1
10.1
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LOAN AND SECURITY AGREEMENT
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FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT FOR
THE LENDERS REFERENCED HEREIN
FLEET NATIONAL BANK
AS ISSUER
CHASE BUSINESS CREDIT CORP.
THE CHASE MANHATTAN BANK
AS CO-AGENTS
GMAC BUSINESS CREDIT, LLC
GMAC COMMERCIAL CREDIT, LLC
AS DOCUMENTATION AGENTS
THE CIT GROUP/BUSINESS CREDIT INC.
AS SYNDICATION AGENT
FLEET SECURITIES, INC.
AS ARRANGER
OFFICEMAX, INC.
THE LEAD BORROWER
FOR:
OFFICEMAX, INC.
BIZMART, INC.
BIZMART (TEXAS), INC.
OFFICEMAX CORP.
THE BORROWERS
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November 30, 2000
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TABLE OF CONTENTS
Article 1 - DEFINITIONS:..........................................................................................2
Article 2 - THE REVOLVING CREDIT:................................................................................25
21 -ESTABLISHMENT OF REVOLVING CREDIT..................................................................25
22 -ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS)....................................................26
23 -RISKS OF VALUE OF COLLATERAL........................................................................27
24 -COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS OF CREDIT.............................27
25 -REVOLVING CREDIT LOAN REQUESTS......................................................................27
26 -MAKING OF REVOLVING CREDIT LOANS....................................................................29
27 -SWINGLINE LOANS.....................................................................................29
28 -THE LOAN ACCOUNT....................................................................................30
29 -THE REVOLVING CREDIT NOTES..........................................................................31
210 -PAYMENT OF THE LOAN ACCOUNT........................................................................31
211 -INTEREST ON REVOLVING CREDIT LOANS.................................................................33
212 -VOLUNTARY REDUCTION OF COMMITMENT AND REVOLVING CREDIT CEILING.....................................33
213 -REVOLVING CREDIT COMMITMENT FEE....................................................................34
214 -ADMINISTRATIVE AGENT'S FEE.........................................................................34
215 -UNUSED FEE.........................................................................................34
216 -EARLY TERMINATION FEE..............................................................................34
217 -PROCEDURES FOR ISSUANCE OF L/CS....................................................................35
218 -FEES FOR L/CS......................................................................................36
219 -CONCERNING L/CS....................................................................................37
220 -CHANGED CIRCUMSTANCES..............................................................................39
221 -DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT..................................................39
222 -LENDERS' COMMITMENTS...............................................................................41
223 - REPLACEMENT OF REVOLVING CREDIT LENDER.........................................................42
Article 3 - CONDITIONS PRECEDENT:................................................................................43
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31 -CORPORATE DUE DILIGENCE.............................................................................43
32 -OPINION.............................................................................................43
33 -TRI-PARTY AGREEMENT.................................................................................44
34 -ADDITIONAL DOCUMENTS................................................................................44
35 -OFFICERS' CERTIFICATES..............................................................................44
36 -DUE DILIGENCE.......................................................................................44
37 -REPRESENTATIONS AND WARRANTIES......................................................................44
38 -ALL FEES AND EXPENSES PAID..........................................................................44
39 -NO DEFAULT..........................................................................................44
310 -NO ADVERSE CHANGE..................................................................................44
311 - PERFECTION OF ENCUMBRANCES.....................................................................45
312 - SATISFACTION OF EXISTING INDEBTEDNESS..........................................................45
313 -CONSENTS AND APPROVALS.............................................................................45
314 -NO DEFAULTS UNDER APPLICABLE LAW OR MATERIAL AGREEMENTS............................................45
315 -NO LITIGATION......................................................................................45
316 -NO NEGATIVE IMPACT ON SYNDICATION..................................................................45
317 - NO CHANGE IN GOVERNMENTAL REGULATIONS..........................................................45
318 -BENEFIT OF CONDITIONS PRECEDENT....................................................................45
Article 4 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:...................................................46
41 -PAYMENT AND PERFORMANCE OF LIABILITIES..............................................................46
42 -DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.......................................................46
43 -TRADE NAMES.........................................................................................47
44 -INTELLECTUAL PROPERTY...............................................................................47
45 -LOCATIONS...........................................................................................48
46 -TITLE TO ASSETS.....................................................................................49
47 -INDEBTEDNESS........................................................................................50
48 -INSURANCE...........................................................................................51
49 -LICENSES............................................................................................52
410 -LEASES.............................................................................................52
411 -REQUIREMENTS OF LAW................................................................................52
412 -LABOR RELATIONS....................................................................................53
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413 -MAINTAIN PROPERTIES................................................................................54
414 -TAXES..............................................................................................54
415 -NO MARGIN STOCK....................................................................................55
416 -ERISA..............................................................................................55
417 -HAZARDOUS MATERIALS................................................................................56
418 -LITIGATION.........................................................................................56
419 -DIVIDENDS. INVESTMENTS. CORPORATE ACTION...........................................................57
420 -LOANS..............................................................................................58
421 -PROTECTION OF ASSETS...............................................................................58
422 -LINE OF BUSINESS...................................................................................59
423 -AFFILIATE TRANSACTIONS.............................................................................59
424 -FURTHER ASSURANCES.................................................................................59
425 -ADEQUACY OF DISCLOSURE.............................................................................59
▇▇▇ -▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ LIABILITIES.....................................................................60
427 -OTHER COVENANTS....................................................................................60
Article 5 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:.........................................................60
51 -MAINTAIN RECORDS....................................................................................60
52 -ACCESS TO RECORDS...................................................................................61
53 -IMMEDIATE NOTICE TO ADMINISTRATIVE AGENT............................................................62
54 -BORROWING BASE CERTIFICATE..........................................................................63
55 -MONTHLY REPORTS.....................................................................................63
56 -QUARTERLY REPORTS...................................................................................64
57 -ANNUAL REPORTS......................................................................................64
58 -OFFICERS' CERTIFICATES..............................................................................65
59 -INVENTORIES, APPRAISALS, AND AUDITS.................................................................65
510 -ADDITIONAL FINANCIAL INFORMATION...................................................................66
511 -FINANCIAL PERFORMANCE COVENANTS....................................................................67
Article 6 - USE OF COLLATERAL:...................................................................................67
61 -USE OF INVENTORY COLLATERAL.........................................................................67
62 -INVENTORY QUALITY...................................................................................68
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63 -ADJUSTMENTS AND ALLOWANCES..........................................................................68
64 -VALIDITY OF ACCOUNTS................................................................................68
65 -NOTIFICATION TO ACCOUNT DEBTORS.....................................................................69
Article 7 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:.............................................................69
71 -DEPOSITORY ACCOUNTS.................................................................................69
72 -CREDIT CARD RECEIPTS................................................................................69
73 -THE CONCENTRATION, BLOCKED, AND OPERATING ACCOUNTS..................................................70
74 -PROCEEDS AND COLLECTIONS............................................................................70
75 -PAYMENT OF LIABILITIES..............................................................................71
Article 8 - GRANT OF SECURITY INTEREST:..........................................................................72
81 -GRANT OF SECURITY INTEREST..........................................................................72
82 -EXTENT AND DURATION OF SECURITY INTEREST............................................................73
Article 9 - ADMINISTRATIVE AGENT AS BORROWER'S ATTORNEY-IN-FACT:.................................................73
91 -APPOINTMENT AS ATTORNEY-IN-FACT.....................................................................74
92 -NO OBLIGATION TO ACT................................................................................74
Article 10 - EVENTS OF DEFAULT:..................................................................................75
101 -FAILURE TO PAY THE REVOLVING CREDIT................................................................75
102 -FAILURE TO MAKE OTHER PAYMENTS.....................................................................75
103 -FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD).........................................75
104 -FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD)............................................75
105 -MISREPRESENTATION..................................................................................76
106 -ACCELERATION OF OTHER DEBT. BREACH OF LEASE........................................................76
107 -UNINSURED CASUALTY LOSS............................................................................76
108 -ATTACHMENT. JUDGMENT. RESTRAINT OF BUSINESS........................................................76
109 -BUSINESS FAILURE...................................................................................77
1010 -BANKRUPTCY........................................................................................77
1011 -INDICTMENT - FORFEITURE...........................................................................77
1012 -CHALLENGE TO LOAN DOCUMENTS.......................................................................78
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1013 -CHANGE IN CONTROL.................................................................................78
1014 - DEFAULT UNDER ASSOCIATES AGREEMENT..............................................................78
Article 11 - RIGHTS AND REMEDIES UPON DEFAULT:...................................................................78
111 -Acceleration.......................................................................................78
112 -RIGHTS OF ENFORCEMENT..............................................................................78
113 -SALE OF COLLATERAL.................................................................................79
114 -OCCUPATION OF BUSINESS LOCATION....................................................................80
115 -GRANT OF NONEXCLUSIVE LICENSE......................................................................80
116 -ASSEMBLY OF COLLATERAL.............................................................................80
117 -RIGHTS AND REMEDIES................................................................................81
Article 12 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:........................................................81
121 -REVOLVING CREDIT FUNDING PROCEDURES................................................................81
122 -SWINGLINE LOANS....................................................................................81
123 -ADMINISTRATIVE AGENT'S COVERING OF FUNDINGS:.......................................................82
124 -ORDINARY COURSE DISTRIBUTIONS......................................................................84
Article 13 - ACCELERATION AND LIQUIDATION:.......................................................................85
131 -ACCELERATION NOTICES...............................................................................85
132 -ACCELERATION.......................................................................................86
133 -INITIATION OF LIQUIDATION..........................................................................86
134 -ACTIONS AT AND FOLLOWING INITIATION OF LIQUIDATION................................................86
135 -ADMINISTRATIVE AGENT'S CONDUCT OF LIQUIDATION......................................................86
136 -DISTRIBUTION OF LIQUIDATION PROCEEDS:..............................................................87
137 -RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION.....................................................87
Article 14 - THE ADMINISTRATIVE AGENT:...........................................................................88
141 -APPOINTMENT OF THE ADMINISTRATIVE AGENT............................................................88
142 -RESPONSIBILITIES OF ADMINISTRATIVE AGENT...........................................................89
143 -CONCERNING DISTRIBUTIONS BY THE ADMINISTRATIVE AGENT...............................................90
144 -DISPUTE RESOLUTION:................................................................................90
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145 -DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS..........................................................91
146 -CONFIDENTIAL INFORMATION...........................................................................91
147 -RELIANCE BY ADMINISTRATIVE AGENT...................................................................91
148 -NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER REVOLVING CREDIT LENDERS............................92
149 -INDEMNIFICATION....................................................................................92
1410 -RESIGNATION OF ADMINISTRATIVE AGENT...............................................................93
Article 15 - ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS:...................................93
151 -ADMINISTRATION OF CREDIT FACILITIES................................................................94
152 - ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS..........................................94
153 - ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY LENDERS.....................................94
154 -ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT.................................................94
155 -ACTIONS REQUIRING SWINGLINE LENDER CONSENT.........................................................96
156 - ACTIONS REQUIRING ISSUER CONSENT................................................................96
157 -ACTIONS REQUIRING ADMINISTRATIVE AGENT'S CONSENT...................................................96
158 -MISCELLANEOUS ACTIONS..............................................................................96
159 -ACTIONS REQUIRING LEAD BORROWER'S CONSENT..........................................................97
1510 -NONCONSENTING REVOLVING CREDIT LENDER.............................................................98
Article 16 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS:............................................................99
161 -ASSIGNMENTS AND ASSUMPTIONS:.......................................................................99
162 -ASSIGNMENT PROCEDURES.............................................................................100
163 -EFFECT OF ASSIGNMENT..............................................................................100
Article 17 - NOTICES:...........................................................................................101
171 -NOTICE ADDRESSES..................................................................................101
172 -NOTICE GIVEN......................................................................................102
Article 18 - TERM:..............................................................................................103
181 -TERMINATION OF REVOLVING CREDIT...................................................................103
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182 -ACTIONS ON TERMINATION............................................................................103
Article 19 - GENERAL:...........................................................................................104
191 -PROTECTION OF COLLATERAL..........................................................................104
192 -PUBLICITY.........................................................................................104
193 -SUCCESSORS AND ASSIGNS............................................................................104
194 -SEVERABILITY......................................................................................104
195 -AMENDMENTS. COURSE OF DEALING....................................................................104
196 -POWER OF ATTORNEY.................................................................................105
197 -APPLICATION OF PROCEEDS...........................................................................105
198 -INCREASED COSTS...................................................................................105
199 -COSTS AND EXPENSES OF THE ADMINISTRATIVE AGENT....................................................106
1910 -COPIES AND FACSIMILES............................................................................106
1911 -MASSACHUSETTS LAW................................................................................107
1912 -CONSENT TO JURISDICTION..........................................................................107
1913 -INDEMNIFICATION..................................................................................107
1914 -RULES OF CONSTRUCTION............................................................................108
1915 -INTENT...........................................................................................109
1916 -PARTICIPATIONS:..................................................................................110
1917 -RIGHT OF SET-OFF.................................................................................110
1918 -PLEDGES TO FEDERAL RESERVE BANKS:................................................................110
1919 -MAXIMUM INTEREST RATE............................................................................110
1920 -WAIVERS..........................................................................................111
1921 - ADDITIONAL WAIVERS............................................................................112
1922 -CONFIDENTIALITY..................................................................................113
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EXHIBITS
1-1 : Realty Sales
3-1 : Good Standing Certificates
2-7(c) : SwingLine Note
2-9 : Revolving Credit Note
2-18 : Synthetic Leases
2-22 : Revolving Credit Lenders' Commitments
3-4 : Additional Documents
4-2 : Corporate Information
4-3 : Trade Names
4-5 : Locations, Leases, and Landlords
4-6 : Encumbrances
4-7 : Indebtedness
4-8 : Insurance Policies
4-10 : Capital Leases
4-12 : Collective Bargaining Agreements
4-14 : Taxes
4-18 : Litigation
4-19 : Existing Investments
4-23 : Affiliate Transactions
5-4 : Borrowing Base Certificate
5-5 : Financial Reporting Requirements
7-1 : DDA's.
7-2 : Credit Card Arrangements
7-3 : Blocked Account Banks
16-2 : Assignment / Assumption
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LOAN AND SECURITY AGREEMENT
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November 30, 2000
THIS AGREEMENT is made between
Fleet Retail Finance Inc. (in such capacity, herein the
"ADMINISTRATIVE AGENT"), a Delaware corporation with offices at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the ratable
benefit of the "REVOLVING CREDIT LENDERS", who are, at present, those
financial institutions identified on the signature pages of this
Agreement and who in the future are those Persons (if any) who become
"Revolving Credit Lenders" in accordance with the provisions of Section
2-22, below;
and
The Revolving Credit Lenders;
Fleet National Bank ("FLEET"), a bank organized under the laws
of the United States of America, having an office at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
Chase Business Credit Corp., a corporation organized under the
laws of New York, and The Chase Manhattan Bank, a New York banking
corporation, each having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, as Co-Agents (the "CO-AGENTS");
and
GMAC Business Credit, LLC, a duly organized limited liability
company having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and GMAC Commercial Credit, LLC, a duly organized limited liability
company having an office at 1290 Avenue of the Americas, New York, New
York 10104 (the "DOCUMENTATION AGENTS") ;
and
The CIT Group/Business Credit, Inc., a duly organized
corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "SYNDICATION AGENT")
and
OfficeMax, Inc. ( in such capacity, the " LEAD BORROWER"), an
Ohio corporation with its principal executive offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as agent for the
following (individually, a "BORROWER" and collectively, the
"BORROWERS"):
Said OfficeMax, Inc., BizMart, Inc., a Delaware corporation
with its principal executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, BizMart (Texas),
Inc., a Delaware corporation with its principal executive
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offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ and OfficeMax Corp., an Ohio corporation with its
principal executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,
WITNESSETH:
ARTICLE 1 - DEFINITIONS:
As used herein, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:
"ACCOUNT DEBTOR": Has the meaning given that term in the UCC.
"ACCOUNTS" and "ACCOUNTS RECEIVABLE" include, without limitation,
"accounts" as defined in the UCC, and also all: accounts,
accounts receivable, receivables, and rights to payment
(whether or not earned by performance): for property that has
been or is to be sold, leased, licensed, assigned, or
otherwise disposed of; for services rendered or to be
rendered; arising out of the use of a credit or charge card or
information contained on or used with that card; and also all
reclaimed, returned, rejected or repossessed Inventory (if
any) the sale of which gave rise to any Account.
"ACH": Automated clearing house.
"ACQUISITION": The purchase or acquisition of all or substantially all
of the assets of any Person, the purchase of a controlling
equity interest in any Person, or the merger or consolidation
of any Person with any other Person, in any transaction or
group of transactions which are part of a common plan, in each
case excluding any transaction involving a Related Entity.
"ADMINISTRATIVE AGENT": Is referred to in the Preamble.
"ADMINISTRATIVE AGENT'S COVER": Defined in Section 12-3(c)(i).
"ADMINISTRATIVE AGENT'S FEE": Is defined in Section 2-14.
"ADMINISTRATIVE AGENT'S RIGHTS AND REMEDIES": Is defined in Section
11-7.
"AFFILIATE": The following:
(a) With respect to any two Persons, a relationship
in which (i) one holds, directly or indirectly, not less than
twenty five percent (25%) of the capital stock, beneficial
interests, partnership interests, or other equity interests of
the other; or (ii) one has, directly or indirectly, the right,
under ordinary circumstances, to vote for the election of a
majority of the directors (or other body or Person who has
those powers customarily vested in a board of directors of a
corporation); or (iii) not less than twenty five percent (25%)
of their respective ownership is directly or indirectly held
by the same third Person.
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(b) Any Person which: is a parent, brother-sister,
Subsidiary, or affiliate, of a Borrower; could have such
enterprise's tax returns or financial statements consolidated
with that Borrower's; could be a member of the same controlled
group of corporations (within the meaning of Section
1563(a)(1), (2) and (3) of the Internal Revenue Code of 1986,
as amended from time to time) of which any Borrower is a
member; controls or is controlled by any Borrower.
"APPLICABLE LAW": As to any Person:(i) All statutes, rules,
regulations, orders, or other requirements having the force of
law and (ii) all court orders and injunctions, arbitrator's
decisions, and/or similar rulings, in each instance ((i) and
(ii)) of or by any federal, state, municipal, and other
governmental authority, or court, tribunal, panel, or other
body which has or claims jurisdiction over such Person, or any
property of such Person.
"APPLICABLE MARGIN": The rates for Base Margin Loans and Eurodollar
Loans based upon the following criteria:
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LEVEL REVOLVING CREDIT LOANS AND BASE MARGIN EURODOLLAR
L/CS OUTSTANDING APPLICABLE APPLICABLE MARGIN
MARGIN
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1 Less than $450,000,000 0% 1.75%
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2 Greater than or equal to 0% 2.00%
$450,000,000, but less
than $550,000,000
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3 Greater than or equal to 0% 2.50%
$550,000,000
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The Applicable Margin shall initially be established as those
rates set forth in Level 2 and shall remain at such Level
through May 31, 2001 regardless of the actual amount of
Revolving Credit Loans and L/Cs outstanding. Thereafter, the
Applicable Margin shall be adjusted monthly as of the first
day of each calendar month, commencing June 1, 2001, based
upon the average Revolving Credit Loans and L/Cs outstanding
during the immediately preceding calendar month. During the
existence of an Event of Default, interest shall accrue at the
rate set forth in Section 2-11(f).
"APPRAISED INVENTORY LIQUIDATION VALUE": The product of (a) the Cost of
Eligible Inventory (net of Inventory Reserves) multiplied by
(b) that percentage, determined from the then most recent
appraisal of the Borrowers' Inventory undertaken at the
request of the Administrative Agent by an independent
appraiser reasonably acceptable to the Lead Borrower, to
reflect the appraiser's estimate of the net recovery on the
Borrowers' Inventory in the event of an in-store liquidation
of that Inventory.
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"APPRAISED INVENTORY PERCENTAGE": 80%.
"ARRANGER": Fleet Securities, Inc.
"ASSIGNING REVOLVING CREDIT LENDER": Defined in Section 16-1(a).
"ASSIGNMENT AND ACCEPTANCE": Defined in Section 16-2.
"AVAILABILITY": The lesser of (a) or (b), where:
(a) is the result of
(i) The Revolving Credit Ceiling
Minus
(ii) The aggregate unpaid balance of the
Loan Account
Minus
(iii) The aggregate undrawn Stated Amount
of all then outstanding L/Cs.
(b) is the result of
(i) The Borrowing Base
Minus
(ii) The aggregate unpaid balance of the
Loan Account
Minus
(iii) The aggregate undrawn Stated Amount
of all then outstanding L/Cs.
Minus
(iv) The aggregate of the Availability
Reserves.
"AVAILABILITY RESERVES": Such reserves as the Administrative Agent from
time to time determines (after consultation with the Lead
Borrower (whose consent to any Availability Reserve shall not
be required)) in the Administrative Agent's reasonable
business judgment as being appropriate to reflect the
impediments to the Administrative Agent's ability to realize
upon the Collateral. Without limiting the generality of the
foregoing, Availability Reserves may include (but are not
limited to) reserves based on the following:
(i) Rent (but only if a landlord's waiver,
acceptable to the Administrative Agent, has
not been received by the Administrative
Agent).
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(ii) Customer Credit Liabilities.
(iii) Taxes and other governmental charges,
including, ad valorem, personal property,
and other taxes which have priority over the
Collateral Interests of the Administrative
Agent in the Collateral.
(iv) Payables more than forty-five (45) days
beyond normal terms.
"BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.
"BASE": For any day, (a) the Base Rate announced from time to time by
Fleet National Bank (or any successor in interest to Fleet
National Bank) as its "Base Rate" or (b) if no such Base Rate
is announced by Fleet National Bank, the Federal Funds
Effective Rate in effect on such day plus one-half of one
percent (0.50%) per annum. Any change in the Base Rate due to
a change in Fleet National Bank's Base Rate or the Federal
Funds Effective Rate shall be effective on the effective date
of such change in Fleet National Bank's Base Rate or the
Federal Funds Effective Rate, respectively.
