except to
the extent necessary to pay accrued and unpaid employee benefit claims that are
then due and payable) and (iii) with respect to all other Non-Depository
Accounts in an amount not to exceed $350,000 in the aggregate.
Section 6.16 Further Assurances. Each Borrower Party will promptly
cure, or cause to be cured, defects in the creation and issuance of any
Revolving Loan Notes and the execution and delivery of the Loan Documents
(including this Agreement), resulting from any act or failure to act by any
Borrower Party or any employee or officer thereof. Each Borrower Party at its
expense will promptly execute and deliver to the Administrative Agent and the
Lenders, or cause to be executed and delivered to the Administrative Agent and
the Lenders, all such other and further documents, agreements, and instruments
in compliance with or accomplishment of the covenants and agreements of the
Borrower Parties in the Loan Documents, including this Agreement, or to correct
any omissions in the Loan Documents, or more fully to state the obligations set
out herein or in any of the Loan Documents, or to obtain any consents, all as
may be necessary or appropriate in connection therewith as may be reasonably
requested.
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Section 6.17 Broker's Claims. Each Borrower Party hereby indemnifies
and agrees to hold the Administrative Agent and each of the Lenders harmless
from and against any and all losses, liabilities, damages, costs and expenses
which may be suffered or incurred by the Administrative Agent and each of the
Lenders in respect of any claim, suit, action or cause of action now or
hereafter asserted by a broker or any Person acting in a similar capacity
arising from or in connection with the execution and delivery of this Agreement
or any other Loan Document or the consummation of the transactions contemplated
herein or therein.
Section 6.18 Indemnity. Each Borrower Party will indemnify and hold
harmless each member of the Lender Group, each Affiliate thereof and each of
their respective employees, representatives, officers and directors (each an
"Indemnified Person") from and against any and all claims, liabilities,
investigations, losses, damages, actions, and demands by any party against the
Lender Group, or any of them resulting from any breach or alleged breach by the
Borrower Parties or any of them of any representation or warranty made
hereunder, or otherwise in any way relating to or arising out of the Revolving
Loan Commitment, this Agreement, any other Loan Document, or any other document
contemplated by this Agreement, the making, administration or enforcement of the
Loan Documents and the Loans or any Bank Product Documents, any transaction
contemplated hereby or any related matters unless, with respect to any of the
above, the Lender Group or any of them are determined by a final non-appealable
judgment of a court of competent jurisdiction to have acted or failed to act
with gross negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING
CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER. This Section 6.18 shall
survive termination of this Agreement.
Section 6.19 Environmental Matters.
(a) Each Borrower Party shall, and shall cause its Subsidiaries
to, comply in all material respects with the Environmental Laws and shall notify
the Administrative Agent within thirty (30) days in the event of any discharge
or discovery of any Hazardous Materials at, upon, under or within the Properties
in amounts that require remediation. Each Borrower Party shall forward to the
Administrative Agent copies of all documents alleging a violation of
Environmental Laws, all responses thereto and all documents submitted to
environmental agencies relative to remediation of Hazardous Materials on the
Properties, in each case, within thirty (30) days of receipt, delivery or
submission (as the case may be) of the same.
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(b) Promptly upon the written request of the Administrative Agent
from time to time, the Borrower Parties shall provide the Administrative Agent
with an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable to the Administrative Agent, to
assess with a reasonable degree of certainty the presence or absence of any
Hazardous Materials and the potential costs in connection with abatement,
cleanup or removal of any Hazardous Materials found on, under, at or within the
Properties. Such assessment or report shall be at Borrower Parties' expense if,
in the judgment of the Administrative Agent, there is reason to believe that a
violation of Environmental Laws has occurred.
(c) Each Borrower Party shall at all times indemnify and hold
harmless the Lender Group against and from any and all claims, suits, actions,
debts, damages, costs, losses, obligations, judgments, charges, and expenses, or
any nature whatsoever under or on account of the Environmental Laws including
the assertion of any lien thereunder, with respect to:
(i) any discharge of Hazardous Materials, the threat of a
discharge of any Hazardous Materials or the presence of any Hazardous
Materials affecting the Properties whether or not the same originates
or emanates from the Properties or any contiguous real estate including
any loss of value of the Properties as a result of any of the
foregoing;
(ii) any costs of removal or remedial action incurred by
the United States Government or any costs incurred by any other person
or damages from injury to, destruction of, or loss of natural
resources, including reasonable costs of assessing such injury,
destruction or loss incurred pursuant to any Environmental Laws;
(iii) liability for personal injury or property damage
arising under any statutory or common law tort theory (including
without limitation damages assessed) for the maintenance of a public or
private nuisance or for the carrying on of an abnormally dangerous
activity at or caused by any Borrower Party or Subsidiary of a Borrower
Party near the Properties; and/or
(iv) any other environmental matter affecting the
Properties within the jurisdiction of the Environmental Protection
Agency, any other federal agency, or any state or local environmental
agency.
(d) In the event of any discharge or discovery of any Hazardous
Materials at, upon, under or within the Properties in amounts that require
remediation, if the applicable Borrower Party or Subsidiary fails to begin the
remediation within thirty (30) days after notice to the Administrative Agent,
the Administrative Agent may at its election, but without the obligation to do
so, give such notices and/or cause such work to be performed at the Properties
and/or take any and all other actions as the Administrative Agent shall deem
necessary or advisable in order to ▇▇▇▇▇ the discharge of such Hazardous
Material,
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remove such Hazardous Material or cure such Borrower Party's or Subsidiary's
noncompliance.
(e) All of the representations, warranties, covenants and
indemnities of this Section 6.19 shall survive the termination of this
Agreement, the repayment of the Obligations and/or the release of the liens of
the Mortgages from the Properties that are subject to any Mortgage and shall
survive the transfer of any or all right, title and interest in and to the
Properties by the Borrower Parties or any Subsidiary to any party, whether or
not affiliated with the Borrower Parties.
Section 6.20 Key Man Life Insurance. Until the later of the date four
(4) years following the Agreement Date and the date all obligations of the
Parent under the Earnout Agreement have been satisfied, the Borrowers shall
timely pay all required premiums in respect of, and shall otherwise take all
actions as may be required on their parts in order to maintain in full force and
effect, key-man life insurance policies on the lives of S. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇ Gasperina, each in an aggregate face amount of not less than the
face amount of such policy as in effect on December 31, 2002, and, in the event
that any such policy is not renewed or is cancelled at the option of the insurer
for any reason other than failure on the part of the Borrowers to pay the
required premiums or to take any other action required to maintain such policy
in full force and effect, the Borrowers shall use commercially reasonable
efforts to replace such policy in an aggregate face amount of not less than the
face amount of such policy as in existence on December 31, 2002; and all such
key-man life insurance policies shall be assigned to the Administrative Agent,
for the benefit of the Lender Group, as Collateral pursuant to the Assignment of
Life Insurance Policy.
Section 6.21 Formation of Subsidiaries. At the time of the formation of
any direct or indirect Subsidiary of any Borrower or the acquisition of any
direct or indirect Subsidiary of any Borrower after the Agreement Date which is
permitted under this Agreement Party, the Borrower Parties, as appropriate,
shall (a) cause such new Domestic Subsidiary to provide to the Administrative
Agent, for the benefit of the Lender Group, a joinder and supplement to this
Agreement substantially in the form of Exhibit M attached hereto (each a
"Guaranty Supplement"), pursuant to which such new Domestic Subsidiary shall
agree to join as a Guarantor of the Obligations under Article 3, a supplement to
the Security Agreement, and such other security documents (including, without
limitation, Mortgages with respect to any real estate owned by such Subsidiary),
together with appropriate Uniform Commercial Code financing statements, all in
form and substance reasonably satisfactory to the Administrative Agent, (b)
provide to the Administrative Agent, for the benefit of the Lender Group, a
pledge agreement and appropriate certificates and powers or Uniform Commercial
Code financing statements, pledging all direct or beneficial ownership interest
in such new Subsidiary (regardless of whether owned by a Borrower Party or a
Subsidiary of a Borrower Party or a minority shareholder), in form and substance
reasonably satisfactory to the Administrative Agent; provided, however, that
with respect to any new Foreign Subsidiary, such pledge shall be
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limited to sixty-five percent (65%) of the Equity Interests of such Subsidiary,
and (c) provide to the Administrative Agent, for the benefit of the Lender
Group, all other documentation, including one or more opinions of counsel
satisfactory to the Administrative Agent, which in its reasonable opinion is
appropriate with respect to such formation and the execution and delivery of the
applicable documentation referred to above. Any document, agreement or
instrument executed or issued pursuant to this Section 6.21 shall be a "Loan
Document" for purposes of this Agreement.
Section 6.22 Oxford Receivables Company. Notwithstanding anything
herein or in any Loan Document to the contrary, Oxford Receivables Company shall
not engage in any material business activity or incur any material Indebtedness
on or after the Agreement Date. The Borrower Parties and their Subsidiaries
(other than Oxford Recievables Company) shall not make any investment in, or
loan to, Oxford Receivables Company after the Agreement Date other than any
nominal amount incurred by Oxford Receivables Company in connection with its
wind down. On or before July 31, 2003, the Administrative Borrower shall deliver
to the Administrative Agent evidence that Oxford Receivables Company has been
dissolved or merged into another Borrower Party.
ARTICLE 7.
INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or the Borrowers
have a right to borrow, or have Letters of Credit issued, hereunder (whether or
not the conditions to borrowing have been or can be fulfilled) and unless the
Majority Lenders shall otherwise give their prior consent in writing, the
Administrative Borrower will furnish or cause to be furnished to each member of
the Lender Group at their respective offices the following items; provided,
however, that the Administrative Borrower, at its option, may deliver such items
described in Sections 7.1, 7.2, 7.3, 7.5(a), 7.5(b), 7.5(d) and 7.6(h) to the
Administrative Agent with instructions to post such items on "IntraLinks" or any
similar website for viewing by the Lenders or to send such items to the Lenders
via electronic mail and the Administrative Agent shall so post such items within
a reasonable period of time after delivery thereby by the Administrative
Borrower to it and such posting or sending via electronic mail shall constitute
delivery of such items to the Lenders:
Section 7.1 Monthly and Quarterly Financial Statements and Information.
(a) Within thirty (30) days after the last day of each fiscal month in each
fiscal year of the Parent (or, with respect to the May fiscal month of each
fiscal year of the Parent, within forty-five days (45) after the last day
thereof), the balance sheet of the Parent as at the end of such fiscal month,
and the related statement of income and retained earnings and related statement
of cash flows for such fiscal month and for the fiscal year to date period
(starting with the Agreement Date) ended with the last day of such fiscal month,
which financial statements shall, (a) set forth in comparative form the figures
for the applicable
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period set forth in the projections provided by the Borrower Parties pursuant to
Section 4.1, as amended or superseded by projections delivered pursuant to
Section 7.5(d), as modified by amendments to such projections delivered pursuant
to Section 7.6(e), and (b) set forth in comparative form such figures as at the
end of such month during the previous fiscal year and for such month during the
previous fiscal year, all of which shall be on a consolidated basis. In
addition, the Administrative Borrower shall deliver such financial statements
with respect to the Target and its Subsidiaries as a group and the Parent and
its Subsidiaries (other than the Target and its Subsidiaries) as a group,
together with a statement of eliminating entries between such groups. All such
financial statements delivered under this Section 7.1(a) shall be certified by
an Authorized Signatory of the Parent to be, in his or her opinion, complete and
correct in all material respects and, with respect to the financial statements
of the Parent and its Subsidiaries on a consolidated basis, to present fairly in
accordance with GAAP the financial position of the Parent and its Subsidiaries,
as at the end of such period and the results of operations for such period, and
for the elapsed portion of the year (starting with the Agreement Date) ended
with the last day of such period, subject only to normal year-end adjustments.
(b) Within forty-five (45) days after the last day of each fiscal
quarter in each fiscal year of the Parent, the balance sheet of the Parent as at
the end of such fiscal quarter, and the related statement of income and retained
earnings and related statement of cash flows for such fiscal quarter which
financial statements shall, (a) set forth in comparative form the figures for
the applicable period set forth in the projections provided by the Borrower
Parties pursuant to Section 4.1, as amended or superseded by projections
delivered pursuant to Section 7.5(d), as modified by amendments to such
projections delivered pursuant to Section 7.6(e), and (b) set forth in
comparative form such figures as at the end of such quarter during the previous
fiscal year and for such quarter during the previous fiscal year, all of which
shall be on a consolidated basis. In addition, the Administrative Borrower shall
deliver such financial statements with respect to the Target and its
Subsidiaries as a group and the Parent and its Subsidiaries (other than the
Target and its Subsidiaries) as a group, together with a statement of
eliminating entries between such groups. All such financial statements delivered
under this Section 7.1(a) shall be certified by an Authorized Signatory of the
Parent to be, in his or her opinion, complete and correct in all material
respects and, with respect to the financial statements of the Parent and its
Subsidiaries on a consolidated basis, to present fairly in accordance with GAAP
the financial position of the Parent and its Subsidiaries, as at the end of such
period and the results of operations for such period, subject only to normal
year-end adjustments.
Section 7.2 Annual Financial Statements and Information; Certificate of
No Default. Within ninety (90) days after the end of each fiscal year of the
Parent, the audited balance sheet of the Parent as at the end of such year and
the related audited statements of income and retained earnings and related
audited statements of cash flows for such year, all of which shall be on a
consolidated basis with the other Borrower
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Parties, which financial statements shall, set forth in comparative form such
figures as at the end of and for the previous year, and shall be accompanied by
an opinion of independent certified public accountants of recognized standing
satisfactory to the Administrative Agent, stating that following an examination
thereof in accordance with generally accepted auditing standards such financial
statements are unqualified and prepared in all material respects in accordance
with GAAP, together with a statement of such accountants of the Parent
certifying that no Default under Sections 8.8, 8.9, 8.10 and 8.11 was detected
during the examination of the Borrower Parties.