"BASE MARGIN LOAN": Each Revolving Credit Loan while bearing interest
at the Base Margin Rate.
"BASE MARGIN RATE": The aggregate of Base plus the Applicable Margin
for Base Margin Loans.
"BLOCKED ACCOUNT": Any DDA into which the contents of any other DDA is
transferred.
"BLOCKED ACCOUNT AGREEMENT": An Agreement, in form satisfactory to the
Administrative Agent, which Agreement recognizes the
Administrative Agent's Collateral Interest in the contents of
the DDA which is the subject of such Agreement and agrees
that, after and during the continuance of a Cash Control
Event, such contents shall be transferred only to the
Concentration Account or as otherwise instructed by the
Administrative Agent.
"BORROWER" and "BORROWERS": Is defined in the Preamble and includes
all domestic Subsidiaries of any Borrower hereafter acquired
or created which own any Inventory or Accounts.
"BORROWING BASE": The aggregate of the following:
The face amount of Eligible Credit Card Receivables
multiplied by the Credit Card Advance Rate.
Plus
The lesser of (a) the Cost of Eligible Inventory (net
of Inventory Reserves) multiplied by the Inventory Advance
Rate or (b) the Appraised Inventory Percentage of the
Appraised Inventory Liquidation Value, provided that any
reduction in the amounts available to be borrowed under this
paragraph as a result of a change in the Appraised Inventory
Liquidation Value shall not take place until five (5) days
after the date that the Lead Borrower is advised by the
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Administrative Agent of such change in the Appraised Inventory
Liquidation Value.
"BORROWING BASE CERTIFICATE": Is defined in Section 5-4.
"BUSINESS DAY": Any day other than (a) a Saturday or Sunday; (b) any
day on which banks in Boston, Massachusetts or in Cleveland,
Ohio, and when involving any DDA or Blocked Account, the
office of the financial institution at which that DDA or
Blocked Account, as the case may be, is maintained, generally
are not open to the general public for the purpose of
conducting commercial banking business; or (c) a day on which
the principal office of the Administrative Agent is not open
to the general public to conduct business.
"CAPITAL EVENT": The issuance by any Borrower on or after the Closing
Date (a) of Indebtedness for borrowed money in an underwritten
public offering or private placement with institutional
investors or (b) of any equity interest for cash, excluding
any sale or issuance to management, employees or directors
pursuant to stock option or similar plans and excluding any
sale or issuance of an amount not to exceed an aggregate of
$20,000,000.00 of proceeds received from and after the Closing
Date. Nothing contained in this definition or in any provision
relating to Capital Events shall permit or be deemed to permit
the Borrowers to effectuate a Capital Event which is otherwise
prohibited hereunder.
"CAPITAL EXPENDITURES": The expenditure of funds or the incurrence of
liabilities which may be capitalized in accordance with GAAP.
"CAPITAL LEASE": Any lease which may be capitalized in accordance with
GAAP.
"CASH CONTROL EVENT": Either (a) the occurrence and continuance of
any Event of Default, or (b) the occurrence and continuance of
each of the following: (i) Availability at any time is less
than 7.2 percent of the then Revolving Credit Ceiling (rounded
to the nearest million), and (ii) the Fixed Charge Coverage
Ratio is less than 1:1. For purposes hereof, the occurrence of
a Cash Control Event under clause (b) hereof shall be deemed
continuing notwithstanding that Availability may thereafter
exceed the amounts set forth in the such clause unless and
until Availability exceeds such amounts for three consecutive
months, in which case a Cash Control Event shall no longer be
deemed to be continuing for purposes hereof; PROVIDED THAT a
Cash Control Event under clause (b) hereof shall be deemed
continuing (even if Availability exceeds the required amounts
for three consecutive months) if a Cash Control Event has
occurred and been discontinued on three occasions in any
twelve month period.
"CHANGE IN CONTROL": The occurrence of any of the following:
(a) The acquisition, by any group of persons (within
the meaning of the Securities Exchange Act of 1934, as
amended) or by any Person, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission) of 33 1/3% or more of the issued and outstanding
capital stock of the Lead Borrower having the right, under
ordinary circumstances, to vote for the election of directors
of the Lead Borrower, other than (i) the Lead Borrower, (ii)
any trustee or other fiduciary holding securities under an
employee benefit plan of the Lead Borrower, or (iii) any
members of the Current Holder Group (as hereinafter defined).
As used herein, the term "Current Holder Group" shall mean
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(1) those Persons who currently hold 5% or more of the issued
and outstanding capital stock of the Lead Borrower on Closing
Date, (2) Persons who are officers or directors of the Lead
Borrower on the Closing Date, (3) the spouses, heirs,
legatees, descendants and relatives of any Person described in
(1) or (2), (4) the executors, administrators of the estate of
any Person described in (1) or (2), and any court appointed
guardian of any such Person, and (5) any trust, family
partnership or similar investment entity for the benefit of
any Person described in (1) or (2).
(b) More than half of the persons who were directors
of the Lead Borrower on the first day of any period consisting
of twelve (12) consecutive calendar months (the first of which
twelve (12) month periods commencing with the first day of the
month during which this Agreement was executed), cease, for
any reason other than retirement, death or disability, to be
directors of the Lead Borrower, and their respective
replacements are not nominated or appointed by a majority of
the Persons who were directors on the first day of such twelve
(12) consecutive calendar months or who were nominated or
appointed by directors so nominated or appointed.
(c) Any failure of the Lead Borrower to own,
beneficially and of record, 100% of the capital stock of all
other Borrowers.
"CLOSING DATE": The date upon which the conditions precedent set forth
in Article 3 hereof have been satisfied or waived and the
first Revolving Credit Loans are to be made and L/Cs to be
issued hereunder.
"CO-AGENTS": Is referred to in the Preamble.
"COLLATERAL": Is defined in Section 8-1.
"COLLATERAL INTEREST": Any interest in property to secure an
obligation, including, without limitation, a security
interest, mortgage, and deed of trust.
"CONCENTRATION ACCOUNT": Is defined in Section 7-3.
"CONSENT": Actual consent given by the Lender from whom such consent is
sought; or the passage of seven (7) Business Days from receipt
of written notice to a Revolving Credit Lender from the
Administrative Agent of a proposed course of action to be
followed by the Administrative Agent without such Revolving
Credit Lender's giving the Administrative Agent written notice
of that Revolving Credit Lender's objection to such course of
action, provided that the Administrative Agent may rely on
such passage of time as consent by a Revolving Credit Lender
only if such written notice states that consent will be deemed
effective if no objection is received within such time period.
"CONSOLIDATED": When used to modify a financial term, test, statement,
or report, refers to the application or preparation of such
term, test, statement or report (as applicable) based upon the
consolidation, in accordance with GAAP, of the financial
condition or operating results of the Lead Borrower and its
Subsidiaries.
"COST": The lower of (a) or (b), where:
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(a) is the calculated cost of purchases, based upon
the Borrowers' accounting practices in effect on the date on
which this Agreement was executed as such calculated cost is
determined from: invoices received by the Borrowers; the
Borrowers' purchase journal; or the Borrowers' perpetual
inventory system.
(b) is, without duplication of any Inventory Reserves
for Markdowns, the lowest ticketed or promoted price at which
the subject Inventory is offered to the public by the
Borrowers, after all ▇▇▇▇-▇▇▇▇▇ (whether or not such price is
then reflected on the Borrowers' accounting system).
"Cost" does not include inventory capitalization costs or
other non-purchase price charges (such as freight) used in the
Borrowers' calculation of cost of goods sold.
"COSTS OF COLLECTION": Includes, without limitation, all reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred
by the Administrative Agent's attorneys, and all reasonable
out-of-pocket costs incurred by the Administrative Agent in
the administration of the Liabilities and/or the Loan
Documents, including, without limitation, reasonable costs and
expenses associated with travel on behalf of the
Administrative Agent, where such costs and expenses are
directly or indirectly related to or in respect of the
Administrative Agent's: administration and management of the
Liabilities; negotiation, documentation, and amendment of any
Loan Document; or efforts to preserve, protect, collect, or
enforce the Collateral, the Liabilities, and/or the
Administrative Agent's Rights and Remedies and/or any of the
rights and remedies of the Administrative Agent against or in
respect of any guarantor or other person liable in respect of
the Liabilities (whether or not suit is instituted in
connection with such efforts). "Costs of Collection" shall
also include the reasonable fees and expenses of Lenders'
Special Counsel. The Costs of Collection are Liabilities, and
at the Administrative Agent's option may bear interest at the
then effective Base Margin Rate.
"COVENANT COMPLIANCE EVENT": Availability at any time is less than ten
(10) percent of the then Revolving Credit Ceiling (rounded to
the nearest million). For purposes hereof, the occurrence of a
Covenant Compliance Event shall be deemed continuing (a) as
long as the Borrowers are not in compliance with the required
Fixed Charge Coverage Ratio, notwithstanding that Availability
may thereafter exceed the amounts set forth in the preceding
sentence, or (b) as long as the Borrowers are in compliance
with the required Fixed Charge Coverage Ratio, until
Availability exceeds the amounts set forth in the preceding
sentence.
"CREDIT CARD ADVANCE RATE": 85%
"CUSTOMER CREDIT LIABILITY": Gift certificates, merchandise credits,
layaway obligations, frequent shopping programs, and similar
liabilities of any Borrower to its retail customers and
prospective customers.
"DDA": Any checking or other demand daily depository account maintained
by any Borrower in which proceeds of the Borrowers' Inventory
and Accounts are deposited.
"DEBT SERVICE CHARGES": For any fiscal period, the sum of (i) the
expenses of the Lead Borrower and its Subsidiaries for such
period for interest paid in cash with respect
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to Indebtedness (including, without limitation, the
Liabilities but excluding any synthetic lease payments) and
all fees paid in cash on account of or with respect thereto,
PLUS (ii) principal payments made or required to be made on
account of Indebtedness (excluding the Liabilities and any
synthetic lease payments but including, without limitation,
Capitalized Leases) for such period, in each case determined
in accordance with GAAP.
"DEFAULT": Any occurrence, circumstance, or state of facts with respect
to a Borrower which (a) is an Event of Default; or (b) would
become an Event of Default if any requisite notice were given
and/or any requisite period of time were to run and such
occurrence, circumstance, or state of facts were not
absolutely cured within any applicable grace period.
"DELINQUENT REVOLVING CREDIT LENDER": Defined in Section 12-3(c).
"DEPOSIT ACCOUNT": Has the meaning given that term in the UCC.
"DOCUMENTARY L/CS": L/Cs issued pursuant to this Agreement to support
any Borrower's purchases in the ordinary course of business of
Inventory for use in its retail store business, the drawing
under which requires the delivery of bills of lading, airway
bills or other similar types of documents of title.
"DOCUMENTATION AGENTS": Are referred to in the Preamble.
"DOCUMENTS": Has the meaning given that term in the UCC.
"EBITDA": Consolidated earnings before interest, taxes, depreciation,
and amortization, each as determined in accordance with GAAP.
"ELIGIBLE ASSIGNEE": A bank, insurance company, finance company or
other financial institution or fund engaged in the business of
making or investing in commercial loans in the ordinary course
of its business having a combined capital and surplus or
assets under management in excess of $300,000,000 or any
Affiliate of any Revolving Credit Lender, or any Person to
whom a Revolving Credit Lender assigns its rights and
obligations under this Agreement as part of a programmed
assignment and transfer of such Revolving Credit Lender's
rights in and to a material portion of such Revolving Credit
Lender's portfolio of asset based credit facilities.
"ELIGIBLE CREDIT CARD RECEIVABLES":Accounts due on a non-recourse basis
from major credit card processors (which, if due on account of
a private label credit card program, are deemed in the
reasonable discretion of the Administrative Agent to be
eligible) as arise in the ordinary course of business, as have
been earned by performance. Unless otherwise approved in
writing by the Administrative Agent, none of the following
shall be deemed to be Eligible Credit Card Receivables:
(a) Accounts that have been outstanding for more than six
(6) Business Days from the date of sale;
(b) Accounts with respect to which a Borrower does not
have good, valid and marketable title thereto, free
and clear of any Encumbrance (other than Encumbrances
granted to the Administrative Agent, for its benefit
and the
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ratable benefit of the other Revolving Credit
Lenders, pursuant to the Loan Documents);
(c) Accounts which are disputed, are with recourse, or
with respect to which a claim, counterclaim, offset
or chargeback has been asserted (to the extent of
such claim, counterclaim, offset or chargeback);
(d) Accounts which the Administrative Agent determines in
its reasonable discretion to be uncertain of
collection.
"ELIGIBLE INVENTORY": Inventory owned by any Borrower and maintained by
a Borrower at a warehouse or held for sale in any of the
Borrowers' retail stores, in each case in the United States of
America (including its territories and possessions), which is
reflected in the Borrowers' perpetual inventory, as to which
Inventory, the Administrative Agent has a perfected security
interest which is prior and superior to all security
interests, claims, and Encumbrances. In no event, however,
does "Eligible Inventory" include: any inventory-in-transit to
the Borrowers, any Inventory subject to an Encumbrance in
favor of Huntington National Bank, non-merchandise inventory
(such as labels, bags, and packaging materials); damaged
goods; return to vendor merchandise; packaways; or consigned
inventory.
"EMPLOYEE BENEFIT PLAN": As defined in ERISA.
"ENCUMBRANCE": Each of the following:
(a) A Collateral Interest or agreement to create or
grant a Collateral Interest; the interest of a lessor under a
Capital Lease; conditional sale or other title retention
agreement; sale of accounts receivable or chattel paper; or
other arrangement pursuant to which any Person is entitled to
any preference or priority with respect to the property or
assets of another Person or the income or profits of such
other Person; each of the foregoing whether consensual or
non-consensual and whether arising by way of agreement,
operation of law, legal process or otherwise.
(b) The filing of any financing statement under the
UCC or comparable law of any jurisdiction.
"END DATE": The date upon which both (a) all Liabilities (excluding any
contingent Liabilities not then due and payable) have been
paid in full and (b) all obligations of any Revolving Credit
Lender to make loans and advances and to provide other
financial accommodations to the Borrowers hereunder shall have
been irrevocably terminated.
"ENVIRONMENTAL LAWS": All of the following:
(a) Applicable Law which regulates or relates to, or
imposes any standard of conduct or liability on account of or
in respect to environmental protection matters, including,
without limitation, Hazardous Materials, as are now or
hereafter in effect.
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(b) The common law relating to damage to Persons or
property from Hazardous Materials.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE": Any Person which is under common control with a
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes any Borrower and which would be
treated as a single employer under Section 414 of the Internal
Revenue Code of 1986, as amended.
"EURODOLLAR BUSINESS DAY": Any day which is both a Business Day and a
day on which the principal market in Eurodollars in which
Fleet National Bank participates is open for dealings in
United States Dollar deposits.
"EURODOLLAR LOAN": Any Revolving Credit Loan which bears interest at a
Eurodollar Rate.
"EURODOLLAR OFFER RATE": That rate of interest (rounded upwards, if
necessary, to the next 1/100 of 1%) determined by the
Administrative Agent to be the highest prevailing rate per
annum at which deposits in U.S. Dollars are offered to Fleet
National Bank, by first-class banks in the Eurodollar market
in which Fleet National Bank participates at or about 10:00AM
(Boston Time) two (2) Eurodollar Business Days before the
first day of the Interest Period for the subject Eurodollar
Loan, for a deposit approximately in the amount of the subject
loan for a period of time approximately equal to such Interest
Period.
"EURODOLLAR RATE": That per annum rate which is the aggregate of the
Eurodollar Offer Rate plus the Applicable Margin for
Eurodollar Loans, except that, in the event that the
Administrative Agent determines that any Revolving Credit
Lender may be subject to the Reserve Percentage, the
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Loans then outstanding (from the date on which that Reserve
Percentage first became applicable to such Eurodollar Loans),
and with respect to all Eurodollar Loans thereafter made, an
interest rate per annum equal the sum of (a) plus (b), where:
(a) is the decimal equivalent of the following fraction:
Eurodollar Offer Rate
---------------------
1 minus Reserve Percentage
(b) is the Applicable Margin for Eurodollar Loans.
"EVENTS OF DEFAULT": Is defined in Article 10.
"EXEMPT DDA": A depository account maintained by any Borrower, the
only contents of which may be transfers from the Operating
Account and actually used solely (i) for ▇▇▇▇▇ cash purposes;
or (ii) for payroll.
"FEDERAL FUNDS EFFECTIVE RATE". For any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the
Federal Reserve System arranged by federal fund brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such
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rate is not so published for any day that is a Business Day,
the average of the quotations for such day on such
transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the
Administrative Agent.
"FEE LETTER": That letter dated the date hereof and styled "Fee Letter"
between the Lead Borrower and the Administrative Agent, as
such letter may from time to time be amended.
"FISCAL": When followed by "month" or "quarter", the relevant fiscal
period based on the Borrowers' fiscal year and accounting
conventions.
"FIXED CHARGE COVERAGE RATIO": As to the Lead Borrower and its
Subsidiaries, for any period, the ratio of (a) Consolidated
EBITDA minus Capital Expenditures incurred during such period
minus income taxes paid in cash during such period, to (b)
Debt Service Charges for such period, all as determined in
accordance with GAAP. The Fixed Charge Ratio shall be
calculated on a trailing four quarters basis.
"FLEET": Is defined in the Preamble hereto.
"FRFI": Fleet Retail Finance Inc.
"GAAP": Principles which are consistent with those promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors (or successors) in effect and applicable to that
accounting period in respect of which reference to GAAP is
being made, provided, however, in the event of a Material
Accounting Change, then unless otherwise specifically agreed
to by the Administrative Agent, (a) the Borrowers' compliance
with the financial performance covenants imposed pursuant to
Section 5-11 shall be determined as if such Material
Accounting Change had not taken place and (b) the Lead
Borrower shall include, with its monthly, quarterly, and
annual financial statements a schedule, certified by the Lead
Borrower's chief financial officer, on which the effect of
such Material Accounting Change on that statement shall be
described.
"GATEWAY AGREEMENT": Has the meaning set forth in Section 4-19(a)
hereof.
"GOODS": Has the meaning given that term in the UCC, and also includes
all things movable when a security interest therein attaches
and also all computer programs embedded in goods and any
supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such manner that it customarily
is considered part of the goods or (ii) by becoming the owner
of the goods, a Person acquires a right to use the program in
connection with the goods.
"HAZARDOUS MATERIALS": Any (a) substance which is defined or regulated
as a hazardous material in or under any Environmental Law and
(b) oil in any physical state.
"HEDGE AGREEMENTS": All obligations of any Person in respect of
interest rate swap agreements, currency swap agreements and
other similar agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates.
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"INCREASED REPORTING EVENT": Either (a) the occurrence and continuance
of any Event of Default, or (b) Availability at any time is
less than 14.3 percent of the then Revolving Credit Ceiling
(rounded to the nearest million). For purposes hereof, the
occurrence of an Increased Reporting Event shall be deemed
continuing notwithstanding that Availability may thereafter
exceed the amounts set forth in the preceding sentence unless
and until Availability exceeds such amounts for thirty (30)
consecutive days, in which case a Increased Reporting Event
shall no longer be deemed to be continuing for purposes
hereof.
"INDEBTEDNESS": All indebtedness and obligations of or assumed by any
Person on account of or in respect to, without duplication,
any of the following:
(a) In respect of money borrowed (including any
indebtedness which is non-recourse to the credit of such
Person but which is secured by an Encumbrance on any asset of
such Person) whether or not evidenced by a promissory note,
bond, debenture or other written obligation to pay money.
(b) In connection with any letter of credit or
acceptance transaction (including, without limitation, the
face amount of all letters of credit and acceptances issued
for the account of such Person or reimbursement on account of
which such Person would be obligated).
(c) In connection with the sale or discount of
accounts receivable or chattel paper of such Person.
(d) On account of deposits or advances.
(e) As lessee under Capital Leases.
(f) On account of Hedge Agreements.
(g) In connection with any sale and leaseback
transaction.
"Indebtedness" also includes:
(1) Indebtedness of others secured by an
Encumbrance on any asset of such Person,
whether or not such Indebtedness is assumed
by such Person.
(2) Any guaranty, endorsement, suretyship or
other undertaking pursuant to which that
Person may be liable on account of any
obligation of any third party.
(3) The Indebtedness of a partnership or
joint venture for which such Person is liable
as a general partner or joint venturer.
"INDEMNIFIED PERSON": Is defined in Section 19-13.
"INFORMATION": Is defined in Section 19-22.
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"INSTRUMENTS": Has the meaning given that term in the UCC.
"INTEREST PAYMENT DATE": With reference to:
Each Eurodollar Loan: The last day of the Interest
Period relating thereto (provided that if the Interest Period
is greater than three months in length, the Interest Payment
Date shall be the last day of the third month of such Interest
Period and the last day of the Interest Period); the
Termination Date; and the End Date.
Each Base Margin Loan: The first day of each month;
the Termination Date; and the End Date.
"INTEREST PERIOD": The following:
(a) With respect to each Eurodollar Loan: Subject to
Subsection (c), below, the period commencing on the date of
the making or continuation of, or conversion to, the subject
Eurodollar Loan and ending one, two, three, or six months
thereafter, as the Lead Borrower may elect by notice (pursuant
to Section 2-5) to the Administrative Agent
(b) With respect to each Base Margin Loan: Subject to
Subsection (c), below, the period commencing on the date of
the making or continuation of or conversion to such Base
Margin Loan and ending on that date (i) as of which the
subject Base Margin Loan is converted to a Eurodollar Loan, as
the Lead Borrower may elect by notice (pursuant to Section
2-5) to the Administrative Agent, or (ii) on which the subject
Base Margin Loan is paid by the Borrowers.
(c) The setting of Interest Periods is in all
instances subject to the following:
(i) Any Interest Period for a Base Margin
Loan which would otherwise end on a day which is not
a Business Day shall be extended to the next
succeeding Business Day.
(ii) Any Interest Period for a Eurodollar
Loan which would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding
Business Day, unless that succeeding Business Day is
in the next calendar month, in which event such
Interest Period shall end on the last Business Day of
the month during which the Interest Period ends.
(iii) Subject to Subsection (iv) below, any
Interest Period applicable to a Eurodollar Loan,
which Interest Period begins on a day for which there
is no numerically corresponding day in the calendar
month during which such Interest Period ends, shall
end on the last Business Day of the month during
which that Interest Period ends.
(iv) Any Interest Period which would
otherwise end after the Termination Date shall end on
the Termination Date.
(v) The number of Interest Periods in effect
at any one time is subject to Section 2-11(d) hereof.
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"INVENTORY": Includes, without limitation, "inventory" as defined in
the UCC and also all: (a) Goods which are leased by a Person
as lessor; are held by a Person for sale or lease or to be
furnished under a contract of service; are furnished by a
Person under a contract of service; or consist of raw
materials, work in process, or materials used or consumed in a
business; (b) Goods of said description in transit; (c) Goods
of said description which are returned, repossessed and
rejected; (d) packaging, advertising, and shipping materials
related to any of the foregoing; and (e) Documents which
represent any of the foregoing.
"INVENTORY ADVANCE RATE": The following percentages for the periods
indicated:
----------------------------------------------------------------------------
Period Inventory Advance Rate
----------------------------------------------------------------------------
January 1 through June 30 of each year 62%
----------------------------------------------------------------------------
July 1 through December 31 of each year 64%
-------------------------------------------- -------------------------------
"INVENTORY RESERVES": Such Reserves as may be established from
time to time by the Administrative Agent (after consultation
with the Lead Borrower (whose consent to any Inventory Reserve
shall not be required)), without duplication, in the
Administrative Agent's reasonable business judgment with
respect to the determination of the saleability, at retail, of
the Eligible Inventory or which reflect such other factors as
affect the market value of the Eligible Inventory. Without
limiting the generality of the foregoing, Inventory Reserves
may include (but are not limited to) reserves based on,
without duplication, the following:
(i) Obsolescence (based upon Inventory on hand
beyond a given number of days).
(ii) Seasonality.
(iii) Shrinkage.
(iv) Imbalance.
(v) Change in Inventory character except as
permitted pursuant to Section 4-22 hereof.
(vi) Change in Inventory composition.
(vii) Change in Inventory mix.
(viii) Markdowns (both permanent and point of
sale).
(ix) Retail markons and markups inconsistent with
prior period practice and performance; or
advertising calendar and planned advertising
events.
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"ISSUER": The issuer of any L/C. The Issuer shall be Fleet or such
other Revolving Credit Lender (or Affiliate of a Revolving
Credit Lender) as the Administrative Agent may, in its
discretion, select with the consent of the Lead Borrower whose
consent shall not be unreasonably delayed or withheld.
"L/C": Any letter of credit, the issuance of which is procured by the
Administrative Agent for the account of any Borrower and any
acceptance made on account of such letter of credit.
"LANDLORD'S LIEN STATES": Collectively, Pennsylvania, Washington,
Virginia and each other state in which Applicable Law grants a
landlord a priority lien for amounts due or to become due
under a Lease.
"LEAD BORROWER": Is defined in the Preamble hereto.
"LEASE": Any lease or other agreement, no matter how styled or
structured, pursuant to which a Borrower is entitled to the
use or occupancy of any space.
"LENDERS' SPECIAL COUNSEL": A single counsel, selected by the Majority
Lenders during the existence of an Event of Default, to
represent the interests of the Revolving Credit Lenders in
connection with the enforcement, attempted enforcement, or
preservation of any rights and remedies under this, or any
other Loan Document, as well as in connection with any
"workout", forbearance, or restructuring of the credit
facility contemplated hereby.
"LETTER-OF-CREDIT RIGHT": Has the meaning given that term in UCC 9'99
and also refers to any right to payment or performance under
an L/C, whether or not the beneficiary has demanded or is at
the time entitled to demand payment or performance.
"LIABILITIES": Collectively, the following:
(a) All and each of the following, whether now existing or
hereafter arising, under this Agreement or under any of the other Loan
Documents:
(i) Any and all direct and indirect liabilities,
debts, and obligations of each Borrower to the Administrative
Agent or any Revolving Credit Lender, each of every kind,
nature, and description.
(ii) Each obligation to repay any loan, advance,
indebtedness, note, obligation, overdraft, or amount now or
hereafter owing by any Borrower to the Administrative Agent or
any Revolving Credit Lender (including all future advances
whether or not made pursuant to a commitment by the
Administrative Agent or any Revolving Credit Lender), whether
or not any of such are liquidated, unliquidated, primary,
secondary, secured, unsecured, direct, indirect, absolute,
contingent, or of any other type, nature, or description, or
by reason of any cause of action which the Administrative
Agent or any Revolving Credit Lender may hold against any
Borrower.
(iii) All notes and other obligations of each
Borrower now or hereafter assigned to or held by the
Administrative Agent or any Revolving Credit Lender, each of
every kind, nature, and description.
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(iv) All interest, fees, and charges and other
amounts which may be charged by the Administrative Agent or
any Revolving Credit Lender to any Borrower and/or which may
be due from any Borrower to the Administrative Agent or any
Revolving Credit Lender from time to time.
(v) All reasonable costs and expenses incurred or
paid by the Administrative Agent or any Revolving Credit
Lender in respect of any agreement between any Borrower and
the Administrative Agent or any Revolving Credit Lender or
instrument furnished by any Borrower to the Administrative
Agent or any Revolving Credit Lender (including, without
limitation, Costs of Collection, reasonable attorneys' fees,
and all reasonable court and litigation costs and expenses).
(vi) Any and all covenants of each Borrower to or
with the Administrative Agent or any Revolving Credit Lender
and any and all obligations of each Borrower to act or to
refrain from acting in accordance with any agreement between
that Borrower and the Administrative Agent or any Revolving
Credit Lender or instrument furnished by that Borrower to the
Administrative Agent or any Revolving Credit Lender.
(vii) Each of the foregoing as if each reference to
the " the Administrative Agent or any Revolving Credit Lender"
were to each Affiliate of the Administrative Agent.
(b) Any and all direct or indirect liabilities, debts, and
obligations of each Borrower to the Administrative Agent or any
Affiliate of the Administrative Agent, each of every kind, nature, and
description owing on account of any service or accommodation provided
to, or for the account of any Borrower pursuant to this or any other
Loan Document, including cash management services and the issuances of
L/Cs.
"LINE FEE": A fee equal to 0.25% per annum of the average difference,
during the quarter just ended (or relevant period with respect
to the payment being made on the Termination Date) between the
Revolving Credit Ceiling and the sum of (a) the aggregate of
the unpaid principal balance of the Revolving Credit Loans
(other than the SwingLine Loans) and (b) the undrawn Stated
Amount of L/Cs outstanding during the relevant period.
"LIQUIDATION": The exercise, by the Administrative Agent, of those
rights accorded to the Administrative Agent under the Loan
Documents as a creditor of the Borrowers during the existence
of an Event of Default looking towards the realization on the
Collateral. Derivations of the word "Liquidation" (such as
"Liquidate") are used with like meaning in this Agreement.
"LOAN ACCOUNT": Is defined in Section 2-8.
"LOAN DOCUMENTS": This Agreement, each instrument and document
executed and/or delivered as contemplated by Article 3, below,
and each other instrument or document from time to time
executed and/or delivered in connection with the arrangements
contemplated hereby or in connection with any transaction with
the Administrative Agent or any Affiliate of the
Administrative Agent, including, without limitation, any
transaction which arises out of any cash management,
depository, investment, letter of credit, interest rate
protection, or equipment
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leasing services provided by the Administrative Agent or any
Affiliate of the Administrative Agent, as each may be amended
from time to time.
"MAJORITY LENDERS": Prior to termination of the Revolving Credit
Commitments, Revolving Credit Lenders (other than Delinquent
Revolving Credit Lenders) holding 51% or more of the Revolving
Credit Commitments (other than any Revolving Credit
Commitments held by Delinquent Revolving Credit Lenders).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 51% or more of the Liabilities (other
than any Liabilities held by Delinquent Revolving Credit
Lenders).
"MATERIAL ACCOUNTING CHANGE": Any change in GAAP applicable to
accounting periods subsequent to the Borrowers' fiscal year
most recently completed prior to the execution of this
Agreement, which change has a material effect on the
Borrowers' Consolidated financial condition or operating
results, as reflected on financial statements and reports
prepared by or for the Borrowers, when compared with such
condition or results as if such change had not taken place or
where preparation of the Borrowers' statements and reports in
compliance with such change results in the breach of a
financial performance covenant imposed pursuant to Section
5-11 where such a breach would not have occurred if such
change had not taken place or visa versa.
"MATURITY DATE": November 30, 2003.
"NOMINEE": A business entity (such as a corporation or limited
partnership) formed by the Administrative Agent to own or
manage any Post Foreclosure Asset.
"NOTICE OF ACCELERATION": Written notice as follows:
(a) From the Administrative Agent to the Revolving
Credit Lenders, as provided in 13-1(a).
(b) From the Majority Lenders to the Administrative
Agent, as provided in Section 13-1(b).
"OPERATING ACCOUNT": Is defined in Section 7-3.
"OVERLOAN": A loan, advance, or providing of credit support (such as
the issuance of any L/C) to the extent that, immediately after
its having been made, Availability is less than zero.
"PARTICIPANT": Is defined in Section 19-16, hereof.
"PAYMENT INTANGIBLE": Has the meaning given that term in UCC 9'99 and
also refers to any general intangible under which the Account
Debtor's primary obligation is a monetary obligation.
"PERMISSIBLE OVERLOANS": Revolving Credit Loans which are OverLoans,
but as to which each of the following conditions is satisfied:
(a) the Revolving Credit Ceiling is not exceeded; and (b) when
aggregated with all other Permissible OverLoans, such
Revolving Credit Loans do not aggregate more than three
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percent (3%) of the aggregate of the Borrowing Base; (c) the
Permissible Overloans shall not remain outstanding for more
than thirty (30) consecutive days, and (d) such Revolving
Credit Loans are made or undertaken in the Administrative
Agent's discretion to protect and preserve the interests of
the Revolving Credit Lenders.
"PERMITTED ACQUISITIONS": An Acquisition in which each of the following
conditions are satisfied:
(i) No Default or Event of Default then exists or
would arise from the consummation of such
Acquisition.
(ii) Such Acquisition shall have been approved by the
Board of Directors of the Person (if such Person is a
corporation) which is the subject of such Acquisition
and such Person shall not have announced that it will
oppose such Acquisition or shall not have commenced
any action which alleges that such Acquisition will
violate applicable law. (iii) The Lead Borrower shall
have furnished the Administrative Agent with thirty
(30) days prior notice of such intended Acquisition
and shall have furnished the Administrative Agent
with a business plan, a current draft of the
acquisition agreement, summary of any due diligence
undertaken by the Borrowers in connection with such
Acquisition, appropriate financial statements of the
Person which is the subject of such Acquisition, pro
forma financial statements for the twelve month
period following such Acquisition after giving effect
to such Acquisition, and such other information as
the Administrative Agent may reasonably require.
(iv) The structure of the Acquisition shall be
acceptable to the Administrative Agent in its
reasonable judgment, which acceptance shall not be
unreasonably withheld or delayed. After consummation
of the Acquisition, a Borrower shall own directly or
indirectly a majority of the equity interests in the
Person being acquired and shall control a majority of
any voting interests, and/or shall otherwise control
the governance of the Person being acquired.
(v) If the Acquisition involves a merger,
consolidation or stock acquisition, the Person which
is the subject of such Acquisition shall be engaged
in a line of business reasonably related to that of
the Lead Borrower or as otherwise permitted pursuant
to Section 4-22 hereof.
(vi) If the Person which is the subject of such
Acquisition will be maintained as a Subsidiary of the
Borrower, the Administrative Agent shall have
received a guaranty of the Liabilities from such
Subsidiary and a security interest in such
Subsidiary's inventory, accounts and other property
of the same nature as constitutes Collateral in order
to secure the Liabilities.
(vii) The total consideration paid for such
Acquisition (in the form of cash, earn outs,
property, or assumption of Indebtedness, exclusive of
common stock of the Lead Borrower) shall not exceed
$150,000,000.00 in the aggregate.
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(viii) The aggregate consideration furnished in
connection with Permitted Acquisitions, howsoever
classified (whether in the form of cash, earn outs,
property, or assumption of Indebtedness, exclusive of
common stock of the Lead Borrower) for all
Acquisitions after the Closing Date, after giving
effect to the proposed Acquisition, shall not exceed
$200,000,000.00.
(ix) After giving effect to the Acquisition,
Availability shall be at least $200,000,000.00 and
Availability is projected on a pro forma basis to be
at least $200,000,000.00 for the six months
immediately following such Acquisition.
"PERMITTED ENCUMBRANCES": Any of the following:
(a) Encumbrances for taxes not yet due or which are being
contested in good faith by appropriate proceedings,
PROVIDED THAT adequate reserves with respect thereto
are maintained on the books of the Borrowers in
accordance with GAAP, and PROVIDED FURTHER THAT, no
notice of tax lien has been filed with respect
thereto.
(b) Carrier's, warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or similar Encumbrances
arising in the ordinary course of business which are
not overdue by more than thirty (30) days or that are
being contested in good faith by appropriate
proceedings, PROVIDED THAT adequate reserves with
respect thereto are maintained on the books of the
Borrowers in accordance with GAAP.
(c) Pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation.
(d) Deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like
nature in the ordinary course of business.
(e) Easements, rights of way, leases, restrictions and
other similar encumbrances incurred in the ordinary
course of business that in the aggregate are not
substantial in amount and which do not in any case
materially detract from the value of the real estate
subject thereto or materially interfere with the
conduct of the business of the Borrowers.
(f) Any interest or title of a lessor under any lease
entered into by any Borrower in the ordinary course
of business but only with respect to the assets so
leased.
The inclusion of the foregoing as "Permitted Encumbrances" shall not
limit or impair the right of the Administrative Agent to impose
Reserves on account thereof in accordance with the provisions of this
Agreement.
"PERMITTED INVESTMENTS": Each of the following:
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(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing not more than one year from the date of
acquisition thereof;
(b) investments in commercial paper maturing not more than one
year from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poors
or from ▇▇▇▇▇'▇ Investment Services, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing not more than one year from the
date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office
of any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
(without regard to the limitation on maturity contained in such clause)
and entered into with a financial institution satisfying the criteria
described in clause (c) above;
(e) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poors or
from ▇▇▇▇▇'▇ Investment Services, Inc.; and
(f) investments in money market funds, substantially all the
assets of which are comprised of securities of the types described in
clauses (a) through (e) above.
"PERSON": Any natural person, and any corporation, limited liability
company, trust, partnership, joint venture, or other
enterprise or entity.
"POST FORECLOSURE ASSET": All or any part of the Collateral, ownership
of which is acquired by the Administrative Agent or a Nominee
on account of the "bidding in" at a disposition as part of a
Liquidation or by reason of a "deed in lieu" type of
transaction.
"PRIMARY BLOCKED ACCOUNT": Account No. ▇▇▇▇▇▇▇ maintained by the Lead
Borrower with National City Bank, or such other account as the
Borrower may so designate and the Administrative Agent shall
approve (which approval shall not be unreasonably delayed or
withheld). The Primary Blocked Account shall be deemed a
Blocked Account for all purposes of this Agreement.
"PROCEEDS": Includes, without limitation, "Proceeds" as defined in the
UCC and each type of property described in Section 8-1 hereof.
"REALTY SALE": Any sale, lease, conveyance, transfer, financing, or
other disposition by any Borrower (including by way of merger,
consolidation or a sale-leaseback transaction) in any
transaction or group of transactions that are part of a common
plan, of (a) any real estate described on EXHIBIT 1-1 hereto
or (b) any real estate
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which is presently the subject of a synthetic lease and is
hereafter acquired by any Borrower or any Subsidiary or
Affiliate of any Borrower with proceeds of the Revolving
Credit Loans or any L/C.
"RECEIPTS": All cash, cash equivalents, money, checks, credit card
slips, receipts and other Proceeds from any sale of the
Collateral.
"RECEIVABLES COLLATERAL": That portion of the Collateral which consists
of (i) Accounts, (ii) Instruments arising from, relating to,
or constituting proceeds of, the Borrowers' Accounts and
Inventory, (iii) Documents relating to the Borrowers'
Inventory, (iv) Payment Intangibles arising from, relating to,
or constituting proceeds of, the Borrowers' Accounts and
Inventory, and (v) Letter-of-Credit Rights, bankers'
acceptances, and all other rights to payment arising from, or
relating to, or constituting proceeds of, the Borrowers'
Accounts and Inventory.
"REGISTER": Is defined in Section 16-2(c).
"RELATED ENTITY": Any Person in which a Borrower is a partner, joint
venturer, stockholder, or member or in which a Borrower holds
an equity or other ownership interest, and which Person does
not constitute a Subsidiary of any Borrower.
"REQUIREMENTS OF LAW": As to any Person:
(a) Applicable Law.
(b) That Person's organizational documents.
(c) That Person's by-laws and/or other instruments
which deal with corporate or similar governance, as
applicable.
"RESERVE PERCENTAGE": The decimal equivalent of that rate applicable to
a Revolving Credit Lender under regulations issued from time
to time by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement of that
Revolving Credit Lender with respect to "Eurocurrency
liabilities" as defined in such regulations. The Reserve
Percentage applicable to a particular Eurodollar Loan shall be
based upon that in effect during the subject Interest Period,
with changes in the Reserve Percentage which take effect
during such Interest Period to take effect (and to
consequently change any interest rate determined with
reference to the Reserve Percentage) if and when such change
is applicable to such loans.
"RESERVES": The following: Availability Reserves and Inventory
Reserves. Notwithstanding any provisions of this Agreement to
the contrary, (a) the imposition of a new Reserve or a change
to a then existing Reserve may be made only with not less than
ten (10) Business Days prior notice to the Lead Borrower,
except that an increase or decrease in the amount of a then
existing Reserve, which increase or decrease is calculated in
accordance with the same methodology as was utilized to
establish the existing Reserve and merely reflects the results
of mathematical computations of the items already in the
category to which such Reserve applies (such as a change in
the aggregate of Customer Credit
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Liabilities or leases in jurisdictions pursuant to which a
priority landlord's lien may exist), may be made without such
notice, (b) the Administrative Agent shall impose a new
Reserve or change a Reserve only utilizing the same criteria
as the Administrative Agent utilizes in imposing or changing
Reserves for other of its similar borrowers, and (c)
Availability Reserves imposed for Rent shall at no time exceed
the sum of (i) three months base rent for any locations in
Landlord's Lien States (except no such Reserve shall be
established for locations for which the Borrowers have
obtained a landlord's waiver reasonably acceptable in form and
substance to the Administrative Agent), plus (ii) subject to
the ---- provisions of Section 4-5(d) hereof, three months
base rent for any warehouses utilized by any Borrower (except
no such Reserve shall be established for warehouses for which
the Borrowers have obtained a warehouseman's waiver reasonably
acceptable in form and substance to the Administrative Agent),
plus (iii) an amount equal to all past due rent and warehouse
charges for ---- any of the Borrowers' locations, wherever
located .
"REVOLVING CREDIT": Is defined in Section 2-1.
"REVOLVING CREDIT CEILING": $700,000,000.00.
"REVOLVING CREDIT COMMITMENT": With respect to each Revolving Credit
Lender, that amount set forth on EXHIBIT 2-22, annexed hereto
(as such amounts may change in accordance with the provisions
of this Agreement).
"REVOLVING CREDIT COMMITMENT FEE": Is defined in Section 2-13.
"REVOLVING CREDIT COMMITMENT PERCENTAGE": With respect to each
Revolving Credit Lender, that percentage set forth on EXHIBIT
2-22, annexed hereto (as such percentages may change in
accordance with the provisions of this Agreement).
"REVOLVING CREDIT EARLY TERMINATION FEE": Is defined in Section 2-16.
"REVOLVING CREDIT LENDERS": Each Person who is or becomes a "Revolving
Credit Lender" in accordance with the provisions of this
Agreement.
"REVOLVING CREDIT LOANS": Loans made under the Revolving Credit, except
that where the term "Revolving Credit Loan" is used with
reference to available interest rates applicable to the loans
under the Revolving Credit, it refers to so much of the unpaid
principal balance of the Loan Account as bears the same rate
of interest for the same Interest Period. (See Section 2-11.
2-11(c)).
"REVOLVING CREDIT NOTE": Is defined in Section 2-9.
"SEC": The Securities and Exchange Commission.
"STANDBY L/CS": L/Cs issued pursuant to this Agreement, the drawing
under which does not require the delivery of bills of lading,
airway bills or other similar types of documents of title, or
which are customarily referred to as standby letters of
credit.
"STATED AMOUNT": The maximum amount for which an L/C may be honored.
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"SUBSIDIARY": Any corporation, association, partnership, limited
liability company, trust, or other business entity of which
the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes or controlling interests) of the
outstanding voting interests.
"SUPERMAJORITY LENDERS': Prior to termination of the Revolving Credit
Commitments, Revolving Credit Lenders (other than Delinquent
Revolving Credit Lenders) holding 66 2/3% or more of the
Revolving Credit Commitments (other than any Revolving Credit
Commitments held by Delinquent Revolving Credit Lenders).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 66 2/3% or more of the Liabilities
(other than any Liabilities held by Delinquent Revolving
Credit Lenders).
"SUPPORTING OBLIGATION": Has the meaning given that term in UCC 9'99
and also refers to a Letter-of-Credit Right or secondary
obligation which supports the payment or performance of an
Account, a Document, or an Instrument.
"SWINGLINE": The facility pursuant to which the SwingLine Lender may
advance Revolving Credit Loans aggregating up to the SwingLine
Loan Ceiling.