Section 7.3 Performance Certificates. At the time the financial
statements are furnished pursuant to (x) Section 7.1 with respect to (I) each
fiscal month end, commencing with the fiscal month end immediately following the
Agreement Date through the fiscal month ended April 30, 2005, (II) each fiscal
quarter end and (y) Section 7.2, a certificate of an Authorized Signatory of the
Parent in the form of Exhibit N:
(a) (i) Setting forth as at the end of such fiscal month,
arithmetical calculations required to establish whether or not the Borrower
Parties were in compliance with the requirement of Section 8.8, and (ii) setting
forth as at the end of such quarter or year, as the case may be, the
arithmetical calculations required to establish whether or not the Borrower
Parties were in compliance with the requirements of Sections 8.8 and 8.9 and,
with respect to each fiscal year end, 8.10 and 8.11; and
(b) Stating that, to the best of his or her knowledge, no Default
has occurred as at the end of such month, quarter or year, as the case may be,
or, if a Default has occurred, disclosing each such Default and its nature, when
it occurred and whether it is continuing.
Section 7.4 Access to Accountants. The Administrative Borrower hereby
authorizes the Administrative Agent to communicate (and at the direction of the
Majority Lenders the Administrative Agent shall initiate such communication)
directly with the Borrower Parties' and their Subsidiaries' independent public
accountants and authorizes these accountants to disclose to the Administrative
Agent any and all financial statements and other supporting financial data,
including matters relating to the annual audit and copies of any arrangement
letter with respect to its business, financial condition and other affairs. On
or before the Agreement Date, the Administrative Borrower, on behalf of all of
the Borrower Parties and their Subsidiaries, shall deliver to their independent
public accountants a letter authorizing them to comply with the provisions of
this Section 7.4.
Section 7.5 Additional Reports.
(a) Within twenty (20) days after the end of each fiscal month or
more frequently as reasonably required by the Administrative Agent, the
Administrative Borrower shall deliver to the Administrative Agent and the
Lenders, a Borrowing Base Certificate as of the last day of the preceding fiscal
month or such other date reasonably
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required by the Administrative Agent, which shall be in such form as shall be
satisfactory to the Administrative Agent, setting forth the amount of Inventory
owned by the Borrowers, and specifically setting forth the amount of Eligible
Inventory and shall contain a categorical breakdown of all Accounts of the
Borrowers and a calculation of Eligible Accounts as of such last day of the
preceding month.
(b) Within twenty (20) days after the end of each fiscal month or
more frequently as required by the Administrative Agent in its discretion if
Availability falls below $22,500,000 (or with respect to any date of
determination in December 2003, January 2004, February 2004, December 2004,
January 2005, February 2005, or February 2006, $15,000,000), the Administrative
Borrower shall deliver to the Administrative Agent and to any Lender requesting
the same, in form acceptable to the Administrative Agent, lockbox statements,
reports of sales and collections, and debit and credit adjustments, a summary of
aged Accounts (or at the reasonable request of the Administrative Agent,
detailed aged trial balance of all Accounts of the Borrowers existing as of the
last day of the preceding fiscal month or such other date reasonably required by
the Administrative Agent, specifying the names, and face value for each Account
Debtor obligated on an Account so listed) and all other information necessary to
calculate Eligible Accounts as of such last day of the preceding month or such
other date reasonably required by the Administrative Agent and, upon the
Administrative Agent's request therefor, copies of proof of delivery and the
original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts of the Borrowers
so scheduled and such other matters and information relating to the status of
then existing Accounts of the Borrowers as the Administrative Agent shall
reasonably request.
(c) Promptly upon receipt thereof, the Administrative Borrower
shall deliver to the Administrative Agent and the Lenders copies of all final
reports, if any, submitted to any Borrower Party or any Subsidiary of a Borrower
Party by its independent public accountants in connection with any annual or
interim audit of the Borrower Parties, or their Subsidiaries or any of them,
including, without limitation, any final management report, as applicable,
prepared in connection with the annual audit referred to in Section 7.2;
(d) On or before the date thirty (30) days following the
commencement of each fiscal year, the Administrative Borrower shall deliver to
the Administrative Agent and the Lenders the annual budget for the Borrower
Parties and their Subsidiaries approved by the board of directors of the Parent,
including forecasts of the income statement, the balance sheet and a cash flow
statement for such fiscal year on a month by month basis;
(e) To the extent not covered elsewhere in this Article 7,
promptly after the sending thereof, the Borrower Parties shall, and shall cause
their Subsidiaries to, deliver to the Administrative Agent and the Lenders
copies of all financial statements, reports
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and other information which any Borrower Party or any Subsidiary, as applicable,
sends to any holder of its Indebtedness (including the Senior Notes Debt) or its
securities or which any Borrower Party or any Subsidiary files with the
Securities and Exchange Commission or any national securities exchange;
(f) If there is a material change in GAAP after May 31, 2002 that
affects the presentation of the financial statements referred to in Sections 7.1
and 7.2, then, in addition to delivery of such financial statements, and on the
date such financial statements are required to be delivered, the Administrative
Borrower shall furnish the adjustments and reconciliations necessary to enable
the Borrowers and each Lender to determine compliance with each of the covenants
set forth in Sections 8.8, 8.9, 8.10 and 8.11, all of which shall be determined
in accordance with GAAP consistently applied;
(g) Promptly upon the effective date thereof, the Borrower Parties
shall provide to the Administrative Agent a copy of each amendment to any
factoring agreement referred to in the definition of Eligible Factored Accounts
(With Recourse) or Eligible Factored Accounts (Without Recourse). In addition,
promptly upon any Borrower Party obtaining knowledge thereof, it shall provide
notice to the Administrative Agent of any reserve created by a factor after the
Agreement Date;
(h) At any time that a Default exists and on and after any date of
request by the Administrative Agent in its reasonable discretion, the
Administrative Borrower shall provide to the Administrative Agent notice of the
termination of any lease of real property where Inventory is located promptly
upon termination of such lease; and
(i) From time to time and promptly upon each request the Borrower
Parties shall, and shall cause their Subsidiaries to, deliver to the
Administrative Agent on behalf of the Lenders such data, certificates, reports,
statements, opinions of counsel, documents, or further information regarding the
business, assets, liabilities, financial position, projections, results of
operations, or business prospects of each of the Borrower Parties, or such
Subsidiaries, or any of them, as the Administrative Agent may reasonably
request.
Section 7.6 Notice of Litigation and Other Matters.
(a) Within five (5) Business Days of any Borrower Party's
obtaining knowledge of the institution of, or a written threat of, any action,
suit, governmental investigation or arbitration proceeding against any Borrower
Party or a Subsidiary of a Borrower Party, any Property, which action, suit,
governmental investigation or arbitration proceeding, if adversely determined,
would expose, in such Borrower Party's or such Subsidiary's reasonable judgment,
as applicable, any Borrower Party or such Subsidiary, as applicable, to
liability in an aggregate amount in excess of $7,500,000, the Administrative
Borrower shall notify the Lender Group of the occurrence thereof, and the
Administrative Borrower shall provide such additional information with respect
to such matters as the Lender Group may reasonably request.
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(b) Promptly upon the occurrence of any default (whether or not
any Borrower Party or any Subsidiary of a Borrower Party, as applicable, has
received notice thereof from any other Person) on Indebtedness of any Borrower
Party or any Subsidiary, as applicable, which singly, or in the aggregate exceed
$5,000,000, the Administrative Borrower shall notify the Administrative Agent
and the Lenders of the occurrence thereof;
(c) Promptly upon any Borrower Party's receipt of notice or the
pendency of any proceeding for the condemnation or other taking of any real
property of any Borrower Party constituting Collateral, the Administrative
Borrower shall notify the Administrative Agent and the Lenders of the occurrence
thereof;
(d) Promptly upon any Borrower Party's receipt of notice of any
event that could reasonably be likely to result in a Materially Adverse Effect,
the Administrative Borrower shall notify the Administrative Agent and the
Lenders of the occurrence thereof;
(e) Promptly following any material amendment or change to the
budget submitted to the Administrative Agent and the Lenders pursuant to Section
7.5(d) hereof, the Administrative Borrower shall notify the Administrative Agent
and the Lenders of the occurrence thereof;
(f) Immediately following any (i) Default under any Loan Document,
or default by any Borrower Party under the Senior Notes Documents, or (ii)
default under any other agreement (other than those referenced in clause (i) of
this Section 7.6(f) above) to which any Borrower Party or a Subsidiary of a
Borrower Party, as applicable, is a party or by which any Borrower Party's or
any such Subsidiary's properties is bound which could reasonably be expected to
have a Materially Adverse Effect, then the Administrative Borrower shall notify
the Administrative Agent and the Lenders of the occurrence thereof giving in
each case the details thereof and specifying the action proposed to be taken
with respect thereto;
(g) Promptly but in any event within ten (10) Business Days
following the occurrence of any Reportable Event or a non-exempt "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) which would subject any Borrower Party to any material penalty or tax
on "prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of
the Code with respect to any Plan of any Borrower Party or any of its ERISA
Affiliates that is subject to Title IV of ERISA or the institution or threatened
institution by the PBGC of proceedings under ERISA to terminate or to partially
terminate any such Plan or the commencement of any litigation regarding any such
Plan, or the failure by any Borrower Party to make any required contribution to
any such Plan, the Administrative Borrower shall notify the Administrative Agent
and the Lenders of the occurrence thereof provided such occurrence, proceeding,
litigation, or failure exposes such Borrower Party or ERISA Affiliate to
liability in an aggregate amount in excess of $7,500,000.
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(h) The Administrative Borrower shall deliver updates or
supplements to the following schedules (i) within forty-five days after the end
of the end of each fiscal year (other than the 2003 fiscal year), as of the last
day of such fiscal year: Schedule 5.1(c)-1, Schedule 5.1(c)-2, Schedule 5.1(d),
Schedule 5.1(h), Schedule 5.1(m), Schedule 5.1(o), Schedule 5.1(w)-1, Schedule
5.1(w)-2, Schedule 5.1(x)-1, Schedule 5.1(x)-2, Schedule 5.1(x)-3, Schedule
5.1(x)-4, Schedule 5.1(x)-5 and Schedule 5.1(x)-6, and (ii) within forty-five
days after the end of the end of each of the first and third fiscal quarters of
each fiscal year (other than the first fiscal quarter of the 2004 fiscal year),
as of the last day of such fiscal quarter): Schedule 6.11 and Schedule 6.15, in
each case, as may be required to render correct the representations and
warranties contained in the applicable sections to which such schedules relate
as of the last day of such fiscal quarter without giving effect to any
references therein to the "Agreement Date" in each case, appropriately marked to
show the changes made therein; provided that no such supplement to any such
Schedules or representation shall be deemed a waiver of any Default resulting
from the matters disclosed therein, except as consented to by the Majority
Lenders in writing.
ARTICLE 8.
NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or the Borrowers
have a right to borrow, or have Letters of Credit issued, hereunder (whether or
not the conditions to borrowing have been or can be fulfilled) and unless the
Majority Lenders shall otherwise give their prior consent in writing:
Section 8.1 Indebtedness. No Borrower Party will, or will permit any of
its Subsidiaries to, create, assume, incur, or otherwise become or remain
obligated in respect of, or permit to be outstanding, any Indebtedness except:
(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) The Senior Notes Debt in a principal amount not to exceed
$200,000,000;
(c) Indebtedness of the Parent to the Sellers under the Earnout
Agreement, subordinated to the Obligations pursuant to the Earnout Subordination
Agreement;
(d) Indebtedness of the Borrowers or any Subsidiary of the
Borrowers that is unsecured or secured by Permitted Liens described in clause
(f) of the definition of Permitted Liens set forth in Article 1 hereof
(including without limitation Capitalized Lease Obligations), collectively, not
to exceed the aggregate principal amount of $15,000,000 at any time;
(e) recourse obligations arising in connection with the sale of
Accounts permitted by Section 8.7 (it being understood and agreed that negative
credit balances
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under the applicable factoring arrangements shall not constitute Indebtedness
for the purposes of this Agreement);
(f) Guaranties permitted by Section 8.2;
(g) Obligations under Hedge Agreements not entered into for
speculative purposes and not exceeding the aggregate notional amounts of
$75,000,000 with respect thereto;
(h) Unsecured Indebtedness of a Borrower Party owed to another
Borrower Party;
(i) (A) Unsecured Indebtedness in an aggregate amount not to
exceed $10,000,000 at any time outstanding of the Foreign Subsidiaries owed to
the Borrower Parties and consisting of "due to/due from" transactions arising in
the ordinary course of business and other unsecured Indebtedness incurred in the
ordinary course of business, and (B) unsecured Indebtedness in an aggregate
amount not to exceed $40,000,000 at any time outstanding of the Borrower Parties
owed to the Foreign Subsidiaries and consisting of "due to/due from"
transactions arising in the ordinary course of business;
(j) other unsecured Indebtedness owed by Foreign Subsidiaries to
the Borrower Parties to the extent permitted under Section 8.5(e); and
(k) Reimbursement obligations in respect of letters of credit
existing as of the Agreement Date (that were not issued by an Issuing Bank and
identified as Existing Letters of Credit) identified on Schedule 8.1; provided,
however, that such letters of credit may not be amended to increase the stated
amount thereof or to extend the stated expiration date thereof.
Section 8.2 Guaranties. No Borrower Party will, or will permit any of
its Subsidiaries to, at any time guarantee or enter into or assume any Guaranty,
or be obligated with respect to, or permit to be outstanding, any Guaranty,
other than (a) guaranties of the Obligations, (b) guaranties of obligations
under repurchase agreements of any Borrower Party entered into in connection
with the sale of products in the ordinary course of business of such Borrower
Party, (c) guaranties of obligations under agreements of any Borrower Party
entered into in connection with the acquisition of services, supplies, and
equipment in the ordinary course of business of such Borrower Party, (d)
endorsements of instruments in the ordinary course of business, (e) guaranties
of the Senior Notes Debt as long as such guarantor is also a Guarantor of the
Obligations and (f) guaranties by any Borrower Party of any obligation of any
other Borrower Party to the extent such obligation is not prohibited hereunder.
Section 8.3 Liens. No Borrower Party will, or will permit any
Subsidiary to, create, assume, incur, or permit to exist or to be created,
assumed, or permitted to exist,
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directly or indirectly, any Lien on any of its property, real or personal, now
owned or hereafter acquired, except for Permitted Liens.