"SWINGLINE LENDER": FRFI.
"SWINGLINE LOAN CEILING": $40,000,000.00.
"SWINGLINE LOANS": Defined in Section 2-7.
"SYNDICATION AGENT": Is referred to in the Preamble.
"TERMINATION DATE": The earliest of (a) the Maturity Date; or (b) the
occurrence of any event described in Section 10-10, below; or
(c) the Administrative Agent's notice to the Lead Borrower
setting the Termination Date on account of the occurrence of
any Event of Default other than as described in Section 10-10,
below.
"TRANSFER": Wire transfer pursuant to the wire transfer system
maintained by the Board of Governors of the Federal Reserve
Board, or as otherwise may be agreed to from time to time by
the Administrative Agent making such Transfer and the subject
Revolving Credit Lender. Wire instructions may be changed in
the same manner that Notice Addresses may be changed (Section
17-1), except that no change of the wire instructions for
Transfers to any Revolving Credit Lender shall be effective
without the consent of the Administrative Agent.
"UCC": The Uniform Commercial Code as in effect from time to time in
Massachusetts.
"UCC9'99": The Uniform Commercial Code, Article 9, 1999 Official Text,
except that following the effectiveness, in Massachusetts, of
the revision of Article 9 of the Uniform Commercial Code
contemplated by UCC9'99 (with such nonuniform variations as
may be adopted as part of the enactment of that revision),
each reference to "UCC9'99" shall be to the UCC.
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"UNANIMOUS CONSENT": Prior to termination of the Revolving Credit
Commitments, Consent of Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 100% of the
Revolving Credit Commitments (other than Revolving Credit
Commitments held by a Delinquent Revolving Credit Lender).
After termination of the Revolving Credit Commitments,
Revolving Credit Lenders (other than Delinquent Revolving
Credit Lenders) holding 100% of the Liabilities (other than
any Liabilities held by Delinquent Revolving Credit Lenders)
"UNUSED FEE": A fee equal to 0.25% per annum of the average
difference, during the quarter just ended (or relevant period
with respect to the payment being made on the Termination
Date) between the Revolving Credit Ceiling and the sum of (a)
the aggregate of the unpaid principal balance of the Revolving
Credit Loans (including the SwingLine Loans) and (b) the
undrawn Stated Amount of L/Cs outstanding during the relevant
period.
ARTICLE 2 - THE REVOLVING CREDIT:
21 -. ESTABLISHMENT OF REVOLVING CREDIT
(a) The Revolving Credit Lenders hereby establish a revolving line of
credit (the "REVOLVING CREDIT") in the Borrowers' favor pursuant to which each
Revolving Credit Lender, subject to, and in accordance with, this Agreement,
acting through the Administrative Agent, shall make loans and advances and
otherwise provide financial accommodations to and for the account of the
Borrowers as provided herein.
(b) Loans, advances, and financial accommodations under the Revolving
Credit shall be made with reference to the Borrowing Base and shall be subject
to Availability. The Borrowing Base and Availability shall be determined by the
Administrative Agent by reference to Borrowing Base Certificates furnished as
provided in Section 5-4, below. Such determination shall take into account those
Reserves as may be applicable thereto. The initial Reserves as of the date of
this Agreement are the following:
(ii) Customer Credit Liabilities (an Availability
Reserve): An amount equal to 50% of the outstanding
Customer Credit Liabilities from time to time.
(iii) Shrinkage (an Inventory Reserve): An amount equal to
$20,000,000.00.
(iv) Damaged Goods (an Inventory Reserve): An amount equal
to 100% of the return to vendors Inventory as
reflected in the Borrowers' books and records.
(v) Rent (an Availability Reserve): An amount equal to
three months base rent for all Leases in Landlord's
Lien States (except no such Reserve shall be
established for locations for which the Borrowers
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have obtained a landlord's waiver reasonably
acceptable in form and substance to the
Administrative Agent), plus (ii) subject to the
provisions of Section 4-5(d) hereof, three ----
months base rent for any warehouses utilized by any
Borrower (except no such Reserve shall be established
for warehouses for which the Borrowers have obtained
a warehouseman's waiver reasonably acceptable in form
and substance to the Administrative Agent), plus
(iii) an amount equal to all past due rent and ----
warehouse charges for any of the Borrowers'
locations, wherever located.
(v) In-Transit Inventory Reserve (an Inventory Reserve):
An amount equal to 100% of the Inventory in transit
to any Borrower as reflected on the Borrowers'
perpetual inventory records.
(vi) Gateway Reserve (an Availability Reserve): Unless and
until the Tri-Party Agreement with Gateway Companies,
Inc. is delivered to the Administrative Agent in
accordance with the provisions of Section 3-3(a)
hereof, an amount equal to the aggregate cash sales
(excluding sales paid by credit cards and checks)
made by Gateway Companies, Inc. from the Borrowers'
stores during the immediately preceding calendar
month.
(a) The commitment of each Revolving Credit Lender to provide such
loans, advances, and financial accommodations is subject to Section 2-22.
(b) The proceeds of borrowings under the Revolving Credit shall be used
solely to refinance existing Indebtedness and synthetic leases of the Borrowers,
to fund stock repurchases, for the Borrowers' working capital and Capital
Expenditures, all solely to the extent permitted by this Agreement.
22 -ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS).
(a) No Revolving Credit Lender has any obligation to make any Revolving
Credit Loan, or otherwise to provide any credit to or for the benefit of the
Borrowers where the result of such Revolving Credit Loan or credit is an
OverLoan.
(b) The Revolving Credit Lenders' obligations, among themselves, are
subject to Section 12-3(a) (which relates to each Revolving Credit Lender's
making amounts available to the Administrative Agent) and to Section 15-3(a)
(which relates to Permissible OverLoans).
(c) The Revolving Credit Lenders' providing of an OverLoan on any one
occasion does not affect the obligations of each Borrower hereunder (including
each Borrower's obligation to immediately repay any amount which otherwise
constitutes an OverLoan) nor obligate the Revolving Credit Lenders to do so on
any other occasion.
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23 -RISKS OF VALUE OF COLLATERAL. The Administrative Agent's reference to
a given asset in connection with the making of Revolving Credit Loans and the
providing of financial accommodations under the Revolving Credit and/or the
monitoring of compliance with the provisions hereof shall not be deemed a
determination by the Administrative Agent or any Revolving Credit Lender
relative to the actual value of the asset in question. All risks concerning the
value of the Collateral are and remain upon the Borrowers. All Collateral
secures the prompt, punctual, and faithful performance of the Liabilities
whether or not relied upon by the Administrative Agent in connection with the
making of Revolving Credit Loans and the providing of financial accommodations
under the Revolving Credit.
24 -COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS OF
CREDIT. Subject to the provisions of this Agreement, the Revolving Credit
Lenders shall make a loan or advance under the Revolving Credit and the Issuer
shall issue an L/C for the account of any Borrower, in each instance if duly and
timely requested by the Lead Borrower as provided herein provided that:
(a) Availability will not be exceeded.
(b) No Default has occurred and is continuing.
25 -REVOLVING CREDIT LOAN REQUESTS.
(a) Requests for Revolving Credit Loans or for the continuance
or conversion of an interest rate applicable to a Revolving Credit Loan may be
requested by the Lead Borrower in such manner as may from time to time be
reasonably acceptable to the Administrative Agent.
(b) Subject to the provisions of this Agreement, the Lead
Borrower may request a Revolving Credit Loan and elect an interest rate and
Interest Period to be applicable to that Revolving Credit Loan by giving notice
to the Administrative Agent by no later than the following:
(ii) If such Revolving Credit Loan is to be or is to be
converted to a Base Margin Loan: By 1:00PM one (1)
Business Day before the date on which the subject
Revolving Credit Loan is to be made or is to be so
converted. Base Margin Loans requested by the Lead
Borrower, other than those resulting from the
conversion of a Eurodollar Loan, shall not be less
than $10,000.00.
(iii) If such Revolving Credit Loan is to be, or is to be
continued as, or converted to, a Eurodollar Loan: By
1:00PM three (3) Eurodollar Business Days before the
commencement of any new Interest Period or the end of
the then applicable Interest Period. Eurodollar Loans
and conversions to Eurodollar Loans shall each be not
less than $1,000,000 and in increments of $1,000,000
in excess of such minimum.
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(iv) Any Eurodollar Loan which matures while a Default exists
shall be converted, at the option of the
Administrative Agent, to a Base Margin Loan
notwithstanding any notice from the Lead Borrower
that such Loan is to be continued as a Eurodollar
Loan.
(a) Any request for a Revolving Credit Loan or for the continuance or
conversion of an interest rate applicable to a Revolving Credit Loan which is
made after the applicable deadline therefor, as set forth above, shall be deemed
to have been made at the opening of business on the then next Business Day or
Eurodollar Business Day, as applicable.
(b) The Lead Borrower may request that the Administrative Agent cause
the issuance by the Issuer of L/Cs for the account of the Borrowers as provided
in Section 2-17.
(c) The Administrative Agent may rely on any request for a Revolving
Credit Loan or other financial accommodation under the Revolving Credit which
the Administrative Agent, in good faith, believes to have been made by a Person
duly authorized to act on behalf of the Lead Borrower and may decline to make
any such requested loan or advance, or issuance, or to provide any such
financial accommodation pending the Administrative Agent's being furnished with
such documentation concerning that Person's authority to act as may be
satisfactory to the Administrative Agent.
(d) A request by the Lead Borrower for loan or advance, or other
financial accommodation under the Revolving Credit shall be irrevocable and
shall constitute certification by each Borrower that as of the date of such
request, each of the following is true and correct:
(v) Each representation which is made herein or in any of the
Loan Documents is then true and complete in all
material respects as of and as if made on the date of
such request (except for representations that relate
to an earlier date, in which case that representation
shall have been true on such earlier date).
(vi) No Default then exists.
(a) If, at any time or from time to time, any Default exists:
(vii) The Administrative Agent may, or at the request of the
Majority Lenders shall, suspend the Revolving Credit
immediately.
(viii) Neither the Administrative Agent nor any Revolving
Credit Lender shall be obligated, during such
suspension, to make any Revolving Credit Loans or to
provide any financial accommodation hereunder nor
shall the Administrative Agent, any Revolving Credit
Lender or the Issuer be obligated, during such
suspension, to issue, or cause to be issued, any L/C.
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(ix) The Administrative Agent may suspend the right of the
Lead Borrower to request any Eurodollar Loan or to
convert any Base Margin Loan to a Eurodollar Loan.
26 -MAKING OF REVOLVING CREDIT LOANS.
(a) A Revolving Credit Loan shall be made by the transfer of the
proceeds of such Revolving Credit Loan to the Operating Account or as otherwise
instructed by the Lead Borrower.
(b) A Revolving Credit Loan shall be deemed to have been made under the
Revolving Credit (and the Borrowers shall be indebted to the Administrative
Agent and the Revolving Credit Lenders for the amount thereof immediately) at
the following:
(ii) The Administrative Agent's initiation of the transfer of
the proceeds of such Revolving Credit Loan in
accordance with the Lead Borrower's instructions (if
such Revolving Credit Loan is of funds requested by
the Lead Borrower).
(iii) The charging of the amount of such Revolving Credit
Loan to the Loan Account (in all other
circumstances).
(a) There shall not be any recourse to or liability of the
Administrative Agent or any Revolving Credit Lender, on account of:
(iv) Any delay in the making of any Revolving Credit Loan
requested under the Revolving Credit.
(v) Any delay by any bank or other depository
institution in treating the proceeds of any such
Revolving Credit Loan as collected funds.
(vi) Any delay in the receipt, and/or any loss, of funds
which constitute a Revolving Credit Loan under the
Revolving Credit, the wire transfer of which was
properly initiated by the Administrative Agent in
accordance with wire instructions provided to the
Administrative Agent by the Lead Borrower.
27 -SWINGLINE LOANS.
(a) For ease of administration, Base Margin Loans may be made by the
SwingLine Lender (in the aggregate, the "SWINGLINE LOANS") in accordance with
the procedures set forth in this Agreement for the making of loans and advances
under the Revolving Credit, except that the Lead Borrower may request a
SwingLine Loan by giving notice to the Administrative Agent by no later than
1:00PM on the Business Day on which the subject SwingLine Loan is to be made.
The unpaid principal balance of the SwingLine Loans shall not at any one time be
in excess of the SwingLine Loan Ceiling.
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(b) The aggregate unpaid principal balance of SwingLine Loans shall
bear interest at the rate applicable to Base Margin Loans and shall be repayable
as a loan under the Revolving Credit.
(c) The Borrowers' obligation to repay SwingLine Loans shall be
evidenced by a Note in the form of EXHIBIT 2-7(c), annexed hereto, executed by
the Borrowers, and payable to the SwingLine Lender. Neither the original nor a
copy of that Note shall be required, however, to establish or prove any
Liability. Upon the SwingLine Lender's request and, if applicable, the delivery
of an appropriate lost instrument indemnity, the Borrowers shall execute a
replacement of any SwingLine Note which has been lost, mutilated, or destroyed
thereof and deliver such replacement to the SwingLine Lender.
(d) For all purposes of this Loan Agreement, the SwingLine Loans and
the Borrowers' obligations to the SwingLine Lender constitute Revolving Credit
Loans and are secured as "Liabilities".
(e) SwingLine Loans may be subject to periodic settlement with the
Revolving Credit Lenders as provided in this Agreement.
28 -THE LOAN ACCOUNT.
(a) An account ("LOAN ACCOUNT") shall be opened on the books of the
Administrative Agent in which a record shall be kept of all Revolving Credit
Loans made and L/Cs issued under the Revolving Credit.
(b) The Administrative Agent shall also keep a record (either in the
Loan Account or elsewhere, as the Administrative Agent may from time to time
elect) of all interest, fees, service charges, costs, expenses, and other debits
owed to the Administrative Agent and each Revolving Credit Lender on account of
the Liabilities and of all credits against such amounts so owed.
(c) All credits against the Liabilities shall be conditional upon final
payment to the Administrative Agent for the account of each Revolving Credit
Lender of the items giving rise to such credits. The amount of any item credited
against the Liabilities which is charged back against the Administrative Agent
or any Revolving Credit Lender for any reason or is not so paid shall be a
Liability and shall be added to the Loan Account, whether or not the item so
charged back or not so paid is returned.
(d) Except as otherwise provided herein, all fees, service charges,
costs, and expenses for which any Borrower is obligated hereunder are payable on
demand. In the determination of Availability, the Administrative Agent may deem
fees, service charges, accrued interest, and other payments which will be due
and payable between the date of such determination and the first day of the then
next succeeding month as having been advanced under the Revolving Credit whether
or not such amounts are then due and payable.
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(e) The Administrative Agent, without the request of the Lead Borrower,
may advance under the Revolving Credit any interest, fee, service charge, or
other payment to which the Administrative Agent or any Revolving Credit Lender
is entitled from any Borrower pursuant hereto and may charge the same to the
Loan Account notwithstanding that such amount so advanced may result in the
Borrowing Base being exceeded. Such action on the part of the Administrative
Agent shall not constitute a waiver of the Administrative Agent's rights and
each Borrower's obligations under Section 2-10(b). Any amount which is added to
the principal balance of the Loan Account as provided in this Section 2-8(e)
shall bear interest at the interest rate then and thereafter applicable to Base
Margin Loans.
(f) Any statement rendered by the Administrative Agent or any Revolving
Credit Lender to the Lead Borrower concerning the Liabilities shall be
considered correct and accepted by each Borrower and shall be conclusively
binding upon each Borrower unless the Lead Borrower provides the Administrative
Agent with written objection thereto within one hundred twenty (120) days from
the mailing of such statement, which written objection shall indicate, with
particularity, the reason for such objection. The Loan Account and the
Administrative Agent's books and records concerning the loan arrangement
contemplated herein and the Liabilities shall be prima facie evidence and proof
of the items described therein.
29 -THE REVOLVING CREDIT NOTES. The Borrowers' obligation to repay loans
and advances under the Revolving Credit, with interest as provided herein,
shall be evidenced by Notes (each, a "REVOLVING CREDIT NOTE") in the form of
EXHIBIT 2-9, annexed hereto, executed by each Borrower, one payable to each
Revolving Credit Lender. Neither the original nor a copy of any Revolving
Credit Note shall be required, however, to establish or prove any Liability.
Upon a Revolving Lender's request and, if applicable, the delivery of an
appropriate lost instrument indemnity, each Borrower shall execute a
replacement thereof and deliver such replacement to the Administrative Agent in
the event that any Revolving Credit Note is ever lost, mutilated, or destroyed.
210 -PAYMENT OF THE LOAN ACCOUNT.
(a) The Borrowers may repay all or any portion of the principal balance
of the Loan Account from time to time until the Termination Date.
(b) The Borrowers, without notice or demand from the Administrative
Agent or any Revolving Credit Lender, shall pay the Administrative Agent that
amount, from time to time, which is necessary so that there is no OverLoan
outstanding.
(c) During the continuance of a Cash Control Event, the Borrowers shall
repay the Revolving Credit
(ii) in an amount equal to the proceeds realized from
the sale or other disposition of, or realization
upon, any Collateral;
(iii) in an amount equal to the proceeds realized
from any Realty Sale, Capital Event and/or
condemnation and casualty insurance
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proceeds received by any Borrower to the extent that
such proceeds are not reinvested in replacement
assets within 180 days after the date of receipt of
such proceeds; and
(iv) in accordance with the provisions of Article 7 hereof.
All amounts prepaid under this Section 2-10(c) may be reborrowed under the
Revolving Credit, subject to and in accordance with, the terms of this
Agreement.
(a) The Borrowers shall repay the then entire unpaid balance of the
Loan Account and all other Liabilities on the Termination Date.
(b) No payment of Eurodollar Loans shall be permitted hereunder other
than on the last day of an Interest Period applicable thereto, unless the
Borrowers simultaneously reimburses the Revolving Credit Lenders for all amounts
described in Section 2-10(f) below associated therewith. In order to avoid
payment of the amounts described in Section 2-10(f) below, as long as no Event
of Default has occurred and is continuing, at the request of the Lead Borrower,
the Administrative Agent shall hold all amounts required to be applied to
Eurodollar Loans in a non-interest bearing cash collateral account and will
apply such funds to the applicable Eurodollar Loans at the end of the then
pending Interest Period therefor (provided that the foregoing shall in no way
limit or restrict the Administrative Agent's rights upon the subsequent
occurrence of an Event of Default).
(c) The Borrowers shall indemnify the Administrative Agent and each
Revolving Credit Lender and hold the Administrative Agent and each Revolving
Credit Lender harmless from and against any loss, cost or expense (including
loss of anticipated profits and amounts payable by the Administrative Agent or
such Revolving Credit Lender on account of "breakage fees" (so-called)) which
the Administrative Agent or such Revolving Credit Lender may sustain or incur
(including, without limitation, by virtue of acceleration after the occurrence
of any Event of Default) as a consequence of the following:
(v) Default by any Borrower in payment of the principal
amount of or any interest on any Eurodollar Loan as
and when due and payable, including any such loss or
expense arising from interest or fees payable by such
Revolving Credit Lender in order to maintain its
Eurodollar Loans.
(vi) Default by any Borrower in making a borrowing or
conversion after the Lead Borrower has given (or is
deemed to have given) a request for a Revolving
Credit Loan or a request to convert a Revolving
Credit Loan from one applicable interest rate to
another.
(vii) The making of any payment on a Eurodollar Loan or the
making of any conversion of any such Loan to a Base
Margin Loan on a day that is not the last day of the
applicable Interest Period with respect thereto.
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211 -INTEREST ON REVOLVING CREDIT LOANS.
(a) Each Revolving Credit Loan shall bear interest at the Base Margin
Rate unless timely notice is given (as provided in Section 2-5) that the subject
Revolving Credit Loan (or a portion thereof) is, or is to be converted to, a
Eurodollar Loan.
(b) Each Revolving Credit Loan which consists of a Eurodollar Loan
shall bear interest at the applicable Eurodollar Rate.
(c) Subject to, and in accordance with, the provisions of this
Agreement, the Lead Borrower may cause all or a part of the unpaid principal
balance of the Loan Account to bear interest at the Base Margin Rate or the
Eurodollar Rate as specified from time to time by the Lead Borrower.
(d) The Lead Borrower shall not select, renew, or convert any interest
rate for a Revolving Credit Loan such that, in addition to interest at the Base
Margin Rate, there are more than eight (8) Eurodollar Rates applicable to the
Revolving Credit Loans at any one time.
(e) The Borrowers shall pay accrued and unpaid interest on each
Revolving Credit Loan in arrears as follows:
(ii) On the applicable Interest Payment Date for that
Revolving Credit Loan.
(iii) On the Termination Date and on the End Date.
(iv) During the existence of any Event of Default, with such
frequency as may be determined by the Administrative
Agent.
(a) During the existence of any Event of Default (and whether or not
the Administrative Agent exercises the Administrative Agent's rights on account
thereof), all Revolving Credit Loans shall bear interest, at the option of the
Administrative Agent or at the instruction of the Majority Lenders at a rate
which is the aggregate of the rate applicable to Base Margin Loans plus two
percent (2%) per annum.
(b) Interest shall be calculated (i) with respect to Base Margin Loans,
on the basis of a 365 day year and for actual days elapsed, and (ii) with
respect to Eurodollar Loans, on the basis of a 360 day year and for actual days
elapsed. L/C Fees, the Line Fee and Unused Fees shall be calculated on the basis
of a 365 day year and for actual days elapsed.
212 - VOLUNTARY REDUCTION OF COMMITMENT AND REVOLVING CREDIT CEILING.