Section 8.4 Restricted Payments and Purchases. No Borrower Party shall,
or shall permit any Subsidiary to, directly or indirectly declare or make any
Restricted Payment or Restricted Purchase, or set aside any funds for any such
purpose, other than Dividends on common stock which accrue (but are not paid in
cash) or are paid in kind or Dividends on preferred stock which accrue (but are
not paid in cash) or are paid in kind; provided, however, that (a) any
Subsidiary of the Parent may make Restricted Payments to the Parent or any other
Subsidiary of the Parent that owns Equity Interests of such Subsidiary making
such Restricted Payment; (b) the Parent may make regularly scheduled payments of
interest due on the Senior Notes to the holders thereof in accordance with the
terms of the Indenture as in effect on the Agreement Date or as amended
thereafter in accordance with Section 8.13 hereof; (c) the Parent may make
payments to the Sellers to the extent permitted by the Earnout Subordination
Agreement as it exists on the Agreement Date or as amended thereafter in
accordance with Section 8.13 hereof; (d) the Parent may make Restricted Payments
if (i) no Default has occurred and is continuing or would result from the making
of such Restricted Payment, (ii) after giving Pro Forma Effect to such
Restricted Payment, the ratio of Total Debt to EBITDA for the four (4) fiscal
quarters of the Parent immediately preceding the date of such Restricted Payment
would have been at least 0.25 to 1.00 below the covenant level of the ratio of
Total Debt to EBITDA applicable during such period under Section 8.8, and (iii)
after giving effect to such Restricted Payment, the Availability is at least
$40,000,000; and (e) the Parent may issue the Equity Interests contemplated by
the Acquisition Agreement on the Agreement Date.
Section 8.5 Investments. No Borrower Party will, or will permit any of
its Subsidiaries to, make any loan or advance to, or otherwise acquire for
consideration evidences of Indebtedness or Equity Interests in any other Person,
except that (a) any Borrower Party or any Subsidiary of a Borrower Party may
purchase or otherwise acquire and own, (i) marketable, direct obligations of the
United States of America and its agencies maturing within three hundred
sixty-five (365) days of the date of purchase, (ii) commercial paper issued by
corporations, each of which shall (A) have a consolidated net worth of at least
$250,000,000, and (B) conduct substantially all of its business in the United
States of America, which commercial paper will mature within one hundred eighty
(180) days from the date of the original issue thereof and is rated "P-1" or
better by ▇▇▇▇▇'▇, or "A-1" or better by S&P, (iii) certificates of deposit
maturing within three hundred sixty-five (365) days of the date of purchase and
issued by a United States national or state bank having deposits totaling more
than $250,000,000, and whose short-term debt is rated "P-1" or better by ▇▇▇▇▇'▇
or "A-1" or better by S&P, (iv) up to $100,000 per institution and up to
$1,000,000 in the aggregate in (A) short-term obligations issued by any local
commercial bank or trust company located in those areas where such Borrower
Party or Subsidiary conducts its business, whose deposits are insured by the
Federal Deposit Insurance Corporation, or (B) commercial bank-insured
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money market funds, or any combination of investments described in clauses (A)
and (B), and (v) overnight investments with such financial institutions having a
short term deposit rating of "P-1" or better by ▇▇▇▇▇'▇, or "A-1" or better by
S&P; (b) any Borrower Party or Subsidiary of a Borrower Party may hold the
Investments in existence on the Agreement Date and described on Schedule 5.1(l);
(c) so long as no Default shall have occurred and be continuing or would result
therefrom, any Borrower Party or Subsidiary of a Borrower Party may convert any
of its Accounts that are in excess of ninety (90) days past due into notes or
Equity Interests from the applicable Account Debtor so long as the
Administrative Agent, for the benefit of the Lender Group, is granted a first
priority security interest in such Equity Interests or notes held by a Borrower
Party which Lien is perfected contemporaneously with the conversion of such
Account to Equity Interests or notes; (d) the Borrower Parties may hold the
Equity Interests of their respective Subsidiaries in existence as of the
Agreement Date and their Subsidiaries created after the Agreement Date in
accordance with Section 6.21 and Section 8.7(i); (e) so long as no Default shall
have occurred and be continuing or would result therefrom, the Borrower Parties
may make additional investments in their Foreign Subsidiaries in the form of
loans or additional equity contributions in an aggregate amount not to exceed
(excluding amounts owed by Foreign Subsidiaries described in Section 8.1(i))
$5,000,000 at any time outstanding; (f) any Borrower Party may make investments
in another Borrower Party; (g) so long as no Default shall have occurred and be
continuing or would result therefrom, the Foreign Subsidiaries may make
investments in joint ventures in an aggregate amount not to exceed $5,000,000 at
any time outstanding; (h) the Borrower Parties and their Subsidiaries may make
loans to employees in an aggregate amount not to exceed $500,000 at any time
outstanding; and (i) the Parent may consummate the Acquisition.
Section 8.6 Affiliate Transactions. No Borrower Party shall, or shall
permit any of its Subsidiaries to, enter into or be a party to any agreement or
transaction with any Affiliate except (a) as described on Schedule 8.6 or (b) in
the ordinary course of business and upon fair and reasonable terms that are no
less favorable to such Borrower Party or Subsidiary than it would obtain in a
comparable arms length transaction with a Person not an Affiliate of such
Borrower Party or Subsidiary and otherwise on terms consistent with the business
relationship of such Borrower Party or Subsidiary and such Affiliate prior to
the Agreement Date, if any.
Section 8.7 Liquidation; Change in Ownership, Name, or Year;
Disposition or Acquisition of Assets; Etc. No Borrower Party shall, or shall
permit any of its Subsidiaries to, at any time:
(a) Liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up its business (except that any Subsidiary of
the Borrowers may liquidate or dissolve itself in accordance with Applicable
Law);
103
(b) Sell, lease, abandon, transfer or otherwise dispose of, in a
single transaction or a series of related transactions, any assets, property or
business except for (i) the sale of Inventory in the ordinary course of business
at the fair market value thereof and for cash or cash equivalents, (ii) physical
assets used, consumed or otherwise disposed of in the ordinary course of
business, (iii) the sale or disposal of real property, improvements and
equipment with a sale value not greater than $5,000,000 in the aggregate for all
such assets that may be sold during any year if the purchase price therefor is
paid solely in cash or any non-cash proceeds received by a Borrower Party are
pledged to the Administrative Agent, for the benefit of the Lender Group,
pursuant to the Security Agreement or other documents or agreements in form and
substance reasonably satisfactory to the Administrative Agent, (iv) the sale of
Accounts consistent with past practices of such Borrower Party and pursuant to
factoring arrangements (including, without limitation, those factoring
arrangements existing on the Agreement Date and described on Schedule 8.7) which
shall (x) be satisfactory to the Administrative Agent, (y) not contain any term
permitting such Borrower Party to obtain any loan or advance, secured or
unsecured, from the applicable factor, and (z) be subject to a Factoring
Intercreditor Agreement, (v) the termination of leases in connection with retail
store closures so long as such retail stores closed do not (in the aggregate)
account for more than five percent (5%) of the EBITDA of the Parent and its
Subsidiaries for the four (4) fiscal quarter period ending on the last day of
the fiscal quarter ended immediately prior to any such store closure, and (vi)
sales permitted under Section 8.12;
(c) Become a partner or joint venturer with any third party on or
after the Agreement Date; provided, however, that, subject to the limitations
set forth in Sections 8.1 and 8.5, the Foreign Subsidiaries may enter into
partnerships and joint ventures after the Agreement Date;
(d) Acquire (i) all or any substantial part of the assets,
property or business of, or (ii) any assets that constitute a division or
operating unit of the business of, any other Person; provided, however, that the
Parent may consummate the Acquisition on the Agreement Date; provided further,
however, that Borrower Parties shall be permitted to purchase all or any
substantial part of the assets, property or business of, or any assets that
constitute a division or operating unit of the business of, any other Person so
long as (A) no Default exists or would be caused thereby and Borrowers deliver
to the Administrative Agent and the Lenders evidence satisfactory to the
Administrative Agent that the Borrower Parties will be in pro forma compliance
with this Agreement after giving effect to the acquisition, (B) the purchase
price (including, without limitation, cash received, assumption of any
Indebtedness and seller financing) for all such acquisitions in any year does
not exceed $15,000,000 in the aggregate plus Equity Interests of the Parent
issued to the applicable sellers and the purchase price (including, without
limitation, cash received, assumption of any Indebtedness and seller financing)
for all such acquisitions during the term of this Agreement does not exceed
$30,000,000 in the aggregate plus Equity Interests of the Parent issued to the
applicable sellers and (C) the Borrower Parties execute and deliver to the
Administrative Agent all documents required by Section 6.16
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and 6.21 and the other Loan Documents and any opinions reasonably requested by
the Administrative Agent regarding the creation and perfection of the security
interests of the Administrative Agent in the Collateral;
(e) Merge or consolidate with any other Person; provided, however,
that (i) any Borrower may merge into another Borrower so long as, with respect
to any merger with the Parent, the Parent is the surviving entity after such
merger, (ii) any Guarantor or Foreign Subsidiary may merge into any Borrower
Party so long as, with respect to any merger with a Borrower, such Borrower
shall be the surviving entity after such merger and, with respect to any merger
by a Foreign Subsidiary with a Guarantor, such Guarantor shall be the surviving
entity after such merger, and (iii) any Foreign Subsidiary may merge into
another Foreign Subsidiary;
(f) Change its corporate name without giving the Administrative
Agent thirty (30) days prior written notice of its intention to do so and
complying with all reasonable requirements of the Lender Group in regard
thereto;
(g) Change its year-end for accounting purposes from the fiscal
year ending on the Friday occurring closest to each May 31;
(h) Acquire any real estate; provided, however, that the Borrowers
and their Subsidiaries may acquire real estate so long as, in the case of an
acquisition by a Borrower Party, such Borrower Party shall promptly notify the
Administrative Agent of the acquisition thereof and, at the request of the
Administrative Agent, shall grant to the Administrative Agent, for the benefit
of the Lender Group, a first priority mortgage on such real estate in form and
substance reasonably satisfactory to the Administrative Agent and deliver to the
Administrative Agent such other documentation and opinions in connection with
the grant of such security interest as the Administrative Agent shall request,
including, without limitation, policies of title insurance, flood zone
certificates, financing statements, fixture filings and environmental audits,
and the Borrowers shall pay all recording costs, intangibles taxes and other
fees and costs including without limitation reasonable attorneys' fees and
expenses of counsel to the Administrative Agent incurred in connection
therewith; or
(i) Create any Subsidiary; provided, however, that (i) a Borrower
Party may create wholly owned Domestic Subsidiaries so long as such Borrower
Party and such Subsidiaries, as applicable, comply with Section 6.21 and (ii)
any Borrower Party may create direct Foreign Subsidiaries so long as such
Borrower Party and such Foreign Subsidiaries, as applicable, comply with Section
6.21.
Section 8.8 Ratio of Total Debt to EBITDA. The Borrower Parties shall
not permit (a) as of the last day of the fiscal month ended closest to June 30,
2003, and each fiscal month end thereafter through the fiscal month ended
closest to April 30, 2005, and (b) as of each fiscal quarter end after April 30,
2005, the ratio of Total Debt to EBITDA for the immediately preceding
twelve-month period ending with such fiscal month or
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fiscal quarter, as applicable, to be greater than the amount hereinbelow
specified for such period:
Period: Total Debt/EBITDA Ratio:
------- ------------------------
Fiscal month ended closest to June 30, 2003 through
December 31, 2003 4.50 to 1.00
Fiscal month ended closest to January 31, 2004 through
April 30, 2004 5.25 to 1.00
Fiscal month ended closest to May 31, 2004 through
December 31, 2004 4.25 to 1.00
Fiscal month ended closest to January 31, 2005 through
April 30, 2005 4.75 to 1.00
Fiscal quarter ended closest to May 31, 2005 and each
fiscal quarter thereafter 4.00 to 1.00
Section 8.9 Fixed Charge Coverage Ratio. The Borrower Parties shall not
permit for the fiscal quarter ended closest to August 31, 2003, and for each
fiscal quarter end thereafter, the Fixed Charge Coverage Ratio for the
immediately preceding four (4) fiscal quarter period to be less than the amount
hereinbelow specified for such period:
Quarters Ending Closest To: Ratio:
--------------------------- ------
August 31, 2003 through May 31, 2005 1.20 to 1.00
August 31, 2005 and thereafter 1.25 to 1.00
Section 8.10 Capital Expenditures. The Borrower Parties shall not, nor
shall they permit their Subsidiaries to, make or incur in the aggregate any
Capital Expenditures in any fiscal year in excess of $22,500,000; provided,
however, that in the event that the Borrower Parties make Capital Expenditures
less than such amounts in any fiscal year, up to $10,000,000 of the unused
available Capital Expenditures amount may be carried forward to increase the
Capital Expenditures limitation for the next succeeding fiscal year.
Section 8.11 Limitation on Leases. The Borrower Parties shall not, and
shall not permit their Subsidiaries to, create, incur, assume or suffer to
exist, any obligation for the payment of rent or hire for property or assets of
any kind whatsoever, whether real or
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personal, under leases or lease agreements (other than Capitalized Lease
Obligations) which would cause the aggregate amount of all such payments made by
the Borrower Parties pursuant to such lease or lease agreements during any
fiscal year to be increased from the amount of all of such payments made by the
Borrower Parties in the prior fiscal year by more than the amount set forth
below:
Fiscal Year Ending Closest To: Maximum Increase:
----------------------------- ----------------
May 31, 2004 $6,000,000
May 31, 2005 $6,500,000
May 31, 2006 $6,500,000
May 31, 2007 and thereafter $7,000,000
provided, however, that in the event that such lease payments increase by an
amount less than such amount set forth in the table above in any fiscal year, up
to fifty percent (50%) of the unused increase amount may be carried forward to
increase the limitation for increases in lease payments for the next succeeding
fiscal year.
Section 8.12 Sales and Leasebacks. No Borrower Party shall, or shall
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, with any third party whereby such Borrower Party shall sell or
transfer any property, real or personal, whether now owned or hereafter
acquired, and whereby such Borrower Party or such Subsidiary shall then or
thereafter rent or lease as lessee such property or any part thereof or other
property which such Borrower Party or such Subsidiary intends to use for
substantially the same purpose or purposes as the property sold or transferred
which would result in the sale or transfer of assets of the Borrower Parties and
their Subsidiaries in an aggregate amount exceeding $15,000,000 during the term
of the Agreement.
Section 8.13 Amendment and Waiver. No Borrower Party shall, or shall
permit any of its Subsidiaries to, enter into any amendment of or supplement to,
or agree to or accept any waiver, which would adversely affect the rights of
such Borrower Party or Subsidiary, or the Lender Group, or any of them, of (a)
its articles or certificate of incorporation or formation, by-laws or other
governing documents, (b) the Indenture or any of the other Senior Notes
Documents, (c) the Earnout Subordination Agreement or (d) the Acquisition
Documents.