The Lead Borrower may reduce, or terminate, the Revolving Credit Commitments and
the Revolving Credit Ceiling, in whole or in part from time to time, by
furnishing three (3) Business Days' written notice to the Administrative Agent,
whereupon the Revolving Credit Commitments of the Revolving Credit Lenders shall
be reduced PRO RATA in accordance with their respective Revolving Credit
Commitment Percentages. Upon the effective date of any such reduction, (a)
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the Borrowers shall pay to the Administrative Agent for the benefit of the
Revolving Credit Lenders a pro rata portion of any Revolving Credit Early
Termination Fee as a result of such reduction or termination (based upon the
amount of the reduction to the then Revolving Credit Commitments), (b) the
Borrowers shall pay to the Administrative Agent for the benefit of the Revolving
Credit Lenders the accrued Unused Fee as of the date of such reduction or
termination, and (c) the Borrowers shall pay to the Administrative Agent for the
benefit of the Revolving Credit Lenders any amounts required under Section
2-10(b) and Section 2-10(f) hereof. No reduction or termination of the Revolving
Credit Commitments or the Revolving Credit Ceiling may be reinstated.
213 -REVOLVING CREDIT COMMITMENT FEE. In consideration of the
commitment to make loans and advances to the Borrowers under the Revolving
Credit, and to maintain sufficient funds available for such purpose, there has
been earned and the Borrowers shall pay the "REVOLVING CREDIT COMMITMENT FEE"
(so referred to herein) in the amount and payable as provided in the Fee Letter.
214 -ADMINISTRATIVE AGENT'S FEE. In addition to any other fee or
expense to be paid by the Borrowers on account of the Revolving Credit, the
Borrowers shall pay the Administrative Agent the " ADMINISTRATIVE AGENT'S Fee"
at the times and in the amounts as set forth in the Fee Letter.
215 -UNUSED FEE. In addition to any other fee to be paid by the
Borrowers on account of the Revolving Credit, each Revolving Credit Lender shall
be paid the Line Fee at the times and in the manner set forth below. The
Borrowers shall pay to the Administrative Agent for the account of the Revolving
Credit Lenders, the Unused Fee. If the Unused Fee actually paid by the Borrowers
is insufficient to pay an amount equal to the Line Fee to the Revolving Credit
Lenders, the deficiency shall be paid to the Revolving Credit Lenders by the
SwingLine Lender from its own funds (and the Borrowers shall have no liability
with respect thereto). The Administrative Agent shall pay the Line Fee (and any
amounts payable by the SwingLine Lender hereunder) to the Revolving Credit
Lenders based upon their pro rata share of an amount equal to the aggregate Line
Fee due to all Revolving Credit Lenders; PROVIDED THAT for purposes of
calculating the pro rata share of any Person which is both the SwingLine Lender
and a Revolving Credit Lender, such Person's share shall be equal to the
difference between (i) the sum of such Person's Revolving Credit Commitment, and
(ii) the sum of (A) such Person's Revolving Credit Commitment Percentage of the
principal amount of the Revolving Loans then outstanding (including the
principal amount of SwingLine Loans then outstanding), and (B) such Person's
Revolving Credit Commitment Percentage of the then undrawn Stated Amount of
outstanding L/Cs. The Unused Fee shall be paid in arrears, on the first day of
each quarter after the execution of this Agreement and on the Termination Date.
216 -EARLY TERMINATION FEE.
In the event that the Termination Date occurs, for any reason, prior
to the second anniversary hereof (other than by virtue of the Borrowers'
refinancing of the Liabilities with FRFI or any of its Affiliates), the
Borrowers shall pay to the Administrative Agent , for the benefit of the
Revolving Credit Lenders, a "REVOLVING CREDIT EARLY TERMINATION FEE" (so
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referred to herein) in an amount equal to (a) one-half of one percent (0.50%) of
the Revolving Credit Commitments in effect on the date of this Agreement, if the
Termination Date occurs before November 30, 2001, or (b) one quarter of one
percent (0.25%) of the Revolving Credit Commitments in effect on the date of
this Agreement, if the Termination Date occurs on or after November 30, 2001 and
on or before November 30, 2002. In addition, in the event that the Revolving
Commitments are terminated or reduced prior to the second anniversary hereof
pursuant to Section 2-12 hereof, the Borrower shall pay to the Administrative
Agent , for the benefit of the Revolving Credit Lenders, a pro rata portion of
the Revolving Credit Early Termination Fee based on the amount of the
termination or reduction.
217 -PROCEDURES FOR ISSUANCE OF L/CS.
(a) The Lead Borrower may request that the Administrative Agent
cause the issuance by the Issuer of L/Cs for the account of any Borrower. Each
such request shall be in such manner as may from time to time be acceptable to
the Administrative Agent.
(b) The Issuer shall issue any L/C so requested by the Lead
Borrower, provided that, at the time that the request is made, the Revolving
Credit has not been suspended as provided in Section 2-5(g) and if so issued:
(ii) The aggregate Stated Amount of all L/Cs then
outstanding, does not exceed Two Hundred Million Dollars
and No Cents ($200,000,000.00).
(iii) The expiry of the L/C is not later than the
earlier of thirty (30) days prior to the Maturity Date
or the following:
(B) Standby's: One (1) year from initial issuance.
(C) Documentary's: One hundred eighty (180) days from
issuance.
(i) An OverLoan will not result from the issuance of the
subject L/C.
(a) Each Borrower shall execute such documentation to apply for and
support the issuance of an L/C as may be required by the Issuer.
(b) There shall not be any recourse to, nor liability of, the
Administrative Agent or any Revolving Credit Lender on account of
(ii) Any delay or refusal by an Issuer to issue an L/C;
(iii) Any action or inaction of an Issuer on account of
or in respect to, any L/C.
(a) The Borrowers shall reimburse the Issuer for the amount of any
honoring of a drawing under an L/C on the same day on which such honoring takes
place. The Administrative Agent, without the request of any Borrower, may
advance under the Revolving
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Credit (and charge to the Loan Account) the amount of any honoring of any L/C
and other amount for which any Borrower, the Issuer, or the Revolving Credit
Lenders become obligated on account of, or in respect to, any L/C. Such advance
shall be made whether or not any Default exists or such advance would result in
an OverLoan. Such action shall not constitute a waiver of the Administrative
Agent's rights under Section 2-10(b) hereof.
218 -FEES FOR L/CS.
(a) The Borrowers shall pay to the Administrative Agent (for the
benefit of the Revolving Credit Lenders) a fee, on account of L/Cs, the issuance
of which had been procured by the Administrative Agent, quarterly in arrears,
and on the Termination Date and on the End Date, equal to the following :
(ii) With respect to Standby L/Cs issued in connection
with the synthetic leases described on EXHIBIT 2-18: At
a rate per annum equal to 0.375% less than the
Applicable Margin for Eurodollar Loans at the time of
calculation of such fees multiplied by the weighted
average Stated Amount of all such Standby L/Cs
outstanding during the period in respect of which such
fee is being paid; and
(iii) With respect to all other Standby L/Cs: At a rate
per annum equal to 0.125% less than the Applicable
Margin for Eurodollar Loans at the time of calculation
of such fees multiplied by the weighted average Stated
Amount of all such Standby L/Cs outstanding during the
period in respect of which such fee is being paid; and
(iii) With respect to all Documentary L/Cs: At a rate
per annum equal to 0.50% less than the Applicable Margin
for Eurodollar Loans at the time of calculation of such
fees multiplied by the weighted average Stated Amount of
all such Documentary L/Cs outstanding during the period
in respect of which such fee is being paid;
provided that, during the existence of any Event of Default, such fees shall be
increased by two percent (2%) per annum.
(a) In addition to the fees to be paid as provided in Subsection
2-18(a), above, the Borrowers shall pay to the Administrative Agent (or to the
Issuer, if so requested by Administrative Agent), on demand, all issuance,
processing, negotiation, amendment, and administrative fees and other amounts
charged by the Issuer on account of, or in respect to, any L/C.
(b) If any change in Applicable Law shall either:
(iv) impose, modify or deem applicable any reserve,
special deposit or similar requirements against letters
of credit heretofore or hereafter
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issued by any Issuer or with respect to which any
Revolving Credit Lender or any Issuer has an obligation
to lend to fund drawings under any L/C; or
(v) impose on any Issuer any other condition or
requirements relating to any such letters of credit;
and the result of any event referred to in Section 2-18(c)(i) or 2-18(c)(ii),
above, shall be to increase the cost to any Revolving Credit Lender or to any
Issuer of issuing or maintaining any L/C (which increase in cost shall be the
result of such Issuer's reasonable allocation among that Revolving Credit
Lender's or Issuer's letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Lead Borrower of a
certificate of an officer of the subject Revolving Credit Lender or the subject
Issuer describing such change in law, executive order, regulation, directive, or
interpretation thereof, its effect on such Revolving Credit Lender or such
Issuer, and the basis for determining such increased costs and their allocation,
the Borrowers shall, within thirty (30) days after demand therefor, pay to the
Administrative Agent, from time to time as specified by the Administrative
Agent, such amounts as shall be sufficient to compensate the subject Revolving
Credit Lender or the subject Issuer for such increased cost. Any Revolving
Credit Lender's or any Issuer's determination of costs incurred under Section
2-18(c)(i) or 2-18(c)(ii), above, and the allocation, if any, of such costs
among the Borrowers and other letter of credit customers of such Revolving
Credit Lender or such Issuer, if done in good faith and made on an equitable
basis and in accordance with such officer's certificate, shall be conclusive and
binding on the Borrowers.
219 -CONCERNING L/CS.
(a) None of the Issuer, the Issuer's correspondents, any Revolving
Credit Lender, the Administrative Agent, or any advising, negotiating, or paying
bank with respect to any L/C shall be responsible in any way for:
(ii) The performance by any beneficiary under any L/C
of that beneficiary's obligations to any Borrower.
(iii) The form, sufficiency, correctness,
genuineness, authority of any person signing;
falsification; or the legal effect of; any documents
called for under any L/C if (with respect to the
foregoing) such documents on their face appear to be
in order.
(a) The Issuer may honor, as complying with the terms of any L/C and
of any drawing thereunder, any drafts or other documents otherwise in order, but
signed or issued by an administrator, executor, conservator, trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, or other legal representative of the party authorized
under such L/C to draw or issue such drafts or other documents.
(b) Unless otherwise agreed to, in the particular instance, each
Borrower hereby authorizes any Issuer to:
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(iv) Select an advising bank, if any.
(v) Select a paying bank, if any.
(vi) Select a negotiating bank.
(a) All directions, correspondence, and funds transfers relating to any
L/C are at the risk of the Borrowers. The Issuer shall have discharged the
Issuer's obligations under any L/C which, or the drawing under which, includes
payment instructions, by the initiation of the method of payment called for in,
and in accordance with, such instructions (or by any other commercially
reasonable and comparable method). None of the Administrative Agent, any
Revolving Credit Lender, or the Issuer shall have any responsibility for any
inaccuracy, interruption, error, or delay in transmission or delivery by post,
telegraph or cable, or for any inaccuracy of translation.
(b) The Administrative Agent's, each Revolving Credit Lender's, and the
Issuer's rights, powers, privileges and immunities specified in or arising under
this Agreement are in addition to any heretofore or at any time hereafter
otherwise created or arising, whether by statute or rule of law or contract.
(c) Except to the extent otherwise expressly provided hereunder or
agreed to in writing by the Issuer and the Lead Borrower, documentary L/Cs will
be governed by the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce, Publication No. 500, and standby L/Cs will be
governed by International Standby Practices ISP98 (adopted by the International
Chamber of Commerce on April 6, 1998) and any respective subsequent revisions
thereof.
(d) The obligations of the Borrowers under this Agreement with respect
to L/Cs are absolute, unconditional, and irrevocable and shall be performed
strictly in accordance with the terms hereof under all circumstances, whatsoever
including, without limitation, the following:
(vii) Any lack of validity or enforceability or restriction,
restraint, or stay in the enforcement of this Agreement, any
L/C, or any other agreement or instrument relating thereto.
(viii) Any Borrower's consent to any amendment or waiver of,
or consent to the departure from, any L/C.
(ix) The existence of any claim, set-off, defense, or other
right which any Borrower may have at any time against the
beneficiary of any L/C.
(x) Absent the gross negligence or willful misconduct of the
Issuer, any honoring of a drawing under any L/C, which drawing
possibly could have been dishonored due to a non-material
technicality based upon a strict construction of the terms of
the L/C.
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220 -CHANGED CIRCUMSTANCES.
(a) The Administrative Agent may advise the Lead Borrower that the
Administrative Agent has made the good faith determination (which determination
shall be final and conclusive) of any of the following:
(ii) Adequate and fair means do not exist for ascertaining the
rate for Eurodollar Loans.
(iii) The continuation of or conversion of any Revolving
Credit Loan to a Eurodollar Loan has been made impracticable
or unlawful by the occurrence of a contingency that materially
and adversely affects the applicable market or the compliance
by the Administrative Agent or any Revolving Credit Lender in
good faith with any Applicable Law.
(iv) The indices on which the interest rates for Eurodollar
Loans are based shall no longer represent the effective cost
to the Administrative Agent or any Revolving Credit Lender for
U.S. dollar deposits in the interbank market for deposits in
which it regularly participates.
(a) In the event that the Administrative Agent advises the Lead
Borrower of an occurrence described in Section 2-20(a), then, until the
Administrative Agent notifies the Lead Borrower that the circumstances giving
rise to such notice no longer apply:
(v) The obligation of the Administrative Agent or each
Revolving Credit Lender to make loans of the type affected by
such changed circumstances or to permit the Lead Borrower to
select the affected interest rate as otherwise applicable to
any Revolving Credit Loans shall be suspended.
(vi) Any notice which the Lead Borrower had given the
Administrative Agent with respect to any Eurodollar Loan, the
time for action with respect to which has not occurred prior
to the Administrative Agent's having given notice pursuant to
Section 2-20(a), shall be deemed at the option of the
Administrative Agent to not having been given.
221 -DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably designates and appoints the Lead
Borrower as that Borrower's agent to obtain Revolving Credit Loans and L/Cs
under the Revolving Credit, the proceeds of which shall be available to each
Borrower for those uses as those set forth in Section 2-1(d). As the disclosed
principal for its agent, each Borrower shall be obligated to the Administrative
Agent and each Revolving Credit Lender on account of
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Revolving Credit Loans so made and L/Cs so issued under the Revolving Credit as
if made directly by the Revolving Credit Lenders to that Borrower,
notwithstanding the manner by which such Revolving Credit Loans and L/Cs are
recorded on the books and records of the Lead Borrower and of any Borrower.
(b) Each Borrower recognizes that credit available to it under the
Revolving Credit is in excess of and on better terms than it otherwise could
obtain on and for its own account and that one of the reasons therefor is its
joining in the credit facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes and agrees to discharge all
Liabilities of all other Borrowers as if the Borrower so assuming were each
other Borrower.
(c) The Lead Borrower shall act as a conduit for each Borrower
(including itself, as a "Borrower") on whose behalf the Lead Borrower has
requested a Revolving Credit Loan. (d) The proceeds of each loan and advance
provided under the Revolving Credit which is requested by the Lead Borrower
shall be deposited into the Operating Account or as otherwise indicated by the
Lead Borrower. The Lead Borrower shall cause the transfer of the proceeds
thereof to the (those) Borrower(s) on whose behalf such loan and advance was
obtained. Neither the Administrative Agent nor any Revolving Credit Lender shall
have any obligation to see to the application of such proceeds.
(e) If, for any reason, and at any time during the term of this
Agreement,
(i) any Borrower, including the Lead Borrower, as agent for
the Borrowers, shall be unable to, or prohibited from carrying out the
terms and conditions of this Agreement (as determined by the
Administrative Agent in the Administrative Agent's sole and absolute
discretion); or
(ii) the Administrative Agent deems it inexpedient (in the
Administrative Agent's sole and absolute discretion) to continue making
Revolving Credit Loans and issue L/Cs to or for the account of any
particular Borrower, or to channel such Revolving Credit Loans and L/Cs
through the Lead Borrower,
then the Revolving Credit Lenders may make Revolving Credit Loans directly to,
and issue L/Cs directly for the account of such of the Borrowers as the
Administrative Agent determines to be expedient, which loans or advances may be
made without regard to the procedures otherwise included herein.
(f) In the event that the Administrative Agent determines to forgo the
procedures included herein pursuant to which Revolving Credit Loans and L/Cs are
to be channeled through the Lead Borrower, then the Administrative Agent may
designate one or more of the Borrowers to fulfill the financial and other
reporting requirements otherwise imposed herein upon the Lead Borrower.
(g) Each of the Borrowers shall remain liable to the Administrative
Agent and the Revolving Credit Lenders for the payment and performance of all
Liabilities (which payment
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and performance shall continue to be secured by all Collateral granted by each
of the Borrowers) notwithstanding any determination by the Administrative Agent
to cease making Revolving Credit Loans or L/Cs to or for the benefit of any
Borrower.
(h) The authority of the Lead Borrower to request loans on behalf of,
and to bind, the Borrowers, shall continue unless and until the Administrative
Agent acts as provided in Section 2-21(e), above, or the Administrative Agent
actually receives
(i) written notice of: (i) the termination of such authority, and (ii)
the subsequent appointment of a successor Lead Borrower, which notice is signed
by the respective Presidents of each Borrower (other than the President of the
Lead Borrower being replaced) then eligible for borrowing under this Agreement;
and
(j) written notice from such successive Lead Borrower (i) accepting
such appointment; (ii) acknowledging that such removal and appointment has been
effected by the respective Presidents of such Borrowers eligible for borrowing
under this Agreement; and (iii) acknowledging that from and after the date of
such appointment, the newly appointed Lead Borrower shall be bound by the terms
hereof, and that as used herein, the term "Lead Borrower" shall mean and include
the newly appointed Lead Borrower.
222 -LENDERS' COMMITMENTS
(a) Subject to Section 16-1 (which provides for assignments and
assumptions of commitments), each Revolving Credit Lender's "REVOLVING CREDIT
COMMITMENT PERCENTAGE", and "REVOLVING CREDIT COMMITMENT" (respectively so
referred to herein) is set forth on EXHIBIT 2-22, annexed hereto.
(b) The obligations of each Revolving Credit Lender are several and not
joint. No Revolving Credit Lender shall have any obligation to make any loan or
advance under the Revolving Credit in excess of the lesser of the following:
(ii) That Revolving Credit Lender's Revolving Credit
Commitment Percentage of the subject loan or advance or of
Availability.
(iii) that Revolving Credit Lender's Revolving Credit
Commitment.
(a) No Revolving Credit Lender shall have any liability to the
Borrowers on account of the failure of any other Revolving Credit Lender to
provide any loan or advance under the Revolving Credit nor any obligation to
make up any shortfall which may be created by such failure.
(b) The Revolving Credit Commitments, Revolving Credit Commitment
Percentages, and identities of the Revolving Credit Lenders may be changed, from
time to time by the reallocation or assignment of Revolving Credit Commitments
and Revolving Credit Commitment Percentages amongst the Revolving Credit Lenders
or with other Persons who determine to become "Revolving Credit Lenders" in
accordance with the provisions of Article 16
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hereof, provided, however FRFI shall at all times prior to the occurrence of an
Event of Default retain at least ten percent (10%) of the Revolving Credit
Commitments outstanding from time to time.
(c) Upon written notice given the Lead Borrower from time to time by
the Administrative Agent, of any assignment or allocation referenced in Section
2-22(d):
(iv) Each Borrower shall execute one or more replacement
Revolving Credit Notes to reflect such changed Revolving
Credit Commitments, Revolving Credit Commitment Percentages,
and identities and shall deliver such replacement Revolving
Credit Notes to the Administrative Agent (which promptly
thereafter shall deliver to the Lead Borrower the Revolving
Credit Notes so replaced) provided however, in the event that
a Revolving Credit Note is to be exchanged following its
acceleration or the entry of an order for relief under the
Bankruptcy Code with respect to any Borrower, the
Administrative Agent, in lieu of causing the Borrowers to
execute one or more new Revolving Credit Notes, may issue the
Administrative Agent's Certificate confirming the resulting
Revolving Credit Commitments and Revolving Credit Commitment
Percentages.
(v) Such change shall be effective from the effective date
specified in such written notice and any Person added as a
Revolving Credit Lender shall have all rights and privileges
of a Revolving Credit Lender hereunder thereafter as if such
Person had been a signatory to this Agreement and any other
Loan Document to which a Revolving Credit Lender is a
signatory and any Person removed as a Revolving Credit Lender
shall be relieved of any obligations or responsibilities of a
Revolving Credit Lender hereunder thereafter.
223 - REPLACEMENT OF REVOLVING CREDIT LENDER
(a) If any Revolving Credit Lender requests compensation under Sections
2-18(c) or 19-8, then such Revolving Credit Lender shall use its reasonable best
efforts to designate a different lending office for funding or booking L/Cs
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Revolving Credit
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Sections 2-18(c) or 19-8, in the future and (ii) would not
subject such Revolving Credit Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Revolving Credit Lender. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Revolving Credit Lender in connection with any such designation or assignment.
(b) If any Revolving Credit Lender requests compensation under Sections
2-18(c) or 19-8, then the Borrowers may, at their sole expense and effort, upon
notice to such
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Revolving Credit Lender and the Administrative Agent, require such Revolving
Credit Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Article 16), all its interests, rights
and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Revolving Credit Lender, if a
Revolving Credit Lender accepts such assignment), PROVIDED that (i) if such
assignee is not an existing Revolving Credit Lender, the Borrowers shall have
received the prior written consent of the Administrative Agent, the Issuers and
SwingLine Lender, which consent shall not unreasonably be delayed or withheld,
(ii) such Revolving Credit Lender shall have received payment of an amount equal
to the outstanding principal of its Revolving Credit Loans and participations in
unreimbursed drawings under L/Cs and SwingLine Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrowers (in the case of all other amounts) and (iii) such assignment will
result in a reduction in such compensation, payments or costs. A Revolving
Credit Lender shall not be required to make any such assignment and delegation
if, prior thereto, as a result of a waiver by such Revolving Credit Lender or
otherwise, the circumstances entitling the Borrowers to require such assignment
and delegation cease to apply.