Section 8.14 ERISA Liability. No Borrower Party shall fail to meet all
of the applicable minimum funding requirements of ERISA and the Code, without
regard to any waivers thereof, and, to the extent that the assets of any of
their Plans would be less (by $1,000,000 or more) than an amount sufficient to
provide all accrued benefits payable
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under such Plans, the Borrower Parties shall make the maximum deductible
contributions allowable under the Code (based on the Borrowers' current
actuarial assumptions). No Borrower Party shall become a participant in any
Multiemployer Plan.
Section 8.15 Prepayments. No Borrower Party shall, or shall permit any
of its Subsidiaries to, prepay, redeem, defease or purchase in any manner, or
deposit or set aside funds for the purpose of any of the foregoing, make any
payment in respect of principal of, or make any payment in respect of interest
on, (a) any Indebtedness (other than Indebtedness under the Earnout Agreement),
except the Borrowers may (i) make regularly scheduled payments of principal or
interest required in accordance with the terms of the instruments governing any
Indebtedness permitted hereunder, and (ii) make payments, including prepayments
permitted or required hereunder, (x) with respect to the Obligations and (y) as
expressly permitted by Section 8.4(b), or (b) the Indebtedness under the Earnout
Agreement except to the extent permitted by the Earnout Subordination Agreement.
Section 8.16 Negative Pledge. No Borrower Party shall, or shall permit
any of its Subsidiaries to, directly or indirectly, enter into any agreement
(other than the Loan Documents) with any Person that prohibits or restricts or
limits the ability of any Borrower Party or Subsidiary to create, incur, pledge,
or suffer to exist any Lien upon any of its respective assets except as set
forth in the Indenture as in effect on the Agreement Date or as amended
hereafter in accordance with Section 8.13 hereof, or restricts the ability of
any Subsidiary of the Borrowers to pay Dividends to the Borrowers.
Section 8.17 Inconsistent Agreements. No Borrower Party shall, or shall
permit any of its Subsidiaries to, enter into any contract or agreement which
would violate the terms hereof or any other Loan Document.
ARTICLE 9.
DEFAULT
Section 9.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or in
any Security Document or in any Hedge Agreement shall prove incorrect or
misleading in any material respect when made or deemed to have been made
pursuant to Section 5.4;
(b) (i) Any payment of any principal hereunder, or any
reimbursement obligations with respect to any Letter of Credit shall not be
received by the Administrative Agent on the date such payment is due, or (ii)
any payment of any interest
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hereunder or any fees payable hereunder or under the other Loan Documents shall
not be received by the Administrative Agent within one (1) Business Day from the
date on which such payment is due;
(c) Any Borrower Party shall default in the performance or
observance of any agreement or covenant contained in Section 2.12, 6.1, 6.5,
6.7, 6.15 or 6.21 or in Article 7 or Article 8 or shall default in the
performance or observance of any material covenant in any Security Document
(including, without limitation, any covenant as to the perfection of the
Administrative Agent's security interest in the Collateral);
(d) Any Borrower Party shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 9.1, and such default, if
curable, shall not be cured to the Majority Lenders' satisfaction within the
earlier of (i) a period of twenty (20) days from the date that such Borrower
Party knew or should have known of the occurrence of such default, or (ii) a
period of twenty (20) days after written notice of such default is given to such
Borrower Party;
(e) There shall occur any default in the performance or observance
of any agreement or covenant or breach of any representation or warranty
contained in any of the other Loan Documents or any Hedge Agreement (other than
this Agreement or the Security Documents or as otherwise provided in this
Section 9.1) which shall not be cured to the Majority Lenders' satisfaction
within the applicable cure period, if any, provided for in such Loan Document,
or, if there is no applicable cure period set forth in such Loan Document,
within the earlier of (i) a period of twenty (20) days from the date that any
Borrower Party knew of the occurrence of such default, or (ii) a period of
twenty (20) days after written notice of such default is given to the Borrower
Parties;
(f) There shall occur any Change of Control;
(g) (i) There shall be entered a decree or order for relief in
respect of any Borrower Party or any Subsidiary of Borrower Party under the
Bankruptcy Code, or any other applicable federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or similar official of any Borrower Party or any
Subsidiary of Borrower Party or of any substantial part of its properties, or
ordering the winding-up or liquidation of the affairs of any Borrower Party, or
(ii) an involuntary petition shall be filed against any Borrower Party or any
Subsidiary of Borrower Party and a temporary stay entered and (A) such petition
and stay shall not be diligently contested, or (B) any such petition and stay
shall continue undismissed for a period of sixty (60) consecutive days;
(h) Any Borrower Party or any Subsidiary of Borrower Party shall
commence an Insolvency Proceeding, or a Borrower Party or any Subsidiary of
Borrower Party shall consent to the institution of an Insolvency Proceeding or
to the appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other
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similar official of such Borrower Party or any Subsidiary of Borrower Party or
of any substantial part of its properties, or any Borrower Party or any
Subsidiary of Borrower Party shall fail generally to pay their respective debts
as they become due, or any Borrower Party or any Subsidiary of Borrower Party
shall take any action in furtherance of any such action;
(i) A final judgment (other than a money judgment or judgments
fully covered (except for customary deductibles or copayments not to exceed
$7,500,000 in the aggregate) by insurance as to which the insurance company has
acknowledged coverage) shall be entered by any court against any Borrower Party
or any Subsidiary of a Borrower Party for the payment of money which exceeds
$7,500,000, or a warrant of attachment or execution or similar process shall be
issued or levied against property of any Borrower Party or any Subsidiary of a
Borrower Party pursuant to a final judgment which, together with all other such
property of any Borrower Party or any Subsidiary of a Borrower Party, as
applicable, subject to other such process, exceeds in value $7,500,000 in the
aggregate, and if, within thirty (30) days after the entry, issue, or levy
thereof, such judgment, warrant, or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant, or process shall not have been paid or discharged;
(j) (i) There shall be at any time any "accumulated funding
deficiency," as defined in Section 3.02 of ERISA or in Section 412 of the Code,
with respect to any Plan maintained by any Borrower Party or any ERISA Affiliate
of a Borrower Party, or to which any Borrower Party or any of its ERISA
Affiliates has any liabilities, or any trust created thereunder; or (ii) a
trustee shall be appointed by a United States District Court to administer any
such Plan; or (iii) the PBGC shall institute proceedings to terminate any such
Plan; or (iv) any Borrower Party or any ERISA Affiliate of any Borrower Party
shall incur any liability to the PBGC in connection with the termination of any
such Plan; or (v) any Plan or trust created under any Plan of any Borrower Party
or any ERISA Affiliate of any Borrower Party shall engage in a non-exempt
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject any such Plan, any trust created
thereunder, any trustee or administrator thereof, or any party dealing with any
such Plan or trust to any material tax or penalty on "prohibited transactions"
imposed by Section 502 of ERISA or Section 4975 of the Code; or (vi) any
Borrower Party or any ERISA Affiliate of any Borrower Party shall enter into or
become obligated to contribute to a Multiemployer Plan in an aggregate amount
which, together with any liabilities in any of the foregoing clauses (i), (ii),
(iii) (iv) or (v) of this Section 9.1(j) is in excess of $7,500,000;
(k) There shall occur any default (after the expiration of any
applicable cure period) under the Senior Notes Documents, the Earnout Agreement
(other than arising as a result of a payment block pursuant to the Earnout
Subordination Agreement) or any other indenture, agreement, or instrument
evidencing Indebtedness of any Borrower Party
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or any Subsidiary of a Borrower Party in an aggregate principal amount exceeding
$5,000,000 (determined singly or in the aggregate with other Indebtedness);
(l) All or any portion of any Loan Document or of any Hedge
Agreement shall at any time and for any reason be declared to be null and void,
or a proceeding shall be commenced by any Borrower Party or any Affiliate
thereof, or by any governmental authority having jurisdiction over any Borrower
Party any Affiliate of any Borrower Party, seeking to establish the invalidity
or unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Borrower Party or any Affiliate of a Borrower Party
shall deny that it has any liability or obligation for the payment of any
Obligation purported to be created under any Loan Document or any Hedge
Agreement;
(m) There shall occur any default by any party under the
Acquisition Agreement or any other document or instrument delivered in
connection therewith (other than the Earnout Agreement), or any such document
shall cease to be in full force and effect (except pursuant to its terms) or
shall be declared null and void, or any party thereto shall deny it has any
further liability or obligation thereunder (except pursuant to its terms), which
in any such case could reasonably be expected to expose the Parent to a claim,
loss or liability in an aggregate amount in excess of $7,500,000; or
(n) The Acquisition shall not have become effective on the
Agreement Date.
Section 9.2 Remedies. If an Event of Default shall have occurred and
shall be continuing, in addition to the rights and remedies set forth elsewhere
in this Agreement and the Loan Documents and in any Hedge Agreements:
(a) With the exception of an Event of Default specified in Section
9.1(g) or (h), the Administrative Agent, at the direction of the Majority
Lenders, shall (i) terminate the Revolving Loan Commitments and the Letter of
Credit Commitment, or (ii) declare the principal of and interest on the Loans
and all other Obligations (other than any obligations as existing from time to
time of any Borrower Party to the Administrative Agent (or an affiliate of the
Administrative Agent) or any Lender (or an affiliate of a Lender) arising from
or in connection with any Hedge Agreements) to be forthwith due and payable
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in any Revolving Loan
Notes to the contrary notwithstanding, or both.
(b) Upon the occurrence and continuance of an Event of Default
specified in Sections 9.1(g) or (h), such principal, interest, and other
Obligations (other than any obligations as existing from time to time of any
Borrower Party to the Administrative Agent (or an affiliate of the
Administrative Agent) arising from or in connection with any Hedge Agreements)
shall thereupon and concurrently therewith become due and payable, and the
Revolving Loan Commitments and the Letter of Credit Commitment, shall forthwith
terminate, all without any action by the Lender Group, or any of them, or the
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Majority Lenders and without presentment, demand, protest, or other notice of
any kind, all of which are expressly waived, anything in this Agreement or in
any Revolving Loan Notes to the contrary notwithstanding.
(c) The Administrative Agent, with the concurrence of the Majority
Lenders, shall exercise all of the post-default rights granted to it and to them
under the Loan Documents or under Applicable Law. The Administrative Agent, for
the benefit of the Lender Group, shall have the right to the appointment of a
receiver for the Property of the Borrower Parties, and the Borrower Parties
hereby consent to such rights and such appointment and hereby waive any
objection the Borrower Parties may have thereto or the right to have a bond or
other security posted by the Lender Group or any of them in connection
therewith.
(d) In regard to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of any acceleration of
the Obligations pursuant to the provisions of this Section 9.2 or, upon the
request of the Administrative Agent, after the occurrence of an Event of Default
and prior to acceleration, the Borrowers shall promptly upon demand by the
Administrative Agent deposit in a Letter of Credit Reserve Account opened by
Administrative Agent for the benefit of the applicable Issuing Bank an amount
equal to one hundred and five percent (105%) of the aggregate then undrawn and
unexpired amount of such Letter of Credit Obligations. Amounts held in such
Letter of Credit Reserve Account shall be applied by the Administrative Agent to
the payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other Obligations in the manner set
forth in Section 2.11. Pending the application of such deposit to the payment of
the Reimbursement Obligations, the Administrative Agent shall, to the extent
reasonably practicable, invest such deposit in an interest bearing open account
or similar available savings deposit account and all interest accrued thereon
shall be held with such deposit as additional security for the Obligations.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied, and all other
Obligations shall have been paid in full, the balance, if any, in such Letter of
Credit Reserve Account shall be returned to the Borrowers. Except as expressly
provided hereinabove, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrowers.
(e) The rights and remedies of the Lender Group hereunder shall be
cumulative, and not exclusive.
ARTICLE 10.
THE ADMINISTRATIVE AGENT
Section 10.1 Appointment and Authorization. Each Lender hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its Revolving Loans and in any Revolving
Loan Notes irrevocably to appoint
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and authorize, the Administrative Agent to take such actions as its agent on its
behalf and to exercise such powers hereunder and under the other Loan Documents
as are delegated by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
hereby authorizes the Administrative Agent to execute and deliver each Loan
Document to which the Administrative Agent is, or is required to be, a party.
Neither the Administrative Agent nor any of its directors, officers, employees,
or agents shall be liable for any action taken or omitted to be taken by it
hereunder or in connection herewith, except for its own gross negligence or
willful misconduct as determined by a final non-appealable order of a court of
competent jurisdiction. Except as expressly otherwise provided in this
Agreement, the Administrative Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions which the Administrative
Agent is expressly entitled to take or assert under this Agreement and the other
Loan Documents, including (a) the determination of the applicability of
ineligibility criteria with respect to the calculation of the Borrowing Base,
(b) the making of Agent Advances pursuant to Section 2.1(e), and (c) the
exercise of remedies pursuant to Section 9.2, and any action so taken or not
taken shall be deemed consented to by the Lenders.
Section 10.2 Interest Holders. The Administrative Agent may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 10.2, as the holder of all of the
interests of such Lender in its Revolving Loans and in any Revolving Loan Notes
issued to it until written notice of transfer, signed by such Lender (or the
Person designated in the last notice filed with the Administrative Agent) and by
the Person designated in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent.
Section 10.3 Consultation with Counsel. The Administrative Agent may
consult with legal counsel selected by it and shall not be liable to any Lender
or any Issuing Bank for any action taken or suffered by it in good faith in
reliance on the advice of such counsel.
Section 10.4 Documents. The Administrative Agent shall not be under any
duty to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Revolving Loan Note, or any instrument,
document, or communication furnished pursuant hereto or in connection herewith,
and the Administrative Agent shall be entitled to assume that they are valid,
effective, and genuine, have been signed or sent by the proper parties, and are
what they purport to be.
Section 10.5 Administrative Agent and Affiliates. With respect to the
Revolving Loan Commitment and Loans, the Administrative Agent shall have the
same rights and powers hereunder as any other Lender, and the Administrative
Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of
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business with the Borrower Parties or any Affiliates of, or Persons doing
business with, the Borrower Parties, as if it were not the Administrative Agent
or affiliated with the Administrative Agent and without any obligation to
account therefor. The Lenders and the Issuing Banks acknowledge that the
Administrative Agent and its affiliates have other lending and investment
relationships with the Borrower Parties and their Affiliates and in the future
may enter into additional such relationships.
Section 10.6 Responsibility of the Administrative Agent. The duties and
obligations of the Administrative Agent under this Agreement are only those
expressly set forth in this Agreement. The Administrative Agent shall be
entitled to assume that no Default has occurred and is continuing unless it has
actual knowledge, or has been notified by the any Borrower Party, of such fact,
or has been notified by a Lender that such Lender considers that a Default or an
Event of Default has occurred and is continuing, and such Lender shall specify
in detail the nature thereof in writing. The Administrative Agent shall provide
each Lender with copies of such documents received from any Borrower Party as
such Lender may reasonably request.
Section 10.7 Action by Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent shall have been instructed
by the Majority Lenders to exercise or refrain from exercising such rights or to
take or refrain from taking such action, provided that the Administrative Agent
shall not exercise any rights under Section 9.2(a) or 9.2(c) of this Agreement
without the approval of the Majority Lenders. The Administrative Agent shall
incur no liability under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of its
judgment or which may seem to it to be necessary or desirable in the
circumstances.
(b) The Administrative Agent shall not be liable to the Lenders or
the Issuing Banks or any of them in acting or refraining from acting under this
Agreement in accordance with the instructions of the Majority Lenders (or all
Lenders if required by Section 11.12), and any action taken or failure to act
pursuant to such instructions shall be binding on all Lenders and the Issuing
Banks.
Section 10.8 Notice of Default. In the event that the Administrative
Agent or any Lender shall acquire actual knowledge, or shall have been notified
in writing, of any Default, the Administrative Agent or such Lender shall
promptly notify the Lenders and the Administrative Agent, and the Administrative
Agent shall take such action and assert such rights under this Agreement as the
Majority Lenders shall request in writing, and the Administrative Agent shall
not be subject to any liability by reason of its acting pursuant to any such
request. If the Majority Lenders shall fail to request the Administrative Agent
to take action or to assert rights under this Agreement in respect of any
Default
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within ten (10) days after their receipt of the notice of any Default from the
Administrative Agent or any Lender, or shall request inconsistent action with
respect to such Default, the Administrative Agent may, but shall not be required
to, take such action and assert such rights (other than rights under Article 9)
as it deems in its discretion to be advisable for the protection of the Lender
Group, except that, if the Majority Lenders have instructed the Administrative
Agent not to take such action or assert such right, in no event shall the
Administrative Agent act contrary to such instructions.
Section 10.9 Responsibility Disclaimed. The Administrative Agent shall
not be under any liability or responsibility whatsoever as Administrative Agent:
(a) To any Borrower Party or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
Lender or Lenders of any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, as a consequence of any failure or
delay in performance by, or any breach by, any Borrower Party or any other
obligor of any of its obligations under this Agreement or any Revolving Loan
Notes or any other Loan Document; or
(c) To any Lender or Lenders for any statements, representations,
or warranties in this Agreement, or any other document contemplated by this
Agreement or any information provided pursuant to this Agreement, any other Loan
Document, or any other document contemplated by this Agreement, or for the
validity, effectiveness, enforceability, or sufficiency of this Agreement, any
Revolving Loan Notes, any other Loan Document, or any other document
contemplated by this Agreement.
Section 10.10 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrowers) pro rata in
accordance with their Revolving Commitment Ratios from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
investigations, costs, expenses (including fees and expenses of experts, agents,
consultants, and counsel), or disbursements of any kind or nature (whether or
not the Administrative Agent is a party to any such action, suit or
investigation) whatsoever which may be imposed on, incurred by, or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement or any action taken or omitted by the Administrative Agent under this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, except that no Lender shall be liable to the Administrative Agent for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements resulting from the
gross negligence or willful misconduct of the Administrative Agent as determined
by a final non-appealable order of a court of competent jurisdiction. This
provision is for the benefit of the Administrative Agent and shall not in any
way limit the obligations of the
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Borrower Parties under Section 6.18. The provisions of this Section 10.10 shall
survive the termination of this Agreement.
Section 10.11 Credit Decision. Each Lender represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and to
make its Advances it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrower
Parties and that it has made an independent credit judgment, and that it has not
relied upon information provided by the Administrative Agent; and
(b) So long as any portion of the Obligations remains outstanding,
it will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower Parties.
Section 10.12 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrowers. Upon any such resignation, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent (with the consent of the Borrowers if no Event of Default then exists). If
no successor Administrative Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be any Lender or a commercial bank organized
under the laws of the United States of America or any political subdivision
thereof which has combined capital and reserves in excess of $500,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10.12 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent.
Section 10.13 Administrative Agent May File Proofs of Claim. The
Administrative Agent may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel), the Lenders and the Issuing Banks allowed in
any judicial proceedings relative to any Borrower Party, or any of their
respective creditors or property, and shall be entitled and empowered to
collect, receive and distribute any monies, securities or other property
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payable or deliverable on any such claims and any custodian in any such judicial
proceedings is hereby authorized by each Lender and Issuing Bank to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders and
the Issuing Banks, to pay to the Administrative Agent any amount due to the
Administrative Agent for the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent, its agents, financial advisors and
counsel, and any other amounts due the Administrative Agent under Section 11.2.
Nothing contained in this Agreement or the other Loan Documents shall be deemed
to authorize the Administrative Agent to authorize or consent to or accept or
adopt on behalf of any Lender or any Issuing Bank any plan of reorganization,
arrangement, adjustment or composition affecting this Agreement, any Revolving
Loan Notes, the Letters of Credit or the rights of any holder thereof, or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or any Issuing Bank in any such proceeding.
Section 10.14 Collateral. The Administrative Agent is hereby authorized
to hold all Collateral pledged pursuant to any Loan Document and to act on
behalf of the Lender Group, in its own capacity and through other agents
appointed by it, under the Security Documents; provided, that the Administrative
Agent shall not agree to the release of any Collateral except in accordance with
the terms of this Agreement. The Lender Group acknowledges that the Loans, any
Overadvances, all Obligations with respect to Bank Products Documents and all
interest, fees and expenses hereunder constitute one Indebtedness, secured by
all of the Collateral. The Administrative Agent hereby appoints each Lender and
each Issuing Bank as its agent (and each Lender and Issuing Bank hereby accepts
such appointment) for the purpose of perfecting the Administrative Agent's Liens
in assets which, in accordance with the UCC, can be perfected by possession.
Should any Lender or Issuing Bank obtain possession of any such Collateral,
subject to the limitations set forth in the Block Account Agreements, promptly
upon the Administrative Agent's request therefor shall deliver such Collateral
to the Administrative Agent or in accordance with the Administrative Agent's
instructions.
Section 10.15 Release of Collateral.
(a) Each Lender and each Issuing Bank hereby directs, in
accordance with the terms of this Agreement, the Administrative Agent to release
any Lien held by the Administrative Agent for the benefit of the Lender Group:
(i) against all of the Collateral, upon final and
indefeasible payment in full of the Obligations and termination of this
Agreement; or
(ii) against any part of the Collateral sold or disposed
of by the Borrower Parties if such sale or disposition is permitted by
Section 8.7 or is otherwise consented to by the requisite Lenders for
such release as set forth in Section 11.12, as certified to the
Administrative Agent by the Administrative
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Borrower in a certificate of an Authorized Signatory of the
Administrative Borrower.
(b) Each Lender and each Issuing Bank hereby directs the
Administrative Agent to execute and deliver or file or authorize the filing of
such termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 10.15
promptly upon the effectiveness of any such release. Upon request by the
Administrative Agent at any time, the Lenders and the Issuing Banks will confirm
in writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this Section 10.15.
Section 10.16 Additional Agents. None of the Lenders or other entities
identified on the facing page of this Agreement as an "Joint Lead Arranger",
"Syndication Agent", "Co-Syndication Agent", or "Co-Documentation Agents" shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement or any other Loan Document other than those applicable to all Lenders
as such; provided, however, that the Syndication Agent shall have certain rights
under Sections 4.1 and 4.3 to approve certain documents delivered in connection
with the closing of this Agreement. Without limiting the foregoing, none of the
Lenders so identified shall have or be deemed to have any fiduciary relationship
with any other Lender. Each Lender acknowledges that it has not relied, and will
not rely, on any of the Lenders or other entities so identified in deciding to
enter into this Agreement or any other Loan Document or in taking or not taking
action hereunder or thereunder.
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given five (5) days after
deposit in the mail, designated as certified mail, return receipt requested,
post-prepaid, or one (1) day after being entrusted to a reputable commercial
overnight delivery service, or when delivered to the telegraph office or sent
out by telex or telecopy (or to the extent specifically permitted under Article
7 only, by electronic means) addressed to the party to which such notice is
directed at its address determined as in this Section 11.1. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
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(i) If to any Borrower Party, to the
Administrative Borrower in care of such Borrower
Party at:
Oxford Industries, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
King & Spalding LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Administrative Agent, to it at:
SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a
division of SunTrust Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code ATL 7662
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Director - Agency Services
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Lenders, to them at the addresses
set forth on the signature pages of this Agreement.
(iv) If to the Issuing Banks, at the addresses
set forth on the signature pages of this Agreement.
Copies shall be provided to Persons other than parties hereto only in the case
of notices under Article 9.
(b) Any party hereto may change the address to which notices shall
be directed under this Section 11.1 by giving ten (10) days' written notice of
such change to the other parties.
Section 11.2 Expenses. The Borrowers agree to promptly pay or
reimburse:
(a) All out-of-pocket expenses of the Administrative Agent and
Syndication Agent in connection with the preparation, negotiation, execution,
delivery and syndication of this Agreement and the other Loan Documents and any
Bank Products, the transactions contemplated hereunder and thereunder, and the
making of the initial Advance hereunder, including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative Agent and
the Syndication Agent, and allocated costs for services of internal counsel for
the Administrative Agent and the Syndication Agent;
(b) All out-of-pocket expenses of the Administrative Agent in
connection with the administration of the transactions contemplated in this
Agreement or the other Loan Documents or any Bank Products, and the preparation,
negotiation, execution, and delivery of any waiver, amendment, or consent by the
Lenders relating to this Agreement or the other Loan Documents or any Bank
Products, including, but not limited to, (i) all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Administrative
Agent, and the reasonably allocated costs and expenses of internal legal
services of the Administrative Agent; (ii) costs and expenses (including
reasonable attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents or in respect of any Bank Products and the transactions contemplated
thereby; (iii) costs and expenses of lien and title searches and title
insurance; (iv) taxes, fees and other charges for recording any mortgages,
filing financing statements and continuations, and other
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actions to perfect, protect, and continue the Administrative Agent's Liens
(including costs and expenses paid or incurred by the Administrative Agent in
connection with the consummation of this Agreement); (v) sums paid or incurred
to pay any amount or take any action required of the Borrower Parties under the
Loan Documents or in respect of any Bank Products that the Borrower Parties fail
to pay or take; (vi) costs of appraisals, inspections, and verifications of the
Collateral and other due diligence, including reasonable out-of-pocket expenses
for travel, lodging, and meals for inspections of the Collateral and the
Borrower Parties' operations by the Administrative Agent plus the Administrative
Agent's then generally-applicable and customary charge for field examinations
and audits or any reappraisals and the preparation of reports thereof; and (vii)
costs and expenses of forwarding loan proceeds, collecting checks and other
items of payment, and establishing and maintaining Blocked Accounts and lock
boxes, and costs and expenses of preserving and protecting the Collateral;
(c) All out-of-pocket costs and expenses of the Administrative
Agent in connection with any restructuring, refinancing, or "work out" of the
transactions contemplated by this Agreement, and of obtaining performance under
this Agreement or the other Loan Documents or in respect of any Hedge
Agreements, and all out-of-pocket costs and expenses of collection of the
Administrative Agent if default is made in the payment of the Obligations, which
in each case shall include fees and out-of-pocket expenses of counsel for
Administrative Agent, and the fees and out-of-pocket expenses of any experts of
the Administrative Agent, or consultants of the Administrative Agent, including,
in each case, but without in any way limiting the generality of the foregoing,
allocated costs for service of internal counsel for the Administrative Agent. In
addition to the foregoing, upon the occurrence and during the continuance of an
Event of Default, the Borrower Parties shall reimburse the other members of the
Lender Group for the out of pocket costs and expenses of one counsel for the
Lender Group (in addition to the Administrative Agent's counsel referred to
above); and
(d) All taxes, assessments, general or special, and other charges
levied on, or assessed, placed or made against any of the Collateral, any
Revolving Notes or the Obligations.
Section 11.3 Waivers. The rights and remedies of the Administrative
Agent and the Lenders under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Lender Group, or any of them, or the
Majority Lenders in exercising any right shall operate as a waiver of such
right. The Lender Group expressly reserves the right to require strict
compliance with the terms of this Agreement in connection with any funding of a
request for an Advance. In the event the Lenders decide to fund a request for an
Advance at a time when the Borrowers are not in strict compliance with the terms
of this Agreement, such decision by the Lenders shall not be deemed to
constitute an undertaking by the Lenders to fund any further requests for
Advances or preclude the Lenders from exercising any rights available to the
Lenders under the Loan Documents
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or at law or equity. Any waiver or indulgence granted by the Lenders or by the
Majority Lenders shall not constitute a modification of this Agreement, except
to the extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Lenders at variance with the terms of the Agreement
such as to require further notice by the Lenders of the Lenders' intent to
require strict adherence to the terms of the Agreement in the future. Any such
actions shall not in any way affect the ability of the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Lenders are party, relating to the
Borrowers.
Section 11.4 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
except to the extent limited by Applicable Law, upon the occurrence of an Event
of Default and during the continuation thereof, the Lenders and any subsequent
holder or holders of the Obligations are hereby authorized by the Borrower
Parties at any time or from time to time, without notice to any Borrower Party
or to any other Person, any such notice being hereby expressly waived, to
set-off and to appropriate and apply any and all deposits (general or special,
time or demand, including, but not limited to, Indebtedness evidenced by
certificates of deposit, in each case whether matured or unmatured, but not
including any amounts held by the Administrative Agent or any of its Affiliates
in any escrow account) and any other Indebtedness at any time held or owing by
the Lenders or such holder to or for the credit or the account of any Borrower
Party, against and on account of the obligations and liabilities of the Borrower
Party, to the Lenders or such holder under this Agreement, any Revolving Loan
Notes, and any other Loan Document, and any Bank Products Documents, including,
but not limited to, all claims of any nature or description arising out of or
connected with this Agreement, any Revolving Loan Notes, or any other Loan
Document, or any Bank Products Documents, irrespective of whether or not (a) the
Lenders or the holder of the Obligations shall have made any demand hereunder or
(b) the Lenders shall have declared the principal of and interest on the Loans
and any Revolving Loan Notes and other amounts due hereunder to be due and
payable as permitted by Section 9.2 and although said obligations and
liabilities, or any of them, shall be contingent or unmatured. Any sums obtained
by any Lender or by any subsequent holder of the Obligations shall be subject to
the application of payments provisions of Article 2.