ARTICLE 3 - CONDITIONS PRECEDENT:
As a condition to the effectiveness of this Agreement, the
establishment of the Revolving Credit, and the making of the first loan and
issuance of the first L/Cs under the Revolving Credit, each of the documents
respectively described in Sections 3-1 through and including 3-5, (each in form
and substance satisfactory to the Administrative Agent) shall have been
delivered to the Administrative Agent, and the conditions respectively described
in Sections 3-6 through and including 3-18, shall have been satisfied:
31 -CORPORATE DUE DILIGENCE.
(a) Certificates of corporate good standing for each Borrower,
respectively issued by the Secretary of State for the state in which that
Borrower is incorporated.
(b) Certificates of due qualification, in good standing, issued by the
Secretary(ies) of State of each State in which the nature of the business
conducted by OfficeMax, Inc., or assets owned by OfficeMax, Inc. could require
such qualification, PROVIDED THAT the failure of OfficeMax, Inc. to furnish such
certificates for the states listed on EXHIBIT 3-1 shall not delay the
effectiveness of this Agreement; any such certificates not delivered by the
Closing Date shall be delivered as soon as reasonably practicable after the
Closing Date.
(c) Certificates of each Borrower's Secretary of the due adoption,
continued effectiveness, and setting forth the texts of, each corporate
resolution adopted in connection with the establishment of the loan arrangement
contemplated by the Loan Documents and attesting to the true signatures of each
Person authorized as a signatory to any of the Loan Documents.
32 -OPINION. An opinion of counsel to the Borrowers in form and
substance reasonably satisfactory to the Administrative Agent.
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33 -TRI-PARTY AGREEMENTS. An agreement in form and substance reasonably
satisfactory to the Administrative Agent with (a) Gateway Companies, Inc. with
respect to the relative rights of the Administrative Agent, the Borrowers and
Gateway Companies, Inc. in the Administrative Agent's administration of the
Liabilities and exercise of its rights and remedies and the conduct of Gateway
Companies Inc.'s business from the premises of the Borrowers, and (b) Huntington
National Bank with respect to the rights of the Administrative Agent and such
bank in and to the Borrowers' assets, and (c) OMX, Inc. furnishing the
Administrative Agent with rights to use the Lead Borrower's distribution
facility in Las Vegas, Nevada and certain trademarks owned by said OMX, Inc.
during the existence of an Event of Default.
34 -ADDITIONAL DOCUMENTS. Such additional instruments and documents as
the Administrative Agent or its counsel may reasonably require or request
including, without limitation, the documents described on EXHIBIT 3-4 hereto.
35 -OFFICERS' CERTIFICATES. Certificates executed by the President and
the Chief Financial Officer of the Lead Borrower and stating that the
representations and warranties made by the Borrowers to the Administrative Agent
and the Revolving Credit Lenders in the Loan Documents are true and complete in
all material respects as of the date of such Certificate, and that no event has
occurred which is or which, solely with the giving of notice or passage of time
(or both) would be an Event of Default.
36 -DUE DILIGENCE. The Administrative Agent shall have completed its
due diligence to its reasonable satisfaction. Without limiting the foregoing,
the Administrative Agent shall have received commercial finance examinations,
appraisals of the Borrowers' inventory, and such other information (financial or
otherwise) as the Administrative Agent may reasonably request, and such
examinations, appraisals and information shall be reasonably satisfactory to the
Administrative Agent.
37 -REPRESENTATIONS AND WARRANTIES. Each of the representations made by
or on behalf of each Borrower in this Agreement or in any of the other Loan
Documents or in any other report, statement, document, or paper provided by or
on behalf of each Borrower shall be true and complete in all material respects
as of the date as of which such representation or warranty was made.
38 -ALL FEES AND EXPENSES PAID. All fees due at or immediately after
the first funding under the Revolving Credit and all costs and expenses incurred
by the Administrative Agent in connection with the establishment of the credit
facility contemplated hereby (including the fees and expenses of counsel to the
Administrative Agent) shall have been paid in full.
39 -NO DEFAULT. No Default shall then exist.
310 -NO ADVERSE CHANGE. No event shall have occurred or failed to
occur, which occurrence or failure has had or could reasonably be expected to
have a materially adverse effect upon any Borrower's financial condition,
operations, assets or income when compared with such at the Fiscal quarter
ending on or about July 31, 2000.
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311 - PERFECTION OF ENCUMBRANCES. The Administrative Agent shall have
received all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create or perfect
the first priority Encumbrances intended to be created under the Loan Documents
and all such documents and instruments shall have been so filed, registered or
recorded to the satisfaction of the Administrative Agent.
312 - SATISFACTION OF EXISTING INDEBTEDNESS. The Administrative Agent
shall have received a payoff letter from The Bank of New York, satisfactory in
form and substance to the Administrative Agent, together with releases of all
Encumbrances, if any, held by such Person on the assets of the Borrowers.
Contemporaneously with the first advance under the Revolving Credit, the
Borrowers shall pay all indebtedness reflected in such payoff letter in full and
shall furnish a "back to back" L/C under the Revolving Credit to support any
outstanding letters of credit issued by First Union National Bank reflected in
such payoff letter.
313 -CONSENTS AND APPROVALS. All necessary consents and approvals to
the transactions contemplated hereby shall have been obtained and shall be
reasonably satisfactory to the Administrative Agent.
314 -NO DEFAULTS UNDER APPLICABLE LAW OR MATERIAL AGREEMENTS. The
consummation of the transactions contemplated hereby shall not (a) violate any
Requirement of Law or (b) conflict with, or result in a default or event of
default under, any material agreement of any Borrower. No event shall exist
which is, or solely with the passage of time, the giving of notice or both,
would be a default under any material agreement of any Borrower including,
without limitation, under the synthetic leases to which any Borrower or any
Affiliate of any Borrower is a party.
315 -NO LITIGATION. There shall not exist any litigation or other
proceedings the result of which would have a material adverse effect on the
Borrowers, their financial condition, business, taken as a whole.
316 -NO NEGATIVE IMPACT ON SYNDICATION. There shall not have occurred
any disruption or material adverse change in the financial or debt capital
markets in general that would, in the reasonable opinion of the Administrative
Agent, have a material adverse effect on the market for loan syndications, or
adversely affect the syndication of the Revolving Credit Loans.
317 - NO CHANGE IN GOVERNMENTAL REGULATIONS. No material changes shall
have occurred in governmental regulations or policies affecting the Borrowers,
the Administrative Agent or the Revolving Credit Lenders prior to the Closing
Date.
318 -BENEFIT OF CONDITIONS PRECEDENT. The conditions set forth in this
Article 3 are for the sole benefit of the Administrative Agent and each
Revolving Credit Lender and may be waived by the Administrative Agent in whole
or in part without prejudice to the Administrative Agent or any Revolving Credit
Lender.
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No document shall be deemed delivered to the Administrative Agent or any
Revolving Credit Lender until received and accepted by the Administrative Agent
at its offices in Boston, Massachusetts. Under no circumstances shall this
Agreement take effect until executed and accepted by the Administrative Agent at
said offices.
ARTICLE 4 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:
To induce each Revolving Credit Lender and the Issuer to establish the
credit facility contemplated herein and to induce the Revolving Credit Lenders
to provide Revolving Credit Loans and the Issuer to issue L/Cs under the
Revolving Credit (each of which Revolving Credit Loans shall be deemed to have
been made, and L/Cs to have been issued, in reliance thereupon) the Borrowers,
in addition to all other representations, warranties, and covenants made by any
Borrower in any other Loan Document, make those representations, warranties, and
covenants included in this Agreement.
41 -PAYMENT AND PERFORMANCE OF LIABILITIES. The Borrowers shall pay
each payment Liability when due (or when demanded, if payable on demand) and
shall promptly, punctually, and faithfully perform each other Liability.
42 -DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.
(a) Each Borrower presently is and hereafter shall remain in good
standing as a corporation under the laws of the State in which it is organized,
as set forth in the Preamble to this Agreement and is and shall hereafter remain
duly qualified and in good standing in every other State in which, by reason of
the nature or location of each Borrower's assets or operation of each Borrower's
business, such qualification may be necessary, except where the failure to so
qualify would not have a material adverse effect on the business or assets of
the Borrowers taken as a whole.
(b) As of the Closing Date, each Borrower's respective
organizational identification number assigned to it by the State of its
incorporation and its respective federal employer identification number is
stated on EXHIBIT 4-2, annexed hereto.
(c) No Borrower shall change its State of organization; any
organizational identification number assigned to that Borrower by that State; or
that Borrower's federal taxpayer identification number.
(d) Each Affiliate, as of the Closing Date, is listed on EXHIBIT 4-2. The Lead
Borrower shall provide the Administrative Agent with prior written notice of any
entity's becoming or ceasing to be an Affiliate.
(e) Each Borrower has all requisite corporate power and authority to
execute and deliver all Loan Documents to which that Borrower is a party and has
and will hereafter retain all requisite corporate power to perform all
Liabilities.
(f) The execution and delivery by each Borrower of each Loan
Document to which it is a party; each Borrower's consummation of the
transactions contemplated by such Loan Documents (including, without limitation,
the creation of Collateral Interests by that
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Borrower to secure the Liabilities); each Borrower's performance under those of
the Loan Documents to which it is a party; the borrowings hereunder; and the use
of the proceeds thereof:
(ii) Have been duly authorized by all necessary corporate
action.
(iii) Do not, and will not, contravene in any material respect
any provision of any Requirement of Law or obligation of that
Borrower.
(iv) Will not result in the creation or imposition of, or the
obligation to create or impose, any Encumbrance upon any
assets of that Borrower pursuant to any Requirement of Law or
obligation, except pursuant to the Loan Documents.
(a) The Loan Documents have been duly executed and delivered by each
Borrower and are the legal, valid and binding obligations of each Borrower,
enforceable against each Borrower in accordance with their respective terms,
except as enforceability is limited by bankruptcy, insolvency, or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that the availability of the remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
43 -TRADE NAMES.
(a) EXHIBIT 4-3, annexed hereto, is a listing, as of the Closing Date,
of:
(ii) All names under which any Borrower ever conducted its
business during the preceding five (5) years.
(iii) All Persons with whom any Borrower ever consolidated or
merged, or from whom any Borrower ever acquired in a single
transaction or in a series of related transactions
substantially all of such Person's assets, in each case within
the preceding five (5) years.
(a) The Lead Borrower will provide the Administrative Agent with not
less than twenty-one (21) days prior written notice (with reasonable
particularity) of any change to any Borrower's name from that under which that
Borrower is conducting its business at the execution of this Agreement and will
not effect such change unless each Borrower is then in compliance with all
provisions of this Agreement.
44 -INTELLECTUAL PROPERTY.
(a) Each Borrower owns and possesses, or has the right to use (and will
hereafter own, possess, or have such right to use) all patents, industrial
designs, trademarks, trade names, trade styles, brand names, service marks,
logos, copyrights, trade secrets, know-how, confidential information, and other
intellectual or proprietary property of any third Person reasonably necessary
for that Borrower's conduct of that Borrower's business.
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(b) The conduct by each Borrower of that Borrower's business does not
presently infringe (nor will any Borrower conduct its business in the future so
as to infringe) the patents, industrial designs, trademarks, trade names, trade
styles, brand names, service marks, logos, copyrights, trade secrets, know-how,
confidential information, or other intellectual or proprietary property of any
third Person in any manner that would have a material adverse effect on the
business or assets of the Borrowers taken as a whole.
45 -LOCATIONS.
(a) The Collateral, and the books, records, and papers of Borrowers'
pertaining thereto, are kept and maintained solely at the following locations:
(ii) The Lead Borrower's chief executive offices which, as of the
Closing Date, are at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
(iii) Those locations which are listed on EXHIBIT 4-5, annexed
hereto, which EXHIBIT includes, as of the Closing Date, with
respect to each such location, the name and address of the
landlord on the Lease which covers such location (or an
indication that a Borrower owns the subject location) and of
all service bureaus with which any such records are maintained
and the names and addresses of each of the Borrowers'
landlords.
(a) No Borrower shall remove any of the Collateral from said chief
executive office or those locations listed on EXHIBIT 4-5 or any location opened
in accordance with Section 4-5(c) hereof except for the following purposes:
(iv) To accomplish sales of Inventory in the ordinary course of
business.
(v) To move Inventory from one such location to another such
location.
(vi) To utilize such of the Collateral as is removed from such
locations in the ordinary course of business.
(iv) To dispose of Inventory that is not Eligible Inventory.
(v) To open or close stores or to move the chief executive
office.
(a) The Borrowers will not open any new locations at which any Borrower
maintains, offers for sale or stores any of the Collateral unless, to the extent
required by the Administrative Agent, the Administrative Agent shall have
received and filed additional UCC financing statements with respect to
Collateral at such new location. The Lead Borrower will promptly notify the
Administrative Agent in writing of any new location at which any Borrower
maintains, offers for sale, or stores any of the Collateral. The Borrowers will
not enter into any leases for any new locations at any time an Event of Default
exists.
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(b) Except as otherwise disclosed pursuant to this Section 4-5 or as
hereafter disclosed to the Administrative Agent, no Inventory of the Borrowers
with an aggregate Cost greater than $5,000,000.00 is in the care or custody of
any third party or stored or entrusted with a bailee or other third party and
Inventory with an aggregate Cost greater than $5,000,000.00 shall not hereafter
be placed under such care, custody, storage, or entrustment unless a landlord's
or bailee's agreement reasonably acceptable to the Administrative Agent has been
provided to the Administrative Agent in respect thereof.
46 -TITLE TO ASSETS.
(a) The Borrowers are, and shall hereafter remain, the owners of all
Collateral, in each case free and clear of all Encumbrances with the exceptions
of the following:
(ii) Encumbrances in favor of the Administrative Agent.
(iii) Those Encumbrances (if any) listed on EXHIBIT 4-6,
annexed hereto and any renewals or refinancings thereof that
does not increase the amount of Indebtedness secured thereby.
(iv) Permitted Encumbrances.
(v) Encumbrances granted to secure Indebtedness permitted
pursuant to Section 4-7(c) hereof, provided that such
Encumbrance shall attach only to the asset so acquired by the
Borrowers with the proceeds of such Indebtedness and shall not
extend to any other assets of the Borrowers.
(vi) Encumbrances granted to secure Indebtedness permitted
pursuant to Sections 4-7(d) and 4-7(e) hereof, provided that
such Encumbrance shall attach only to the real estate so
financed by the Borrowers with the proceeds of such
Indebtedness and shall not extend to any other assets of the
Borrowers, and further provided that if there is located on
such real estate any Inventory of the Borrowers or any books
and records relating to the Collateral, the mortgagee
obtaining such Encumbrance shall have furnished the
Administrative Agent with an agreement permitting the
Administrative Agent with reasonable access to the real estate
on which the mortgagee holds such Encumbrance for the purpose
of repossessing and/or disposing of any Collateral located
therein and waiving any rights in and to all Collateral, on
terms reasonably acceptable to the Administrative Agent.
(vii) Judgment liens with respect to judgments that do not
constitute an Event of Default under Section 10-8 hereof.
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(vii) Encumbrances securing the Indebtedness of any Borrower
to any other Borrower.
(viii) Encumbrances securing Indebtedness described in Section
4-7(h) hereof, provided that such Encumbrance shall attach only to all
goods of the Borrowers and Documents related thereto that are the
subject of a letter of credit issued by The Huntington National Bank
for the account of the Borrowers to support the purchase of such goods,
together with all substitutions, replacements, exchanges, reissues,
renewals and additions therefor or thereto, and all products and
proceeds thereof; provided that such Encumbrance as to any particular
goods shall terminate as provided in that certain Intercreditor
Agreement of even date herewith between the Administrative Agent and
said bank (as such agreement may be amended and in effect from time to
time).
(ix) Encumbrances upon any property or assets (other than
inventory and accounts) of any Person existing immediately prior to the
time of any Permitted Acquisition of such Person or such Person's
property or assets by a Borrower, provided that such Encumbrances were
not granted in contemplation of, or in connection with, such Permitted
Acquisition.
(a) No Borrower has, and none shall have, possession of any property on
consignment to that Borrower unless (i) the Lead Borrower has furnished the
Administrative Agent with ten (10) days prior written notice of its intent to
acquire such property on consignment, and (ii) if the Administrative Agent so
requests, an intercreditor agreement with the consignor on terms reasonably
acceptable to the Administrative Agent has been delivered to the Administrative
Agent, and (iii) the aggregate amount of property consigned to the Borrowers
shall not exceed ten percent of the Cost of the Borrowers' Inventory at any
time.
47 -INDEBTEDNESS. The Borrowers do not and shall not hereafter have any
Indebtedness with the exceptions of:
(a) Any Indebtedness on account of the Revolving Credit.
(b) The Indebtedness (if any) listed on EXHIBIT 4-7, annexed hereto and
any renewals or refinancings thereof that does not increase the principal amount
thereof.
(c) Subject to the proviso to this Section 4-7, Indebtedness incurred
after the date hereof to finance the acquisition of assets (other than those
described in Sections 4-7(d) or (e) hereof) which do not constitute Collateral
hereunder in an amount not to exceed $75,000,000.00 in the aggregate outstanding
at any time.
(d) Subject to the proviso to this Section 4-7 and excluding any
Indebtedness described in clause (e) below, Indebtedness incurred in connection
with mortgage financing of real estate owned by any of the Borrowers in an
amount not to exceed $100,000,000.00 in the aggregate outstanding at any time.
(e) Subject to the proviso to this Section 4-7, Indebtedness incurred
in connection with construction, mortgage, and equipment financing of a new
PowerMax facility by a Borrower in an amount not to exceed $60,000,000.00 in the
aggregate outstanding at any time.
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(f) Indebtedness due to any of Borrower by any other Borrower.
(g) Subject to the proviso to this Section 4-7, Guaranties of
Indebtedness of Subsidiaries, Related Entities and Affiliates of the Lead
Borrower in an amount not to exceed $50,000,000.00 in the aggregate outstanding
at any time.
(h) Subject to the proviso to this Section 4-7, Indebtedness to The
Huntington National Bank on account of the Continuing Agreement for Issuance of
Commercial Letters of Credit of even date herewith between the Lead Borrower and
said bank (as amended and in effect from time to time) in an aggregate principal
amount not to exceed $75,000,000.00 in the aggregate outstanding at any time.
(i) Subject to the proviso to this Section 4-7, Indebtedness, not to
exceed $200,000,000.00 in the aggregate at any time outstanding, subordinated to
the payment of the Obligations on terms which are reasonably acceptable to the
Administrative Agent.
(j) Indebtedness on account of Hedge Agreements on terms and in such
amounts as may be reasonably acceptable to the Administrative Agent.
(k) Subject to the proviso to this Section 4-7, other unsecured
Indebtedness not to exceed $50,000,000.00 in the aggregate outstanding at any
time.
provided, however, that in no event shall the Indebtedness incurred pursuant to
clauses (c), (d), (e),(g), (h), (i), and (k) exceed $400,000,000.00 in the
aggregate outstanding at any time.
48 -INSURANCE.
(a) EXHIBIT 4-8, annexed hereto, is a schedule of all insurance
policies owned by the Borrowers or under which any Borrower is the named insured
as of the Closing Date. Each of such material policies is in full force and
effect. Neither the issuer of any such policy nor any Borrower is in default or
violation of any such policy in any material respect.
(b) The Borrowers shall have and maintain at all times insurance
covering such risks, in such amounts, containing such terms, in such form, for
such periods, and written by such companies as is customarily maintained by
prudent companies in the Borrowers' industry (including such levels of
self-insurance as are deemed prudent by the Lead Borrower). The Borrowers shall
also have and maintain at all times insurance covering the Collateral, in such
amounts, containing such terms, in such form, for such periods, and written by
such companies as may be reasonably satisfactory to the Administrative Agent.
(c) All insurance carried by the Borrowers shall provide for a minimum
of sixty (60) days' written notice of cancellation to the Administrative Agent
and all such insurance which covers the Collateral shall include an endorsement
in favor of the Administrative Agent, which endorsement shall provide that the
insurance, to the extent of the Administrative Agent's interest therein, shall
not be impaired or invalidated, in whole or in part, by reason of any act or
neglect of any Borrower or by the failure of any Borrower to comply with any
warranty or condition of the policy.
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(d) The coverage reflected on EXHIBIT 4-8 presently satisfies the
foregoing requirements, it being recognized by each Borrower, however, that such
requirements may change hereafter to reflect changing circumstances.
(e) The Lead Borrower shall furnish the Administrative Agent from time
to time with certificates or other evidence satisfactory to the Administrative
Agent regarding compliance by the Borrowers with the foregoing requirements.
(f) In the event of the failure by the Borrowers to maintain insurance
as required herein, the Administrative Agent, at its option, may obtain such
insurance, provided, however, the Administrative Agent's obtaining of such
insurance shall not constitute a cure or waiver of any Event of Default
occasioned by the Borrowers' failure to have maintained such insurance.
49 -LICENSES. Each material license, distributorship, franchise, and
similar agreement issued to, or to which any Borrower is a party is in full
force and effect, except where the failure to be in full force and effect would
not have a material adverse effect on the business or assets of the Borrowers
taken as a whole. No party to any such license or agreement is in default or
violation thereof, where such default or violation would have a material adverse
effect on the business or assets of the Borrowers taken as a whole. As of the
Closing date, no Borrower has received any notice or threat of cancellation of
any such license or agreement. The Lead Borrower shall promptly furnish the
Administrative Agent with copies of any notice or threat of cancellation of any
such license or agreement which would have a material adverse effect on the
business or assets of the Borrowers taken as a whole.