Section 11.5 Assignment.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that no Borrower Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by any Borrower
Party without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and
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assigns permitted hereby and, to the extent expressly contemplated hereby, the
Affiliates of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Loan Commitment and the Revolving Loans at the time
owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Revolving Loan Commitment and
the Revolving Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Revolving Loan Commitment, of the assigning Lender
subject to each such assignment, (determined as of the date the Assignment and
Assumption Agreement with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000, unless each of the
Administrative Agent and, so long as no Default has occurred and is continuing,
the Administrative Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed), and (ii) the parties (but no Borrower Party)
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption Agreement, together with a processing and recordation
fee of $1,000 (which fee shall not be required in the case of an assignment to
an Affiliate of a member of the Lender Group), and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, from and after
the effective date specified in each Assignment and Assumption Agreement, the
Eligible Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.8(b), 2.9, 6.18, 12.3 and 12.5). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption Agreement delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the Revolving
Loan Commitments of, and principal amount of the Revolving Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person
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whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrowers and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Any Lender may, without the consent of, or notice to, the
Administrative Borrower or the Administrative Agent, sell participations to one
or more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Revolving Loan Commitment and/or the Revolving Loans owing to
it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrowers
and the Lender Group shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in Section 11.12(a)(i) that
affects such Participant. Subject to paragraph (e) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.8(b), 2.9, 6.18, 6.19(c) and 12.3 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.4 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.10(b) as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 2.8(b) or Section 12.3 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Administrative Borrower's prior written consent. A Participant shall
not be entitled to the benefits of Section 2.8(b) unless the Administrative
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.8(b) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation (i) any pledge or
assignment to secure obligations to a Federal Reserve Bank and (ii) in the case
of any Lender that is a Fund, any pledge or assignment of all or any portion of
such Lender's rights under this Agreement to any holders of obligations owed, or
securities issued, by such Lender as security for such obligations or
securities, or to any trustee for, or any other representative of, such holders,
and this Section shall not apply to any such pledge or assignment of a security
interest;
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provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
Section 11.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
In proving this Agreement or any other Loan Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission shall be deemed an
original signature hereto.
Section 11.7 Governing Law. This Agreement and the Loan Documents shall
be construed in accordance with and governed by the laws of the State of New
York, without regard to the conflict of laws principles thereof, except to the
extent otherwise provided in the Loan Documents.
Section 11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.10 Source of Funds. Notwithstanding the use by the Lenders
of the Base Rate and the Eurodollar Rate as reference rates for the
determination of interest on the Loans, the Lenders shall be under no obligation
to obtain funds from any particular source in order to charge interest to the
Borrowers at interest rates tied to such reference rates.
Section 11.11 Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. Each Borrower represents and warrants to the Lender Group that it has
read the provisions of this Section 11.11 and discussed the provisions of this
Section 11.11 and the rest of this Loan Agreement with counsel for such
Borrower, and such Borrower acknowledges and agrees that the Lender Group is
expressly relying upon such representations and warranties of such Borrower (as
well as the other representations and warranties of such Borrower set forth in
Section 5.1) in entering into this Agreement.
Section 11.12 Amendments and Waivers
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(a) Neither this Agreement, any other Loan Document nor any term
hereof or thereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Majority Lenders, or
in the case of Loan Documents executed by the Administrative Agent, signed by
the Administrative Agent and approved by, Majority Lenders and, in the case of
an amendment, also by the Borrowers, except that (i) the consent of each of the
Lenders shall be required for (A) any sale or release of, or the subordination
of the Administrative Agent's security interest in, any material Collateral
except in conjunction with sales or transfers of Collateral permitted hereunder,
or any release of any guarantor of the Obligations, (B) any extensions,
postponements or delays of the Maturity Date, the scheduled date of payment of
interest or principal or fees, or any reduction of principal (without a
corresponding payment with respect thereto), or any reduction in the rate of
interest or fees due to the Lenders hereunder or under any other Loan Document,
(C) any amendment of this Section 11.12 or of the definition of "Majority
Lenders," or any other provision of the Loan Documents specifying the number or
percentage of Lenders required to waive, amend or modify any rights thereunder
or make any determination or grant any consent thereunder; (D) any amendment
increasing the Revolving Loan Commitments (it being understood and agreed that a
waiver of any Default or a modification of any of the defined terms contained
herein (other than those defined terms specifically addressed in this Section
11.12) shall not constitute a change in the terms of the Revolving Loan
Commitment of any Lender); (E) any amendment to the definition of "Borrowing
Base" other than a reduction in the percentages set forth in such definition;
(F) any amendment to the definitions of "Availability" or "Bank Products;" or
(G) any amendment to Section 2.11 of this Agreement, (ii) the consent of the
Administrative Agent, the Majority Lenders and the Borrowers shall be required
for any amendment to Article 10; (iii) the consent of the Issuing Banks, the
Majority Lenders and the Borrowers shall be required for any amendment to
Section 2.15 and (iv) the consent of the Guarantors and the Majority Lenders
shall be required for any amendment to Article 3; provided, however, the
Administrative Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (i)(E) and (i)(F) above and any other terms of
this Agreement, make Agent Advances in accordance with Section 2.1(e) and,
provided further, that Schedule 1(b) hereto (Revolving Commitment Ratios) may be
amended from time to time by the Administrative Agent alone to reflect
assignments of Revolving Loan Commitments in accordance herewith.
(b) Each Lender grants to the Administrative Agent the right to
purchase all (but not less than all) of such Lender's Revolving Loan Commitment,
Letter of Credit Commitment, the Loans and Letter of Credit Obligations owing to
it and any Revolving Loan Notes held by it and all of its rights and obligations
hereunder and under the other Loan Documents at a price equal to the outstanding
principal amount of the Loans payable to such Lender plus any accrued but unpaid
interest on such Loans and accrued but unpaid commitment fees and letter of
credit fees owing to such Lender plus the amount necessary to cash collateralize
any Letters of Credit issued by such Lender, which right may be exercised by the
Administrative Agent if such Lender refuses to execute any
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amendment, waiver or consent which requires the written consent of all of the
Lenders and to which the Majority Lenders, the Administrative Agent and the
Borrowers have agreed so long as such right is exercised within ninety (90) days
of the date any approval for such amendment, waiver or consent was due. Each
Lender agrees that if the Administrative Agent exercises its option hereunder,
it shall promptly execute and deliver an Assignment and Assumption Agreement and
other agreements and documentation necessary to effectuate such assignment. The
Administrative Agent may assign its purchase rights hereunder to any assignee if
such assignment complies with the requirements of Section 11.5(b).
(c) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at
Administrative Agent's election, such fees may be paid only to those Lenders
that agree to such amendments, waivers or consents within the time specified for
submission thereof.
Section 11.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the
Administrative Agent, each Issuing Bank and each Lender to enter into or
maintain business relationships with the Borrowers, or any of their respective
Affiliates, beyond the relationships specifically contemplated by this Agreement
and the other Loan Documents.
Section 11.14 Pronouns. The pronouns used herein shall include, when
appropriate, either gender and both singular and plural, and the grammatical
construction of sentences shall conform thereto.
Section 11.15 Disclosure. The Borrower Parties agree that the
Administrative Agent shall have the right, with the consent of the
Administrative Borrower, to issue press releases regarding the making of the
Loans to the Borrowers pursuant to the terms of this Agreement.
Section 11.16 Replacement of Lender. In the event that a Replacement
Event (as defined below) occurs and is continuing with respect to any Lender,
the Borrowers may designate another financial institution (such financial
institution being herein called a "Replacement Lender") acceptable to the
Administrative Agent, and which is not a Borrower or an Affiliate of the
Borrowers, to assume such Lender's Revolving Loan Commitment hereunder, to
purchase the Loans and participations of such Lender and such Lender's rights
hereunder and (if such Lender is an Issuing Bank) to issue Letters of Credit in
substitution for all outstanding Letters of Credit issued by such Lender,
without recourse to or representation or warranty by, or expense to, such Lender
for a purchase price equal to the outstanding principal amount of the Loans
payable to such Lender plus any accrued but unpaid interest on such Loans and
accrued but unpaid commitment fees and letter of credit fees owing to such
Lender, and upon such assumption, purchase and substitution, and subject to the
execution and delivery to the Administrative Agent by the Replacement Lender of
documentation satisfactory to the Administrative Agent (pursuant to which such
Replacement Lender shall assume the obligations of such original Lender
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under this Agreement), the Replacement Lender shall succeed to the rights and
obligations of such Lender hereunder and such Lender shall no longer be a party
hereto or have any rights hereunder provided that the obligations of the
Borrowers to indemnify such Lender with respect to any event occurring or
obligations arising before such replacement shall survive such replacement.
"Replacement Event" means, with respect to any Lender, (a) the commencement of
or the taking of possession by, a receiver, custodian, conservator, trustee or
liquidator of such Lender, or the declaration by the appropriate regulatory
authority that such Lender is insolvent or (b) the making of any claim by any
Lender under Section 2.8(b), 12.3 or 12.5, unless the changing of the lending
office by such Lender would obviate the need of such Lender to make future
claims under such Sections.
Section 11.17 Confidentiality. No member of the Lender Group shall
disclose any Confidential Information to any other Person without the consent of
the Administrative Borrower, other than (i) to such member of the Lender Group's
Affiliates and their officers, directors, employees, agents and advisors, to
other members of the Lender Group and, as contemplated by Section 11.5, to
actual or prospective assignees and participants, and then only on a
confidential basis, (ii) as required by any law, rule or regulation or judicial
process, (iii) to any rating agency when required by it, provided, that, prior
to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Borrower Parties
received by it from such member of the Lender Group, (iv) as requested or
required by any state, federal or foreign authority or examiner regulating banks
or banking, and (v) in connection with the exercise of any remedy hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder. Notwithstanding
anything herein to the contrary, the members of the Lender Group (and their
respective employees, representatives, or other agents) may disclose to any and
all other Persons, without limitation of any kind, the tax treatment and tax
structure of this Agreement and the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to such Person relating to such tax treatment and tax structure. For
the avoidance of doubt, no disclosure to any Person is permitted with respect to
any aspect of this Agreement or the transactions contemplated hereby, to the
extent such aspect does not relate to tax treatment or tax structure or except
as otherwise permitted hereunder. The parties hereto hereby acknowledge and
agree that none of the interest rates, fee amounts or other amounts set forth in
such agreements relate to tax treatment or tax structure. The foregoing is
intended to comply with the presumption set forth in Treasury Regulation Section
1.6011-4(b)(3)(iii) and should be interpreted in a manner consistent with such
regulation.
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ARTICLE 12.
YIELD PROTECTION
Section 12.1 Eurodollar Rate Basis Determination. Notwithstanding
anything contained herein which may be construed to the contrary, if with
respect to any proposed Eurodollar Advance for any Eurodollar Advance Period,
the Administrative Agent determines that deposits in Dollars (in the applicable
amount) are not being offered by leading banks in the London interbank market
for such Eurodollar Advance Period, the Administrative Agent shall forthwith
give notice thereof to the Borrowers and the Lenders, whereupon until the
Administrative Agent notifies the Borrowers that the circumstances giving rise
to such situation no longer exist, the obligations of the Lenders to make
Eurodollar Advances shall be suspended.
Section 12.2 Illegality. If any change in Applicable Law, any change in
the interpretation or administration of any Applicable Law by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or any change in compliance with Applicable Law as a
result of compliance by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable
agency after the Agreement Date, shall make it unlawful or impossible for any
Lender to make, maintain, or fund its Eurodollar Advances, such Lender shall so
notify the Administrative Agent, and the Administrative Agent shall forthwith
give notice thereof to the other Lenders and the Administrative Borrower. Before
giving any notice to the Administrative Agent pursuant to this Section 12.2,
such Lender shall designate a different lending office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. Upon receipt of such
notice, notwithstanding anything contained in Article 2, the Borrowers shall
repay in full the then outstanding principal amount of each affected Eurodollar
Advance of such Lender, together with accrued interest thereon, either (a) on
the last day of the then current Eurodollar Advance Period applicable to such
Eurodollar Advance if such Lender may lawfully continue to maintain and fund
such Eurodollar Advance to such day or (b) immediately if such Lender may not
lawfully continue to fund and maintain such Eurodollar Advance to such day.
Concurrently with repaying each affected Eurodollar Advance of such Lender,
notwithstanding anything contained in Article 2, the Borrowers shall borrow a
Base Rate Advance from such Lender, and such Lender shall make such Advance in
an amount such that the outstanding principal amount of the Revolving Loans held
by such Lender shall equal the outstanding principal amount of such Revolving
Loans immediately prior to such repayment.
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Section 12.3 Increased Costs.