410 -LEASES. EXHIBIT 4-10, annexed hereto, is a schedule of all
effective Capital Leases as of the Closing Date. (EXHIBIT 4-5 includes a list of
all other effective Leases as of the Closing Date). Each of such Leases and
Capital Leases is in full force and effect , except where the failure to be in
full force and effect would not have a material adverse effect on the business
or assets of the Borrowers taken as a whole. No party to any such Lease or
Capital Lease is in default or violation of any such Lease or Capital Lease
where such default or violation would have a material adverse effect on the
business or assets of the Borrowers taken as a whole. As of the Closing Date, no
Borrower has received any notice or threat of cancellation of any such Lease or
Capital Lease, except for cancellations which would not have a material adverse
effect on the business or assets of the Borrowers taken as a whole. Each
Borrower hereby authorizes the Administrative Agent at any time and from time to
time during the existence of an Event of Default to contact any of the
Borrowers' respective landlords in order to confirm the Borrowers' continued
compliance with the terms and conditions of the Lease(s) between the subject
Borrower and that landlord and to discuss such issues, concerning the subject
Borrower's occupancy under such Lease(s), as the Administrative Agent may
determine.
411 -REQUIREMENTS OF LAW. Each Borrower is in compliance with, and
shall hereafter comply with and use its assets in compliance with, all
Requirements of Law except where the failure of such compliance will not have a
material adverse effect on the Borrowers' business or assets taken as a whole.
No Borrower has received any notice of any
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violation of any Requirement of Law (other than of a violation which would not
have a material adverse effect on the Borrowers' business or assets taken as a
whole), which violation has not been cured or otherwise remedied.
412 -LABOR RELATIONS.
(a) As of the Closing Date, no Borrower is a party to any collective
bargaining or other labor contract.
(b) There is not presently pending and, to any Borrower's knowledge,
there is not threatened any of the following which would have a material adverse
effect on the business or assets of the Borrowers taken as a whole:
(ii) Any strike, slowdown, picketing, work stoppage, or
employee grievance process.
(iii) Any proceeding against or affecting any Borrower
relating to the alleged violation of any Applicable Law
pertaining to labor relations or before National Labor
Relations Board, the Equal Employment Opportunity Commission,
or any comparable governmental body, organizational activity,
or other labor or employment dispute against or affecting any
Borrower, which would reasonably be expected to have a
material adverse effect on the Borrowers' business or assets
taken as a whole.
(iv) Any lockout of any employees by any Borrower (and no such
action is contemplated by any Borrower).
(v) Any application for the certification of a collective
bargaining agent.
(a) No event has occurred or circumstance exists which would provide
the basis for any work stoppage or other labor dispute that would have a
material adverse effect on the business or assets of the Borrowers taken as a
whole.
(b) Except as set forth on EXHIBIT 4-12, each Borrower:
(vi) Has complied with all Applicable Law relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational
safety and health, and plant closing, except where the failure
to so comply would not have a material adverse effect on the
business or assets of the Borrowers taken as a whole.
(vii) Is not liable for the payment of more than any amount of
compensation, damages, taxes, fines, penalties, or other
amounts,
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however designated, for that Borrower's failure to comply with
any Applicable Law referenced in Section 4-12(d)(i), which
would have a material adverse effect on the Borrowers'
business or assets taken as a whole.
(a) The Lead Borrower shall furnish prompt notice to the Administrative
Agent of the occurrence of any event described in subparagraphs 4-12(a) through
and including 4-12(d) which would have been disclosed to the Administrative
Agent had such occurrence existed as of the Closing Date.
413 -MAINTAIN PROPERTIES. The Borrowers shall:
(a) Keep the Collateral in good order and repair (ordinary wear and
tear and insured casualty excepted).
(b) Not suffer or cause the waste or destruction of any material part
of the Collateral.
(c) Not use any of the Collateral in violation in any material respect
of any policy of insurance thereon.
(d) Not sell, lease, or otherwise dispose of any of the Collateral,
other than the following:
(ii) The sale of Inventory in compliance with this Agreement.
(iii) The turning over to the Administrative Agent of all
Receipts during the existence of a Cash Control Event as
provided herein.
414 -TAXES.
(a) With respect to the Borrowers' federal, state, and local tax
liability and obligations:
(ii) The Lead Borrower, in material compliance with all
Applicable Law, has properly filed all returns due to be filed
up to the date of this Agreement.
(iii) As of the Closing Date, except as described on EXHIBIT
4-14:
(B) At no time has any Borrower received from any taxing
authority any request to perform any examination of or with respect to
any Borrower nor any other written or verbal notice in any way relating
to any claimed failure by any Borrower to comply with all Applicable
Law concerning payment of any taxes or other amounts in the nature of
taxes.
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(C) No agreement exists which waives or extends any statute of
limitations applicable to the right of any taxing authority to assert a
deficiency or make any other claim for or in respect to federal income
taxes.
(D) No issue has been raised in any tax examination of any
Borrower which, by application of similar principles, reasonably would
be expected to result in the assertion of a deficiency for any fiscal
year open for examination, assessment, or claim by any taxing
authority.
(a) The Borrowers have, and hereafter shall: pay, as they become due
and payable, all taxes and unemployment contributions and other charges of any
kind or nature levied, assessed or claimed against any Borrower or the
Collateral by any person or entity whose claim could result in an Encumbrance
upon any asset of any Borrower or by any governmental authority (provided that
the Borrowers shall not be required to pay any such taxes or claims as long as
such tax or claim is being disputed by the Borrowers in good faith, the
Borrowers have established adequate reserves therefor in accordance with GAAP,
and no notice of tax lien has been filed with respect thereto); properly
exercise any trust responsibilities imposed upon any Borrower by reason of
withholding from employees' pay or by reason of any Borrower's receipt of sales
tax or other funds for the account of any third party; timely make all
contributions and other payments as may be required pursuant to any Employee
Benefit Plan now or hereafter established by any Borrower; and timely file all
tax and other returns and other reports with each governmental authority to whom
any Borrower is obligated to so file.
(b) During the existence of any Event of Default, at its option, the
Administrative Agent may, but shall not be obligated to, pay any such taxes,
unemployment contributions, and any and all other charges levied or assessed
upon any Borrower or the Collateral by any Person or governmental authority, and
make any contributions or other payments on account of the Borrowers' Employee
Benefit Plan as the Administrative Agent, in the Administrative Agent's
discretion, may deem necessary or desirable, to protect, maintain, preserve,
collect, or realize upon any or all of the Collateral or the value thereof or
any right or remedy pertaining thereto, provided, however, the Administrative
Agent's making of any such payment shall not constitute a cure or waiver of any
Event of Default occasioned by the Borrowers' failure to have made such payment.
415 -NO MARGIN STOCK. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of any
borrowing hereunder will be used at any time to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
416 -ERISA.
(a) Neither any Borrower nor any ERISA Affiliate has ever taken any of
the following actions that would have a material adverse effect on the business
or assets of the Borrowers taken as a whole:
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(ii) Violated or failed to be in compliance with any
Borrower's Employee Benefit Plan.
(iii) Failed timely to file all reports and filings required
by ERISA to be filed by any Borrower.
(iv) Engaged in any nonexempt "prohibited transactions" or
"reportable events" (respectively as described in ERISA).
(v) Engaged in, or committed, any act such that a tax or
penalty reasonably could be imposed upon any Borrower on
account thereof pursuant to ERISA.
(vi) Accumulated any material cumulative funding deficiency
within the meaning of ERISA.
(vii) Terminated any Employee Benefit Plan such that a lien
could be asserted against any assets of any Borrower on
account thereof pursuant to ERISA.
(viii) Have any obligation under any Employee Benefit Plan
which is a multiemployer plan within the meaning of Section
4001(a) of ERISA for withdrawal liability.
(a) Neither any Borrower nor any ERISA Affiliate shall ever engage in
any action of the type described in Section 4-16(a) to the extent that any of
the foregoing would have a material adverse effect on the Borrowers taken as a
whole.
417 -HAZARDOUS MATERIALS.
(a) No Borrower has ever: (i) been legally responsible for any release
or threat of release of any Hazardous Material or (ii) received notification of
the incurrence of any expense in connection with the assessment, containment, or
removal of any Hazardous Material for which that Borrower would be responsible,
except where such release or threat of release or incurrence of such expense
would not have a material adverse effect on the Borrowers' business or assets.
(b) Each Borrower shall: (i) dispose of any Hazardous Material only in
compliance with all Environmental Laws and (ii) have possession of any Hazardous
Material only in the ordinary course of that Borrower's business and in
compliance with all Environmental Laws, except, in each case, where the failure
to do so would not have a material adverse effect on the business or assets of
the Borrowers taken as a whole.
418 -LITIGATION. As of the Closing Date, except as described in EXHIBIT
4-18, annexed hereto, there is not presently pending or threatened by or against
any Borrower any suit, action, proceeding, or investigation which, if determined
adversely to any Borrower, would have
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a material adverse effect upon a Borrower's financial condition or ability to
conduct its business as such business is presently conducted or is contemplated
to be conducted in the foreseeable future.
419 -DIVIDENDS. INVESTMENTS. CORPORATE ACTION. No Borrower shall:
(a) Pay any cash dividend or make any other distribution in respect of
any class of that Borrower's capital stock, except that (i) the Subsidiaries of
the Lead Borrower may pay such dividends or make such distributions to the Lead
Borrower, and (ii) as long as no Default exists or would arise therefrom,
dividends and other distributions to Gateway Companies, Inc. or its assignees
under a certain Share Purchase and Investors Rights Agreement dated April 28,
2000 (the "Gateway Agreement").
(b) Redeem, retire, purchase, or acquire any of the Lead Borrower's
capital stock, provided that, as long as no Default exists or would arise
therefrom, the Lead Borrower may redeem, purchase, retire or acquire (i) the
Class B shares of capital stock issued under the Gateway Agreement in an amount
not to exceed $20,000,000.00, (ii) the Class A shares of capital stock issued
under the Gateway Agreement so long as (A) prior to and after giving effect to
such repurchase Availability is at least $200,000,000.00 and Availability is
projected on a pro forma basis to be at least $200,000,000.00 for the two Fiscal
quarters immediately following such redemption, purchase, retirement or
acquisition, and (B) the maximum amount which the Lead Borrower may expend for
all such stock repurchases after the Closing Date shall not exceed
$30,000,000.00, and (iii) other of its capital stock so long as (A) prior to and
after giving effect to such repurchase Availability is at least $200,000,000.00
and Availability is projected on a pro forma basis to be at least
$200,000,000.00 for the two Fiscal quarters immediately following such
redemption, purchase, retirement or acquisition, and (B) the maximum amount
which the Lead Borrower may expend for all such stock repurchases under this
clause (iii) after the Closing Date shall not exceed $100,000,000.00.
(c) Invest in or purchase any stock or securities or rights to purchase
any such stock or securities, of any Person, except for (i) investments
described in EXHIBIT 4-19, (ii) investments and purchase of equity in a
Subsidiary of a Borrower or an investment or purchase that would make an
Affiliate or a Related Entity a Subsidiary as long as no Default then exists or
would arise therefrom, (iii) Permitted Investments, (iv) investments
representing stock or obligations issued to a Borrower in settlement of claims
against any other Person by reason of a composition or adjustment of debt or a
reorganization of any debtor of a Borrower, and (v) Permitted Acquisitions, as
long as no Default exists or would arise therefrom.
(d) Merge or consolidate or be merged or consolidated with or into any
other Person, except that (i) any Subsidiary of a Borrower may merge with or
into the Lead Borrower or any other wholly owned Subsidiary of the Lead
Borrower, and (ii) Permitted Acquisitions , as long as no Default exists or
would arise therefrom.
(e) Consolidate any of that Borrower's operations with those of any
other Person, except that any Subsidiary of a Borrower may consolidate its
operations with or into the Lead Borrower or any other wholly owned Subsidiary
of the Lead Borrower.
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(f) Organize or create any Affiliate or Related Entity to the extent
that the Borrowers' investment in all such Affiliates and Related Entities after
the Closing Date (whether as equity, intercompany loan or otherwise and whether
such Affiliate or Related Entity is organized or created after the Closing Date)
exceeds $40,000,000.00 in the aggregate, provided that no such investment shall
be made during the existence of a Cash Control Event.
(g) Subordinate any debts or obligations owed to that Borrower by any
third party to any other debts owed by such third party to any other Person.
(h) Acquire any assets other than in the ordinary course and conduct of
that Borrower's business as conducted at the execution of this Agreement, except
for Permitted Acquisitions to be discussed, as long as no Default exists or
would arise therefrom.
420 -LOANS. No Borrower shall make any loans or advances to, nor
acquire the Indebtedness of, any Person, provided, however, the foregoing does
not prohibit any of the following:
(a) Advance payments made to that Borrower's suppliers in the ordinary
course.
(b) Advances to that Borrower's officers, employees, and salespersons
with respect to reasonable expenses to be incurred by such officers, employees,
and salespersons for the benefit of that Borrower, which expenses are properly
substantiated by the person seeking such advance and properly reimbursable by
that Borrower.
(c) Intercompany loans amongst the Borrowers.
(d) Loans to Affiliates and Related Entities of the Borrowers PROVIDED
THAT the Borrowers' investment in all such Affiliates and Related Entities after
the Closing Date (whether as equity, intercompany loans or otherwise and whether
such Affiliate or Related Entity is organized or created after the Closing Date)
shall not exceed $40,000,000.00 in the aggregate provided that no such loans
shall be made during the existence of a Cash Control Event.
(e) Loans to employees, officers and salespersons of the Borrowers
consistent with past practices provided that (i) any loans to any individual
shall not exceed $250,000.00 in the aggregate outstanding at any time, and (ii)
all such loans to employees, officers and salespersons of the Borrowers shall
not exceed $3,000,000.00 in the aggregate outstanding at any time.
421 -PROTECTION OF ASSETS. The Administrative Agent, in the
Administrative Agent's reasonable discretion, and from time to time during the
existence of an Event of Default, may discharge any tax or Encumbrance on any of
the Collateral, or take any other action which the Administrative Agent may deem
necessary or desirable to repair, insure, maintain, preserve, collect, or
realize upon any of the Collateral. The Administrative Agent shall not have any
obligation to undertake any of the foregoing and shall have no liability on
account of any action
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so undertaken except where there is a specific finding in a judicial proceeding
(in which the Administrative Agent has had an opportunity to be heard), from
which finding no further appeal is available, that the Administrative Agent had
acted in actual bad faith or in a grossly negligent manner. The Borrowers shall
pay to the Administrative Agent, on demand, or the Administrative Agent, in its
discretion, may add to the Loan Account, all amounts paid or incurred by the
Administrative Agent pursuant to this Section 4-21.
422 -LINE OF BUSINESS. No Borrower shall engage in any business other
than the business in which it is currently engaged or a business reasonably
related thereto. Notwithstanding anything to the contrary herein contained, the
Borrowers may offer any product or service reasonably anticipated to serve the
needs and desires of the Borrowers' customers, including, without limitation,
small and medium sized businesses, home office customers and individual business
customers. Similarly, the Borrowers may offer any product or service offered to
the Borrowers' customers by the Borrowers' competitors.
423 -AFFILIATE TRANSACTIONS. Except as described on EXHIBIT 4-23 or as
otherwise permitted under this Agreement, no Borrower shall make any payment,
nor give any value to any Affiliate that is not a Borrower except for goods and
services actually purchased by that Borrower from, or sold by that Borrower to,
such Affiliate for a price and on terms which shall be no less favorable to that
Borrower than those which would have been charged and imposed in an arms length
transaction.
424 -FURTHER ASSURANCES.
(a) Each Borrower shall execute and deliver to the Administrative Agent
such instruments, documents, and papers, and shall do all such things from time
to time hereafter as the Administrative Agent may reasonably request to carry
into effect the provisions and intent of this Agreement; to protect and perfect
the Administrative Agent's Collateral Interests in the Collateral; and to comply
in all material respects with all applicable statutes and laws, and facilitate
the collection of the Receivables Collateral. Each Borrower shall execute all
such instruments as may be reasonably required by the Administrative Agent with
respect to the recordation and/or perfection of the Collateral Interests created
or contemplated herein.
(b) Each Borrower hereby designates the Administrative Agent as and for
that Borrower's true and lawful attorney, with full power of substitution, to
sign and file any financing statements in order to perfect or protect the
Administrative Agent's Collateral Interests in the Collateral during the
existence of an Event of Default.
(c) A carbon, photographic, or other reproduction of this Agreement or
of any financing statement or other instrument executed pursuant to this Section
4-24 shall be sufficient for filing to perfect the security interests granted
herein.
425 -ADEQUACY OF DISCLOSURE.
(a) All financial statements furnished to the Administrative Agent and
to each Revolving Credit Lender by each Borrower have been prepared in
accordance with GAAP
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consistently applied and present fairly in all material respects the condition
of the Borrowers at the date(s) thereof and the results of operations and cash
flows for the period(s) covered (provided however, that unaudited financial
statements are subject to normal year end adjustments and to the absence of
footnotes). There has been no change in the Consolidated financial condition,
results of operations, or cash flows of the Borrowers since the date(s) of such
financial statements, other than changes in the ordinary course of business, and
changes which have not been materially adverse, either singularly or in the
aggregate.
(b) As of the Closing Date, no Borrower has any contingent obligations
or obligation under any Lease, excluding synthetic leases not reported under
GAAP, or Capital Lease which is not noted in the Borrowers' Consolidated
financial statements furnished to the Administrative Agent and to each Revolving
Credit Lender prior to the execution of this Agreement.
(c) No document, instrument, agreement, or paper now or hereafter given
to the Administrative Agent or to any Revolving Credit Lender by or on behalf of
each Borrower in connection with the execution of this Agreement by the
Administrative Agent and each Revolving Credit Lender (other than projections
and forecasts, which are and will be made in good faith using reasonable
assumptions) contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements therein not misleading. There is no fact known to any Borrower which
has, or which, in the foreseeable future would likely have, a material adverse
effect on the financial condition of any Borrower which has not been disclosed
in writing to the Administrative Agent and to each Revolving Credit Lender.
▇▇▇ -▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ LIABILITIES. Except as disclosed in EXHIBIT
4-7, no Borrower shall enter into or directly or indirectly become subject to
any agreement which prohibits or restricts, in any manner, any Borrower's:
(a) Creation of, and granting of Collateral Interests in favor of the
Administrative Agent.
(b) Incurrence of Liabilities.
427 -OTHER COVENANTS. No Borrower shall indirectly do or cause to be
done any act which, if done directly by that Borrower, would breach any covenant
contained in this Agreement.
ARTICLE 5 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:
51 -MAINTAIN RECORDS. The Borrowers shall:
(a) At all times, keep proper books of account, in which full, true,
and accurate entries shall be made in all material respects of all of the
Borrowers' financial transactions, all in accordance with GAAP applied
consistently with prior periods to fairly reflect
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the Consolidated financial condition of the Borrowers at the close of, and its
results of operations for, the periods in question.
(b) Timely provide the Administrative Agent with those financial
reports, statements, and schedules required by this Article 5 or otherwise, each
of which reports, statements and schedules shall be prepared, to the extent
applicable, in accordance with GAAP applied consistently with prior periods to
fairly reflect in all material respects the Consolidated financial condition of
the Borrowers at the close of, and the results of operations for, the period(s)
covered therein.
(c) At all times, keep accurate current records of the Collateral
including, without limitation, accurate current stock, cost, and sales records
of its Inventory, accurately and sufficiently itemizing and describing the
kinds, types, and quantities of Inventory and the cost and selling prices
thereof.
(d) At all times, retain independent certified public accountants who
are reasonably satisfactory to the Administrative Agent and instruct such
accountants to fully cooperate with, and be available to, the Administrative
Agent to discuss the Borrowers' financial performance, financial condition,
operating results, controls, and such other matters, within the scope of the
retention of such accountants, as may be raised by the Administrative Agent.
(e) Not change any Borrower's fiscal year without furnishing the
Administrative Agent with at least ninety (90) days prior written notice
thereof.
52 -ACCESS TO RECORDS.
(a) Each Borrower shall accord the Administrative Agent with access
from time to time during normal business hours and, as long as no Event of
Default exists, upon reasonable prior notice, as the Administrative Agent may
reasonably require to all properties owned by or over which any Borrower has
control. Subject to the provisions of Section 5-9(d) hereof, the Administrative
Agent shall have the right (as long as no Event of Default exists, upon
reasonable prior notice), and each Borrower will permit the Administrative Agent
from time to time as Administrative Agent may reasonably request, to examine,
inspect, copy, and make extracts from any and all of the Borrowers' books,
records, electronically stored data, papers, and files and in connection
therewith, each Borrower shall make all of that Borrower's copying facilities
available to the Administrative Agent.
(b) Subject to the provisions of Section 5-2(a) hereof, each Borrower
hereby authorizes the Administrative Agent to:
(ii) Inspect, copy, duplicate, review, cause to be
reduced to hard copy, run off, draw off, and
otherwise use any and all computer or electronically
stored information or data which relates to any
Borrower, or any service bureau, contractor,
accountant, or other person, and directs any such
service bureau, contractor, accountant,
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or other person fully to cooperate with the
Administrative Agent with respect thereto.
(iii) During the existence of a Cash Control Event,
verify at any time the Collateral or any portion
thereof, including verification with Account Debtors,
and/or with each Borrower's computer billing
companies, collection agencies, and accountants and
to sign the name of each Borrower on any notice to
each Borrower's Account Debtors or verification of
the Collateral.
(a) The Administrative Agent from time to time may designate one or
more representatives to exercise the Administrative Agent's rights under this
Section 5-2 as fully as if the Administrative Agent were doing so.
53 -IMMEDIATE NOTICE TO ADMINISTRATIVE AGENT.
(a) The Lead Borrower shall provide the Administrative Agent with
written notice promptly upon the occurrence of any of the following events,
which written notice shall be with reasonable particularity as to the facts and
circumstances in respect of which such notice is being given:
(ii) Any change in any Borrower's President, chief executive
officer, chief operating officer, and chief financial officer
(without regard to the title(s) actually given to the Persons
discharging the duties customarily discharged by officers with
those titles).
(iii) Any cessation of any Borrower's making of payment, in
the ordinary course, to any of its creditors (other than its
cessation of making of such payments on account of a dispute
with such creditor), which would have a material adverse
effect on the financial condition of the Borrowers taken as a
whole.