(a) If any change in Applicable Law, any change in the
interpretation or administration of any Applicable Law by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof or any change in compliance with Applicable Law as a
result of any request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency after the Agreement Date:
(i) Shall subject any Lender to any tax, duty,
or other charge with respect to its obligation to make Eurodollar
Advances, or its Eurodollar Advances, or shall change the basis of
taxation of payments to any Lender of the principal of or interest on
its Eurodollar Advances or in respect of any other amounts due under
this Agreement in respect of its Eurodollar Advances or its obligation
to make Eurodollar Advances (except for changes in the rate of tax on
the overall net income of such Lender; or
(ii) Shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any included in
an applicable Eurodollar Reserve Percentage), special deposit,
assessment, or other requirement or condition against assets of,
deposits (other than as described in Section 12.5) with or for the
account of, or commitments or credit extended by any Lender, or shall
impose on any Lender or the eurodollar interbank borrowing market any
other condition affecting its obligation to make such Eurodollar
Advances or its Eurodollar Advances; and the result of any of the
foregoing is to increase the cost to such Lender of making or
maintaining any such Eurodollar Advances, or to reduce the amount of
any sum received or receivable by the Lender under this Agreement or
under any Revolving Loan Notes with respect thereto, and such increase
is not given effect in the determination of the Eurodollar Rate then,
(iii) Shall subject any Issuing Bank or any Lender
to any tax, duty or other charge with respect to the obligation to
issue Letters of Credit, maintain Letters of Credit or participate in
Letters of Credit, or shall change the basis of taxation of payments to
any Issuing Bank or any Lender in respect of amounts drawn under
Letters of Credit or in respect of any other amounts due under this
Agreement in respect of Letters of Credit or the obligation of the
Issuing Banks to issue Letters of Credit, maintain Letters of Credit or
participate in Letters of Credit (except for changes in the rate of tax
on the overall net income of such Issuing Bank); or
(iv) Shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit, assessment,
or other requirement or condition against assets of, deposits (other
than as described in Section 12.5) with
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or for the account of, or commitments or credit extended by any Issuing
Bank, or shall impose on any Issuing Bank or Lender any other condition
affecting the obligation to issue Letters of Credit, maintain Letters
of Credit or participate in Letters of Credit; and the result of any of
the foregoing is to increase the cost to such Issuing Bank or Lender of
issuing, maintaining or participating in any such Letters of Credit or
to reduce the amount of any sum received or receivable by the Issuing
Bank or any Lender under this Agreement with respect thereto,
promptly upon demand by such Lender or Issuing Bank or the Maturity Date, the
Borrowers agree to pay, without duplication of amounts due under Section 2.8(b),
to such Lender or Issuing Bank such additional amount or amounts as will
compensate such Lender or Issuing Bank for such increased costs. Each Lender or
such Issuing Bank will promptly notify the Borrowers and the Administrative
Agent of any event of which it has knowledge, occurring after the Agreement
Date, which will entitle such Lender or Issuing Bank to compensation pursuant to
this Section 12.3 and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Lender or Issuing Bank, be otherwise
disadvantageous to such Lender or Issuing Bank.
(b) A certificate of any Lender or Issuing Bank claiming
compensation under this Section 12.3 and setting forth the additional amount or
amounts to be paid to it hereunder and calculations therefor shall be conclusive
in the absence of manifest error. In determining such amount, such Lender or
Issuing Bank may use any reasonable averaging and attribution methods. If any
Lender or Issuing Bank demands compensation under this Section 12.3, the
Borrowers may at any time, upon at least five (5) Business Days' prior notice to
such Lender, prepay in full the then outstanding affected Eurodollar Advances of
such Lender, together with accrued interest thereon to the date of prepayment,
along with any reimbursement required under Section 2.9. Concurrently with
prepaying such Eurodollar Advances the Borrowers shall borrow a Base Rate
Advance, or a Eurodollar Advance not so affected, from such Lender, and such
Lender shall make such Advance in an amount such that the outstanding principal
amount of the Revolving Loans held by such Lender shall equal the outstanding
principal amount of such Revolving Loans immediately prior to such prepayment.
Section 12.4 Effect On Other Advances. If notice has been given
pursuant to Section 12.1, 12.2 or 12.3 suspending the obligation of any Lender
to make any Eurodollar Advance, or requiring Eurodollar Advances of any Lender
to be repaid or prepaid, then, unless and until such Lender (or, in the case of
Section 12.1, the Administrative Agent) notifies the Administrative Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as the Eurodollar Advances
affected shall, at the option of the Borrowers, be made instead as Base Rate
Advances.
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Section 12.5 Capital Adequacy. If after the Agreement Date, any Lender
or Issuing Bank (or any affiliate of the foregoing) shall have reasonably
determined that the adoption of any applicable law, governmental rule,
regulation or order regarding the capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender or Issuing Bank (or any affiliate of the foregoing) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such governmental authority, central bank or comparable agency
(but only if such adoption, change, request or directive occurs after the
Agreement Date), has or would have the effect of reducing the rate of return on
such Lender's or Issuing Bank's (or any affiliate of the foregoing) capital as a
consequence of such Lender's or Issuing Bank's Commitment or obligations
hereunder to a level below that which it could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or
Issuing Bank's (or any affiliate of the foregoing) policies with respect to
capital adequacy immediately before such adoption, change or compliance and
assuming that such Lender's or Issuing Bank's (or any affiliate of the
foregoing) capital was fully utilized prior to such adoption, change or
compliance), then, promptly upon demand by such Lender or Issuing Bank, the
Borrowers shall immediately pay to such Lender or Issuing Bank such additional
amounts as shall be sufficient to compensate such Lender or Issuing Bank for any
such reduction actually suffered; provided, however, that there shall be no
duplication of amounts paid to a Lender pursuant to this sentence and Section
12.3 hereof. A certificate of such Lender or Issuing Bank setting forth the
amount to be paid to such Lender or Issuing Bank by the Borrowers as a result of
any event referred to in this paragraph shall, absent manifest error, be
conclusive.
ARTICLE 13.
JURISDICTION, VENUE AND WAIVER OF JURY TRIAL; ADMINISTRATIVE
BORROWER; JOINT AND SEVERAL OBLIGATIONS
Section 13.1 Jurisdiction and Service of Process. FOR PURPOSES OF ANY
LEGAL ACTION OR PROCEEDING BROUGHT BY ANY MEMBER OF THE LENDER GROUP WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCT
DOCUMENTS, EACH BORROWER PARTY HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL
JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK. THE CONSENT TO JURISDICTION HEREIN SHALL NOT BE EXCLUSIVE.
EACH BORROWER PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL TO SUCH BORROWER PARTY AT THE ADDRESS SET FORTH ABOVE, SUCH
SERVICE TO BECOME EFFECTIVE THREE (3) BUSINESS DAYS AFTER SUCH MAILING. IN THE
EVENT THAT,
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FOR ANY REASON, SERVICE OF LEGAL PROCESS CANNOT BE MADE IN THE MANNER DESCRIBED
ABOVE, SUCH SERVICE MAY BE MADE IN SUCH MANNER AS PERMITTED BY LAW.
Section 13.2 Consent to Venue. EACH BORROWER PARTY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF
ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT BROUGHT IN THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA SITTING IN NEW YORK, NEW YORK, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH SUIT, ACTION, OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Section 13.3 Waiver of Jury Trial. EACH BORROWER PARTY AND EACH MEMBER
OF THE LENDER GROUP TO THE EXTENT PERMITTED BY APPLICABLE LAW WAIVE, AND
OTHERWISE AGREE NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY BORROWER PARTY, ANY MEMBER
OF THE LENDER GROUP, OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A
PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
AGREEMENT, ANY REVOLVING LOAN NOTES OR THE OTHER LOAN DOCUMENTS AND THE
RELATIONS AMONG THE PARTIES LISTED IN THIS ARTICLE 13.
Section 13.4 The Administrative Borrower. Each Borrower hereby
irrevocably appoints Oxford Industries, Inc., as the borrowing agent and
attorney-in-fact for all Borrowers (the "Administrative Borrower"), which
appointment shall remain in full force and effect unless and until the
Administrative Agent shall have received prior written notice signed by each
Borrower that such appointment has been revoked and that another Borrower has
been appointed the Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide the
Administrative Agent with all notices with respect to Revolving Loans, Swing
Loans, Letters of Credit and Agent Advances obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and (ii) to
take such action as the Administrative Borrower deems appropriate on its behalf
to obtain Revolving Loans, Swing Loans, Letters of Credit and Agent Advances and
to exercise such other powers as are reasonably incidental thereto to carry out
the purposes of this Agreement.
Section 13.5 All Obligations to Constitute Joint and Several
Obligations.
(a) All Obligations shall constitute joint and several obligations
of the Borrowers and shall be secured by the Administrative Agent's Lien upon
all of the Collateral, and by all other Liens heretofore, now or at any time
hereafter granted by each Borrower to the Administrative Agent, for the benefit
of the Lender Group, to the extent
133
provided in the Loan Documents or Bank Product Documents under which such Lien
arises. Each Borrower expressly represents and acknowledges that it is part of a
common enterprise with the other Borrowers and that any financial accommodations
by the Administrative Agent, and the other members of the Lender Group to any
other Borrower hereunder and under the other Loan Documents and the Bank Product
Documents are and will be of direct and indirect interest, benefit and advantage
to all Borrowers. Each Borrower acknowledges that any Request for Advance,
Notice of Conversion/Continuation or other notice or request given by the
Administrative Borrower (including the Administrative Borrower) to the
Administrative Agent shall bind all Borrowers, and that any notice given by the
Administrative Agent or any other member of the Lender Group to any Borrower
shall be effective with respect to all Borrowers. Each Borrower acknowledges and
agrees that each Borrower shall be liable, on a joint and several basis, for all
of the Loans and other Obligations, regardless of which Borrower actually may
have received the proceeds of any of the Loans or other extensions of credit or
have had Letters of Credit issued hereunder or the amount of such Loans
received, Letters of Credit issued or the manner in which the Administrative
Agent or any other member of the Lender Group accounts among the Borrowers for
such Loans, Letters of Credit or other extensions of credit on its books and
records, and further acknowledges and agrees that Loans and other extensions of
credit to any Borrower inure to the mutual benefit of all of the Borrowers and
that the Administrative Agent and the other members of the Lender Group are
relying on the joint and several liability of the Borrowers in extending the
Loans and other financial accommodations hereunder. Each Borrower shall be
entitled to subrogation and contribution rights from and against the other
Borrowers to the extent any Borrower is required to pay to any member of the
Lender Group any amount in excess of the Loans advanced directly to, or other
Obligations incurred directly by, such Borrower or as otherwise available under
Applicable Law; provided, however, that such subrogation and contribution rights
are and shall be subject to the terms and conditions of this Section 13.5.
(b) It is the intent of the Borrowers, the Administrative Agent
and other members of the Lender Group and any other Person holding any of the
Obligations that each Borrower's maximum obligations hereunder (such Borrower's
"Maximum Borrower Liability") in any case or proceeding referred to below (but
only in such a case or proceeding) shall not be in excess of:
(i) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code on or within one (1)
year from the date on which any of the Obligations of such Borrower are
incurred, the maximum amount that would not otherwise cause the
Obligations of such Borrower hereunder (or any other Obligations of
such Borrower to the Administrative Agent and other members of the
Lender Group and any other Person holding any of the Obligations) to be
avoidable or unenforceable against such Borrower under (A) Section 548
of the Bankruptcy Code or (B) any state fraudulent transfer or
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fraudulent conveyance act or statute applied in such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code subsequent to one (1)
year from the date on which any of the Obligations of such Borrower are
incurred, the maximum amount that would not otherwise cause the
Obligations of such Borrower hereunder (or any other Obligations of
such Borrower to the Administrative Agent and other members of the
Lender Group and any other Person holding any of the Obligations) to be
avoidable or unenforceable against such Borrower under any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(iii) in a case or proceeding commenced by or
against such Borrower under any law, statute or regulation other than
the Bankruptcy Code relating to dissolution, liquidation,
conservatorship, bankruptcy, moratorium, readjustment of debt,
compromise, rearrangement, receivership, insolvency, reorganization or
similar debtor relief from time to time in effect affecting the rights
of creditors generally (collectively, "Other Debtor Relief Law"), the
maximum amount that would not otherwise cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the
Administrative Agent and other members of the Lender Group and any
other Person holding any of the Obligations) to be avoidable or
unenforceable against such Borrower under such Other Debtor Relief Law,
including, without limitation, any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or
proceeding. (The substantive state or federal laws under which the
possible avoidance or unenforceability of the Obligations of any
Borrower hereunder (or any other Obligations of such Borrower to the
Administrative Agent and any other member of the Lender Group and any
other Person holding any of the Obligations) shall be determined in any
such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
Notwithstanding the foregoing, no provision of this Section 13.5(b) shall limit
any Borrower's liability for Loans advanced directly or indirectly to it under
this Agreement.
(c) To the extent set forth in Section 13.5(b) hereof, but only to
the extent that the Obligations of any Borrower hereunder, or the transfers made
by such Borrower under any Loan Document or under any Bank Product Documents,
would otherwise be subject to avoidance under any Avoidance Provisions if such
Borrower is not deemed to have received valuable consideration, fair value, fair
consideration or reasonably equivalent value for such transfers or obligations,
or if such transfers or obligations of any Borrower hereunder would render such
Borrower insolvent, or leave such Borrower with an unreasonably small capital or
unreasonably small assets to conduct its business, or cause such Borrower to
have incurred debts (or to have intended to have incurred
135
debts) beyond its ability to pay such debts as they mature, in each case as of
the time any of the obligations of such Borrower are deemed to have been
incurred and transfers made under such Avoidance Provisions, then the
obligations of such Borrower hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the Obligations of such Borrower
hereunder (or any other Obligations of such Borrower to the Administrative Agent
and any other member of the Lender Group or any other Person holding any of the
Obligations), as so reduced, to be subject to avoidance under such Avoidance
Provisions. This Section 13.5(c) is intended solely to preserve the rights
hereunder of the Administrative Agent and other members of the Lender Group and
any other Person holding any of the Obligations to the maximum extent that would
not cause the obligations of the Borrowers hereunder to be subject to avoidance
under any Avoidance Provisions, and none of the Borrowers nor any other Person
shall have any right, defense, offset, or claim under this Section 13.5(c) as
against the Administrative Agent and other members of the Lender Group or any
other Person holding any of the Obligations that would not otherwise be
available to such Person under the Avoidance Provisions.
(d) Each Borrower agrees that the Obligations may at any time and
from time to time exceed the Maximum Borrower Liability of such Borrower, and
may exceed the aggregate Maximum Borrower Liability of all Borrowers hereunder,
without impairing this Agreement or any provision contained herein or affecting
the rights and remedies of the Lender Group hereunder.
(e) In the event any Borrower (a "Funding Borrower") shall make
any payment or payments under this Agreement or shall suffer any loss as a
result of any realization upon any collateral granted by it to secure its
obligations hereunder, each other Borrower (each, a "Contributing Borrower")
shall contribute to such Funding Borrower an amount equal to such payment or
payments made, or losses suffered, by such Funding Borrower determined as of the
date on which such payment or loss was made multiplied by the ratio of (i) the
Maximum Borrower Liability of such Contributing Borrower (without giving effect
to any right to receive any contribution or other obligation to make any
contribution hereunder), to (ii) the aggregate Maximum Borrower Liability of all
Borrowers (including the Funding Borrowers) hereunder (without giving effect to
any right to receive, or obligation to make, any contribution hereunder).
Nothing in this Section 13.5(e) shall affect any Borrower's joint and several
liability to the Lender Group for the entire amount of its Obligations. Each
Borrower covenants and agrees that its right to receive any contribution
hereunder from a Contributing Borrower shall be subordinate and junior in right
of payment to all obligations of the Borrowers to the Lender Group hereunder.
(f) No Borrower will exercise any rights that it may acquire by
way of subrogation hereunder or under any other Loan Document or any Bank
Product Document or at law by any payment made hereunder or otherwise, nor shall
any Borrower seek or be entitled to seek any contribution or reimbursement from
any other
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Borrower in respect of payments made by such Borrower hereunder or under any
other Loan Document or under any Bank Product Document, until all amounts owing
to the Lender Group on account of the Obligations are paid in full in cash (or,
with respect to Letters of Credit, are either cash collateralized or supported
by a letter of credit acceptable to the Administrative Agent in an amount equal
to 105% of the face amount of the outstanding Letters of Credit) and the
Revolving Loan Commitments are terminated. If any amounts shall be paid to any
Borrower on account of such subrogation or contribution rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Borrower in trust for the Lender Group segregated from other funds
of such Borrower, and shall, forthwith upon receipt by such Borrower, be turned
over to the Administrative Agent in the exact form received by such Borrower
(duly endorsed by such Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, as provided for
herein.
Section 13.6 Revival and Reinstatement of Obligations. If the
incurrence or payment of the Obligations by any Borrower or any Guarantor or the
transfer to the Lender Group of any property should for any reason subsequently
be declared to be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a "Voidable Transfer"), and if
the Lender Group is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
then, as to any such Voidable Transfer, or the amount thereof that the Lender
Group is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or such Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers in Atlanta, Georgia, all
as of the day and year first above written.
BORROWERS: OXFORD INDUSTRIES, INC., as a Borrower,
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
OXFORD SOUTH CAROLINA, INC., as a Borrower
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
GUARANTORS: LIONSHEAD CLOTHING COMPANY, a Delaware
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
CREDIT AGREEMENT
MERONA INDUSTRIES, INC., a Delaware
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
OXFORD CARIBBEAN, INC., a Delaware
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
OXFORD CLOTHING CORPORATION, a Georgia
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
CREDIT AGREEMENT
OXFORD GARMENT, INC. a Delaware corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
OXFORD INTERNATIONAL, INC., a Georgia
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
OXFORD PRIVATE LIMITED OF DELAWARE, INC., a
Delaware corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
CREDIT AGREEMENT
PIEDMONT APPAREL CORPORATION, a Delaware
corporation
By:____________________________________
Name:_________________________
Title:________________________
Attest:________________________________
Name:_________________________
Title:________________________
CREDIT AGREEMENT
LENDER GROUP: SUNTRUST BANK, as the Administrative Agent,
an Issuing Bank and a Lender
By:____________________________________
Name:_________________________
Title:________________________
CREDIT AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services Inc., as
Syndication Agent and as a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇ Van Duinen
Assistant Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇ ▇▇▇▇▇
Portfolio Analyst
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇.▇▇▇
CREDIT AGREEMENT
BANK OF AMERICA, N.A., as a Lender and an
Issuing Bank
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Control Analyst
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT AGREEMENT
FLEET CAPITAL CORPORATION, as a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇_▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Loan Administrative Assistant
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇_▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
GENERAL ELECTRIC CAPITAL as a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Associate
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇ ▇▇▇▇▇
Portfolio Analyst
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
HSBC BUSINESS CREDIT (USA) INC., as a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇ ▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇.▇.▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
CREDIT AGREEMENT
▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP., as a
Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Manager
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
ORIX FINANCIAL SERVICES, INC., as a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇ ▇▇▇▇▇▇
Collateral Analyst
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
SHANGHAI COMMERCIAL BANK LTD., as a Lender
and an Issuing Bank
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇
Vice President and Manager
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Ext. 228
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
C. N. Wu
Assistant Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Ext. 209
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
SIEMENS FINANCIAL SERVICES, INC., as a
Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Director and Relationship Manager
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Operations and Collateral Manager
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
THE CIT GROUP/COMMERCIAL SERVICES, INC., as
a Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
Will ▇▇▇▇▇▇▇▇▇▇
Vice President
Two Wachovia Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Two Wachovia Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
CREDIT AGREEMENT
WACHOVIA BANK, NATIONAL ASSOCIATION, as a
Lender
By:____________________________________
Name:_________________________
Title:________________________
Credit Notice Address:
▇▇▇▇▇▇ ▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative/Operations Notice Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Associate
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
CREDIT AGREEMENT
HSBC BANK U.S.A., as an Issuing Bank
By:____________________________________
Name:_________________________
Title:________________________
Notice Address:
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: _____________
Email: ▇▇▇▇.▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
CREDIT AGREEMENT
JOINDER AGREEMENT
Reference is made to that certain Credit Agreement dated as of
June 13, 2003 by and among Oxford Industries, Inc., a Georgia corporation, and
Oxford of South Carolina, Inc., a South Carolina corporation, as Borrowers, the
Guarantors, the financial institutions party thereto from time to time as
Lenders, the financial institutions party thereto from time to time as Issuing
Banks, SunTrust Bank, as administrative agent for the Lender Group (the
"Administrative Agent") and the Syndication Agent (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Capitalized terms used herein without definition shall have the meanings given
to such terms in the Credit Agreement.
Pursuant to Section 4.4 of the Credit Agreement, Viewpoint
International, Inc., a Delaware corporation (the "Target") is required to join
the Credit Agreement as a direct obligor of the Obligations and become a
Borrower and Borrower Party by executing and delivering to the Administrative
Agent certain Loan Documents and Security Documents, including without
limitation, this Joinder Agreement. Upon the execution and delivery of this
Joinder Agreement by the Target, the Target shall become a direct obligor of the
Obligations and become a Borrower and a Borrower Party under the Credit
Agreement with the same force and effect as if originally named as a Borrower
therein.
The Target hereby agrees as follows:
1. In accordance with Section 4.4 of the Credit
'Borrower Party' under the Credit Agreement with the same force and effect as if
originally named therein as a 'Borrower' and as a `Borrower Party' and the
Target hereby agrees to all of the terms and provisions of the Credit Agreement
applicable to it as a 'Borrower' and as a 'Borrower Party'. Each reference to a
'Borrower' and 'Borrower Party' in the Credit Agreement shall be deemed to
include the Target. The Credit Agreement is incorporated herein by reference.
2. The Target represents and warrants to the
Administrative Agent and the other members of the Lender Group that this Joinder
Agreement has been duly executed and delivered by the Target and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, or similar laws affecting
the enforcement of creditors' rights generally or by general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law).
3. Delivery of a counterpart hereof by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
4. Except as expressly supplemented hereby, the Credit
Agreement shall remain in full force and effect.
5. THIS JOINDER AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
6. This Joinder Agreement shall be considered a Loan
Document for all purposes.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
JOINDER AGREEMENT
VIEWPOINT INTERNATIONAL, INC.,
a Delaware corporation
By:_____________________________
Name:___________________________
Title:__________________________
JOINDER AGREEMENT
GUARANTY SUPPLEMENT
Reference is made to that certain Credit Agreement dated as of June 13,
2003 by and among Oxford Industries, Inc., a Georgia corporation, Oxford of
South Carolina, Inc., a South Carolina corporation, and, immediately following
the consummation of the Acquisition, Viewpoint International, Inc., a Delaware
corporation (the "Borrowers"; and each a "Borrower"), the Subsidiaries of the
Borrowers party thereto as Guarantors, the financial institutions party thereto
from time to time as Lenders, the financial institutions party thereto from time
to time as Issuing Banks, SunTrust Bank, as administrative agent for the Lender
Group (the "Administrative Agent") and the Syndication Agent (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Capitalized terms used herein without definition shall have the
meanings given to such terms in the Credit Agreement.
Pursuant to Section 4.4 of the Credit Agreement, each Domestic
Subsidiary of the Target is required to join the Credit Agreement as a Guarantor
of the Obligations and become a Borrower Party by executing and delivering to
the Administrative Agent certain Loan Documents and Security Documents,
including without limitation, this Guaranty Supplement. Upon the execution and
delivery of this Guaranty Supplement by each Domestic Subsidiary, such Domestic
Subsidiary shall become a Guarantor of the Obligations and become a Borrower
Party under the Credit Agreement with the same force and effect as if originally
named as a Guarantor therein.
Each undersigned New Guarantor hereby agrees as follows:
7. In accordance with Section 4.4 of the Credit
Agreement, such New Guarantor, by its signature below, becomes a `Guarantor' and
a `Borrower Party' under the Credit Agreement with the same force and effect as
if originally named therein as a `Guarantor' and as a `Borrower Party' and such
New Guarantor hereby agrees to all of the terms and provisions of the Credit
Agreement applicable to it as a `Guarantor' and as a `Borrower Party'. In
furtherance of the foregoing, each New Guarantor, as security for the payment
and performance in full of the Obligations, does hereby guarantee, subject to
the limitations set forth in Section 3.1(g) of the Credit Agreement, to the
Administrative Agent, for the benefit of the Lender Group, the full and prompt
payment of the Obligations, including, without limitation, any interest therein
(including, without limitation, interest, as provided in the Credit Agreement,
accruing after the filing of a petition initiating any Insolvency Proceedings,
whether or not such interest accrues or is recoverable against the Borrowers
after the filing of such petition for purposes of the Bankruptcy Code or is an
allowed claim in such proceeding), plus reasonable attorneys' fees and expenses
if the Obligations represented by the Credit Agreement are collected by law,
through an attorney-at-law, or under advice therefrom. Each reference to a
`Guarantor' and `Borrower Party' in the Credit Agreement shall be deemed to
include each New Guarantor. The Credit Agreement is incorporated herein by
reference.
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8. Each New Guarantor represents and warrants to the
Administrative Agent and the other members of the Lender Group that this
Supplement has been duly executed and delivered by such New Guarantor and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, or similar
laws affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
9. This Supplement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Delivery of a counterpart hereof by facsimile transmission shall be as effective
as delivery of a manually executed counterpart hereof.
10. Except as expressly supplemented hereby, the Credit
Agreement shall remain in full force and effect.
11. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
12. This Supplement shall be considered a Loan Document
for all purposes.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
GUARANTY SUPPLEMENT
IN WITNESS WHEREOF, each New Guarantor has duly executed this
Supplement as of the day and year first above written.
NEW GUARANTORS: ▇▇▇▇▇ BAHAMA R&R HOLDINGS, INC.,
a Delaware corporation
By:_____________________________
Name:___________________________
Title:__________________________
▇▇▇▇▇ BAHAMA ALA MOANA LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA BILTMORE, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA BIRMINGHAM, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA BOCA RATON, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA CAFE EMPORIUM, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA CHERRY CREEK, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA CHICAGO, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA CORAL GABLES, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA DESTIN, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA FARMERS MARKET, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA KANSAS CITY, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA LA JOLLA, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA LAS OLAS LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA LAS VEGAS, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA LAS VEGAS FASHION SHOW,
LLC, a Delaware limited liability
company,
▇▇▇▇▇ BAHAMA MANHATTAN VILLAGE, LLC, a
Delaware limited liability company,
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▇▇▇▇▇ BAHAMA MAUNA ▇▇▇▇, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA MYRTLE BEACH, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA NEWPORT BEACH LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA NORTH SCOTTSDALE, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA ORLANDO, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA PALM DESERT, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA PALO ALTO, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA PASADENA, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA ▇▇▇▇▇, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA SAN DIEGO FASHION VALLEY,
LLC, a Delaware limited liability
company,
▇▇▇▇▇ BAHAMA SAN ▇▇▇▇, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA SARASOTA, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA ST. AUGUSTINE, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA TAMPA, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA TUCSON, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA WAILEA, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA WALNUT CREEK, LLC, a
Delaware limited liability company,
▇▇▇▇▇ BAHAMA WEST PALM, LLC, a Delaware
limited liability company,
▇▇▇▇▇ BAHAMA WHALERS VILLAGE, LLC, a
Delaware limited liability company,
GUARANTY SUPPLEMENT
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▇▇▇▇▇ BAHAMA WOODBURY COMMON, LLC, a
Delaware limited liability company,
By: ▇▇▇▇▇ Bahama R&R Holdings, Inc., as
sole member of each of the
above-named limited liability
companies
By:_____________________________
Name:___________________________
Title:__________________________
▇▇▇▇▇ BAHAMA R&R TEXAS, INC., a Texas
corporation
By:_________________________________
Name:_______________________________
Title:______________________________
▇▇▇▇▇ BAHAMA AUSTIN, L.P., a Texas
limited partnership,
▇▇▇▇▇ BAHAMA DALLAS, L.P., a Texas
limited partnership,
By: ▇▇▇▇▇ BAHAMA R&R TEXAS, INC., as
general partner of each of the
above-named limited partnerships
By:_____________________________
Name:___________________________
Title:__________________________
GUARANTY SUPPLEMENT
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Schedule 1(b)
Revolving Commitment Ratios
I. LOANS
Revolving Loan
Commitment Principal Revolving Commitment
Lender Amount Ratio
------ ------ -----
SunTrust Bank $ 30,000,000 10.909091%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital (a
division of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Business Financial Services
Inc.) $ 30,000,000 10.909091%
The CIT Group/Commercial
Services, Inc. $ 26,000,000 9.454545%
JPMorgan Chase Bank $ 26,000,000 9.454545%
General Electric Capital
Corporation $ 26,000,000 9.454545%
Fleet Capital Corporation $ 26,000,000 9.454545%
Bank of America, N.A. $ 26,000,000 9.454545%
Shanghai Commercial Bank Ltd. $ 26,000,000 9.454545%
Wachovia Bank, National
Association $ 26,000,000 9.454545%
Orix Financial Services, Inc. $ 11,000,000 4.0000000%
HSBC Business Credit (USA) Inc. $ 11,000,000 4.0000000%
Siemens Financial Services, Inc. $ 11,000,000 4.0000000%
Totals $ 275,000,000 100%
II. LETTERS OF CREDIT
Issuing Banks Letter of Credit Commitment
------------- ----------------------------
SunTrust Bank $175,000,000
Bank of America, N.A. $175,000,000
Shanghai Commercial Bank Ltd. $175,000,000
HSBC Bank U.S.A. $175,000,000