(iv) Any failure by any Borrower to pay rent at any of that
Borrower's locations, which failure continues for more than
three (3) days following the last day on which such rent was
payable without a material adverse effect to the Borrowers
taken as a whole, unless such rent is being disputed by the
Borrowers in good faith and the Borrowers have established
adequate reserves therefor in accordance with GAAP.
(v) Any event which the Lead Borrower determines to have a
material adverse effect in the business, operations, or
financial affairs of the Borrowers taken as a whole.
(vi) The occurrence of any Default.
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(vii) Any intention on the part of any Borrower to discharge
that Borrower's present independent accountants or any
withdrawal or resignation by such independent accountants from
their acting in such capacity (as to which, see Subsection
5-1(d)).
(viii) Any litigation which, if determined adversely to any
Borrower, would have a material adverse effect on the
financial condition of the Borrowers taken as a whole.
(a) The Lead Borrower shall:
(ix) Provide the Administrative Agent, when so distributed,
with copies of any materials distributed to the shareholders
of the Lead Borrower (qua such shareholders).
(x) Provide the Administrative Agent:
(B) When filed, copies of all filings with the SEC.
(C) When received, copies of all correspondence from the SEC,
other than routine non-substantive general communications from the SEC.
(i) Add the Administrative Agent as an addressee on all
investor mailing lists maintained by each Borrower.
(ii) Provide the Administrative Agent, when received by any
Borrower, with a copy of any management letter or similar
communications from any accountant of any Borrower.
54 -BORROWING BASE CERTIFICATE. The Lead Borrower shall provide the
Administrative Agent with a Borrowing Base Certificate (in the form of EXHIBIT
5-4 annexed hereto, as such form may be revised from time to time by the
Administrative Agent) monthly on fifth Business Day after the last day of each
calendar month (as of the close of business on the last day of each fiscal
month), provided that if a Increased Reporting Event occurs, the Lead Borrower
shall furnish such Borrowing Base Certificate weekly on Wednesday of each week
(or if not a Business Day, the next succeeding Business Day) as of the close of
business on the immediately preceding Saturday (which date for delivery of such
reports shall thereafter not change until the circumstances giving rise to the
Increased Reporting Event are remedied as provided in the definition of
"Increased Reporting Event"). Such Certificate may be sent to the Administrative
Agent by facsimile transmission, provided that the original thereof is forwarded
to the Administrative Agent on the date of such transmission.
55 -MONTHLY REPORTS.
Monthly, the Lead Borrower shall provide the Administrative Agent with
original counterparts of the following (each in such form as the Administrative
Agent from time to time may specify):
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(i) those reports described in EXHIBIT 5-5 hereto, at the times
set forth in such EXHIBIT;
(ii) Within thirty (30) days following the end of each fiscal
month (except for any month which corresponds to the end of a
fiscal quarter of the Borrowers), an internally prepared
financial statement of the Borrowers' Consolidated financial
condition and the results of its operations for, the period
ending with the end of the subject month, which financial
statement shall include, at a minimum, a balance sheet, income
statement, cash flow and comparison of same store sales for
the corresponding month of the then immediately previous year,
as well as to the Borrowers' business plan or most recent
forecast.
56 -QUARTERLY REPORTS. Quarterly, within fifty (50) days following the
end of each of the Borrowers' fiscal quarters, the Lead Borrower shall provide
the Administrative Agent with the following:
(a) An original counterpart of a management prepared financial
statement of the Borrowers for the period from the beginning of the Borrowers'
then current fiscal year through the end of the subject fiscal quarter, with
comparative information for the same period of the previous fiscal year, which
statement shall include, at a minimum, a balance sheet, income statement,
statement of changes in shareholders' equity, and cash flows and comparisons for
the corresponding fiscal quarter of the then immediately previous fiscal year,
as well as to the Borrowers' business plan or most recent forecast.
(b) The officer's compliance certificate described in Section 5-8.
(c) The Borrowers' 10Q report filed with the SEC.
57 -ANNUAL REPORTS.
Annually, within ninety-five (95) days following the end of the
Borrowers' fiscal year, the Lead Borrower shall furnish the Administrative Agent
with the following:
(i) An original signed counterpart of the Borrowers'
Consolidated annual financial statement, which statement shall
have been prepared by, and bear the unqualified opinion of,
the Lead Borrower's independent certified public accountants
reasonably acceptable to the Administrative Agent
(PricewaterhouseCoopers, LLC or another nationally recognized
accounting firm being acceptable) (i.e. said statement shall
be "certified" by such accountants) and shall include, at a
minimum (with comparative information for the then prior
fiscal year) a balance sheet, income statement, statement of
changes in shareholders' equity, cash flows, and schedules of
consolidation.
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(ii) The officer's compliance certificate described in Section
5-8.
(iii) The Borrowers' 10K report filed with the SEC.
58 -OFFICERS' CERTIFICATES. The Lead Borrower shall cause either the
Lead Borrower's President or its Chief Financial Officer, in each instance, to
provide such Person's Certificate with those monthly, quarterly, and annual
statements to be furnished pursuant to this Agreement, which Certificate shall:
(a) Indicate that the subject statement was prepared in accordance with
GAAP consistently applied and presents fairly in all material respects the
Consolidated financial condition of the Borrowers at the close of, and the
results of the Borrowers' operations and cash flows for, the period(s) covered,
subject, however to the following:
(ii) Usual year end adjustments and the absence of footnotes
(this exception shall not be included in the Certificate which
accompanies such annual statement).
(iii) Material Accounting Changes (in which event, such
Certificate shall include a schedule (in reasonable detail) of
the effect of each such Material Accounting Change) not
previously specifically taken into account in the
determination of the financial performance covenant imposed
pursuant to Section 5-11.
(a) Indicate either that (i) no Default exists, or (ii) if such an
event has occurred, its nature (in reasonable detail) and the steps (if any)
being taken or contemplated by the Borrowers to be taken on account thereof.
(b) Include calculations concerning the Borrowers' compliance (or
failure to comply) at the date of the subject statement with the financial
performance covenant included in Section 5-11 hereof (whether or not a Covenant
Compliance Event then exists).
59 -INVENTORIES, APPRAISALS, AND AUDITS.
(a) The Administrative Agent, at the reasonable expense of the
Borrowers (but in no event to exceed $25,000.00 per annum), may participate in
and/or observe each physical count and/or inventory of so much of the Collateral
as consists of Inventory which is undertaken on behalf of any Borrower.
(b) The Borrowers, at their own expense, shall cause not less than one
(1) physical inventory of each of their locations to be undertaken in each
twelve (12) month period during which this Agreement is in effect and shall
cause cycle counts to be undertaken in a manner consistent with their practices
in effect on the Closing Date (or such other procedures as may be reasonably
satisfactory to the Administrative Agent).
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(ii) The Lead Borrower shall provide the Administrative Agent
with a copy of the preliminary results of each such physical
inventory and cycle count within thirty (30) days following
the completion of such inventory.
(iii) The Lead Borrower, within forty-five (45) days following
the completion of such physical inventory or cycle count,
shall provide the Administrative Agent with a reconciliation
of the results of each such physical inventory or cycle count
and shall post such results to the Borrowers' perpetual
inventory system and, as applicable to the Borrowers' other
financial books and records .
(iv) The Administrative Agent, in its reasonable discretion,
if any Default exists, may cause such additional inventories
to be taken as the Administrative Agent reasonably determines
(each, at the expense of the Borrowers).
(a) The Administrative Agent may obtain appraisals of the Collateral,
from time to time (in all events, at the Borrowers' expense) conducted by such
appraisers as are reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall not conduct more than one (1) appraisal of the
Collateral, at the Borrowers' expense (which expense will not exceed $50,000.00
in any twelve month period plus all reasonable out-of-pocket expenses), during
any twelve (12) month period during which this Agreement is in effect, unless an
Event of Default shall exist, in which case the Administrative Agent may
undertake additional such appraisals (at the Borrowers' expense) during such
period as the Administrative Agent shall reasonably require.
(b) The Administrative Agent contemplates conducting two (2) commercial
finance field examinations (in each event, at the Borrowers' expense, which
expense will not exceed $30,000.00 in any twelve month period, plus all
reasonable out-of-pocket expenses) of the Borrowers' books and records during
any twelve (12) month period during which this Agreement is in effect, unless an
Event of Default shall have occurred and be continuing, in which case the
Administrative Agent may undertake such additional audits (at the Borrowers'
expense) during such period as the Administrative Agent shall reasonably
require.
510 -ADDITIONAL FINANCIAL INFORMATION.
(a) In addition to all other information required to be provided
pursuant to this Article 5, the Lead Borrower promptly shall provide the
Administrative Agent with such other and additional information concerning the
Borrowers, the Collateral, the operation of the Borrowers' business, and the
Borrowers' financial condition, including original counterparts of financial
reports and statements, as the Administrative Agent may from time to time
reasonably request from the Lead Borrower.
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(b) The Lead Borrower may provide the Administrative Agent, from time
to time hereafter, with updated forecasts of the Borrowers' anticipated
performance and operating results.
(c) In all events, the Lead Borrower, no later than thirty (30) days
after the end of each of the Borrowers' fiscal years, shall provide the
Administrative Agent with an updated and extended forecast which shall go out at
least through the end of that fiscal year and shall include an income statement,
balance sheet, and statement of cash flow, by month, each Consolidated (with
consolidating schedules) and each prepared in conformity with GAAP and
consistent with the Borrowers' then current practices.
(d) Each Borrower recognizes that all inventories, analysis, financial
information, and other materials which the Administrative Agent may obtain,
develop, or receive with respect to the Borrowers are confidential to the
Administrative Agent and that, except as otherwise provided herein, no Borrower
is entitled to receipt of any of such inventories, analysis, financial
information, and other materials, nor copies or extracts thereof or therefrom.
Notwithstanding the foregoing, as long as no Event of Default exists, the
Administrative Agent shall furnish the Lead Borrower with a copy of each
appraisal obtained by the Administrative Agent.
511 -FINANCIAL PERFORMANCE COVENANTS.
(a) If a Covenant Compliance Event exists, the Borrowers shall cause
its Fixed Charge Ratio to be at least 1:1 as of the end of each of its fiscal
months commencing with the fiscal month ending immediately prior to the date of
the Covenant Compliance Event. Compliance with such financial performance
covenant shall thereafter be required as provided in the definition of "Covenant
Compliance Event".
(b) Compliance with such financial performance covenant shall be made
as if no Material Accounting Changes had been made (other than any Material
Accounting Changes specifically taken into account in the setting of such
covenants). The Administrative Agent may determine the Borrowers' compliance
with such covenants based upon financial reports and statements provided by the
Lead Borrower to the Administrative Agent as well as by reference to interim
financial information provided to the Administrative Agent.
ARTICLE 6 - USE OF COLLATERAL:
61 -USE OF INVENTORY COLLATERAL.
(a) No Borrower shall engage
(ii) In any sale of the Inventory other than for fair
consideration in the conduct of the Borrowers' business in the
ordinary course or as permitted under this Agreement.
(iii) Sales or other dispositions to creditors.
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(iv) Sales or other dispositions in bulk other than in
connection with any store closings, PROVIDED THAT in no event
shall Inventory sold in bulk as a result of store closings
after the Closing Date exceed, in the aggregate, fifteen
percent (15%) of the Cost of the Borrowers' Inventory existing
as of the Closing Date.
(v) Sales of any Collateral in breach of any provision of this
Agreement.
(a) No sale of Inventory shall be on consignment, approval, or under
any other circumstances such that such Inventory may be returned to a Borrower
without the consent of the Administrative Agent (with the exception of the
Borrowers' customary return policy applicable to the return of inventory
purchased by the Borrowers' retail customers in the ordinary course).
62 -INVENTORY QUALITY. All Inventory now owned or hereafter acquired by
each Borrower and at the time included in the Borrowing Base is and will be of
good and merchantable quality and free from defects (other than defects within
customary trade tolerances).
63 -ADJUSTMENTS AND ALLOWANCES. Each Borrower may grant such allowances or
other adjustments to that Borrower's Account Debtors (exclusive of extending
the time for payment of any Account or Account Receivable, which shall not be
done without first obtaining the Administrative Agent's prior written consent in
each instance, which consent shall not be unreasonably delayed or withheld) as
that Borrower may reasonably deem to accord with sound business practice,
provided, however, the authority granted the Borrowers pursuant to this Section
6-3 may be limited or terminated by the Administrative Agent at any time during
the existence of an Event of Default in the Administrative Agent's reasonable
discretion.
64 -VALIDITY OF ACCOUNTS.
(a) The amount of each Account shown on the books, records, and
invoices of the Borrowers represented as owing by each Account Debtor is and
will be the correct amount actually owing by such Account Debtor and shall have
been fully earned by performance by the Borrowers.
(b) No Borrower has any knowledge of any impairment of the validity or
collectibility of any of the Accounts included in the Borrowing Base. The Lead
Borrower shall notify the Administrative Agent of any such impairment
immediately after any Borrower becomes aware of any such impairment.
(c) Except for Permitted Encumbrances and Standby L/Cs permitted
hereunder, no Borrower shall post any bond to secure any Borrower's performance
under any agreement to which any Borrower is a party nor cause any surety,
guarantor, or other third party obligee to become liable to perform any
obligation of any Borrower (other than to the Administrative Agent) in the event
of any Borrower's failure so to perform.
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65 -NOTIFICATION TO ACCOUNT DEBTORS. The Administrative Agent shall have
the right, during the existence of a Cash Control Event or an Event of Default,
to notify any of the Borrowers' Account Debtors to make payment directly to the
Administrative Agent and to collect all amounts due on account of the
Collateral.
ARTICLE 7 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:
71 -DEPOSITORY ACCOUNTS.
(a) Annexed hereto as EXHIBIT 7-1 is a Schedule of all present DDA's as
of the Closing Date, which Schedule includes, with respect to each depository
(i) the name and address of that depository; (ii) the account number(s) of the
account(s) maintained with such depository; and (iii) a contact person at such
depository.
(b) The Lead Borrower shall deliver the following to the Administrative
Agent, as a condition to the effectiveness of this Agreement:
(ii) Notification, executed on behalf of each Borrower, to
each depository institution with which any DDA is maintained
(other than any Exempt DDA and the Blocked Account), in form
satisfactory to the Administrative Agent of the Administrative
Agent's interest in such DDA .
(iii) A Blocked Account Agreement with any depository
institution at which either of the following conditions
applies:
(B) Both any DDA (other than the Operating Account) and the
Operating Account is maintained.
(C) A Blocked Account is maintained.
(a) No Borrower will establish any DDA hereafter (other than an Exempt
DDA) unless, contemporaneous with such establishment, the Lead Borrower delivers
the following to the Administrative Agent:
(ii) Notification to the depository at which such DDA is
established if the same would have been required pursuant to
Section 7-1(b)(ii)(A) if the subject DDA were open at the
execution of this Agreement.
(iii) A Blocked Account Agreement executed on behalf of the
depository at which such DDA is established if the same would
have been required pursuant to Section 7-1(b)(ii)(B) if the
subject DDA were open at the execution of this Agreement.
72 -CREDIT CARD RECEIPTS.
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(a) Annexed hereto as EXHIBIT 7-2, is a Schedule which describes all
arrangements to which any Borrower is a party as of the Closing Date with
respect to the payment to that Borrower of the proceeds of credit card charges
for sales by that Borrower.
(b) The Lead Borrower shall deliver to the Administrative Agent, as a
condition to the effectiveness of this Agreement, notifications, executed on
behalf of each Borrower, to each of each Borrower's credit card clearinghouses
and processors of notice (in form satisfactory to the Administrative Agent),
which notice provides that payment of all credit card charges submitted by that
Borrower to that clearinghouse or other processor and any other amount payable
to that Borrower by such clearinghouse or other processor shall, (i) whether or
not a Cash Control Event has occurred and is continuing, be directed to the
Primary Blocked Account, and (ii) during the existence of a Cash Control Event,
be directed to the Primary Blocked Account, or the Concentration Account or,
during the existence of an Event of Default, as otherwise designated from time
to time by the Administrative Agent. No Borrower shall change such direction or
designation except upon and with the prior written consent of the Administrative
Agent.
73 -THE CONCENTRATION, BLOCKED, AND OPERATING ACCOUNTS .
(a) The following checking accounts have been or will be established
(and are so referred to herein):
(ii) The "CONCENTRATION ACCOUNT" (so referred to herein):
Established by the Administrative Agent with Fleet National
Bank.
(iii) The "BLOCKED ACCOUNTS" (so referred to herein):
Established by the Lead Borrower with those financial
institutions described on EXHIBIT 7-3.
(iv) The "OPERATING ACCOUNT" (so referred to herein):
Established by the Lead Borrower with National City Bank
(Account No. ▇▇▇▇▇▇▇). (v) The PRIMARY BLOCKED ACCOUNT.
(a) The contents of each DDA and of the Blocked Accounts constitutes
Collateral and Proceeds of Collateral. The contents of the Concentration Account
constitutes the Administrative Agent's property and shall be applied to the
Liabilities in accordance with the provisions of Section 7-5 hereof.
(b) The Borrowers shall pay all fees and charges of, and maintain such
impressed balances as may be required by the depository in which any account is
opened as required hereby (even if such account is opened by and/or is the
property of the Administrative Agent).
74 -PROCEEDS AND COLLECTIONS.
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(a) All Receipts and all cash proceeds of any sale or other disposition
of Inventory and Accounts of each Borrower:
(ii) Constitute Collateral and proceeds of Collateral.
(iii) During the existence of a Cash Control Event, shall be
held in trust by the Borrowers for the Administrative Agent.
(iv) During the existence of a Cash Control Event, shall not
be commingled with any of any Borrower's other funds.
(v) During the existence of a Cash Control Event, shall be
deposited and/or transferred only to the Blocked Accounts or
the Concentration Account.
(a) During the existence of a Cash Control Event, the Lead Borrower
shall cause the ACH or wire transfer to the Primary Blocked Account or the
Concentration Account, no less frequently than daily (and whether or not there
is then an outstanding balance in the Loan Account) of the following:
(vi) The then collected funds in each DDA (other than any
Exempt DDA), each such transfer to be net of any minimum
balance, not to exceed $10,000.00, as may be required to be
maintained in the subject DDA by the bank at which such DDA is
maintained).
(vii) The proceeds of all credit card charges not otherwise
provided for pursuant hereto.
Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each Business Day on which any such transfer is made.
(a) Whether or not any Liabilities are then outstanding, during the
existence of a Cash Control Event, the Lead Borrower shall cause the ACH or wire
transfer to the Concentration Account, no less frequently than daily on each
Business Day, of all collected funds in each Blocked Account, net of such
minimum balance, not to exceed $10,000.00, as may be required to be maintained
in the Blocked Account by the depository which the Blocked Account is
maintained.
(b) In the event that, notwithstanding the provisions of this Section
7-4, during the existence of a Cash Control Event, any Borrower receives or
otherwise has dominion and control of any Receipts, or any proceeds or
collections of any Collateral, such Receipts, proceeds, and collections shall be
held in trust by that Borrower for the Administrative Agent and shall not be
commingled with any of that Borrower's other funds or deposited in any account
of any Borrower other than as instructed by the Administrative Agent.
75 -PAYMENT OF LIABILITIES.
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(a) During the existence of a Cash Control Event (or as the Lead
Borrower may direct), on each Business Day, the Administrative Agent shall apply
the then collected balance of the Concentration Account (net of fees charged,
and of such impressed balances as may be required by the bank at which the
Concentration Account is maintained), as of the day immediately following
receipt of such collected funds, first, towards the SwingLine Loans and second,
towards the unpaid balance of the Loan Account and all other Liabilities,
subject to the provisions of Section 2-10(e).
(b) All deposits to the Concentration Account and other payments to the
Administrative Agent are subject to clearance and collection.
(c) The Administrative Agent shall transfer to the Operating Account
any surplus in the Concentration Account remaining after the application towards
the Liabilities referred to in Section 7-5(a), above (less those amount which
are to be netted out, as provided therein) provided, however, in the event that
(ii) any Default exists; and
(iii) one or more L/Cs are then outstanding,
then the Administrative Agent may establish a funded reserve of up to 103% of
the aggregate Stated Amounts of such L/Cs. Such funded reserve shall either be
(i) returned to the Lead Borrower provided that no Default exists or (ii)
applied towards the Liabilities during the existence of any Event of Default
described in Section 10-10 or acceleration during the existence of any other
Event of Default.
ARTICLE 8 - GRANT OF SECURITY INTEREST:
81 -GRANT OF SECURITY INTEREST. To secure the Borrowers' prompt,
punctual, and faithful performance of all and each of the Liabilities, each
Borrower hereby grants to the Administrative Agent, for the ratable benefit of
the Revolving Credit Lenders, a continuing security interest in and to, and
assigns to the Administrative Agent, for the ratable benefit of the Revolving
Credit Lenders, the following, and each item thereof, whether now owned or now
due, or in which that Borrower has an interest, or hereafter acquired, arising,
or to become due, or in which that Borrower obtains an interest, and all
Proceeds and substitutions of or to any of the following (all of which, together
with any other property in which the Administrative Agent may in the future be
granted a security interest, is referred to herein as the "COLLATERAL"):
(a) All Accounts.
(b) All Inventory.
(c) All Letter-of-Credit Rights arising from or relating to the
Borrowers' Accounts and Inventory.
(d) All Payment Intangibles arising from, relating to, or constituting
proceeds of Accounts and Inventory.
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(e) All Supporting Obligations arising from, relating to, or
constituting proceeds of Accounts and Inventory.
(f) All Instruments arising from, relating to, or constituting proceeds
of Account and Inventory.
(g) All Documents relating to the Borrowers' Inventory.
(h) All Deposit Accounts in which any monies deposited therein arise
from, relate to or constitute proceeds of Accounts and Inventory.
(i) Money, cash, policies and certificates of insurance, in each case,
arising from, relating to, or constituting proceeds of Accounts and Inventory.
(j) All insurance proceeds, refunds, and premium rebates, including,
without limitation, proceeds of fire and credit insurance, arising out of any of
the foregoing. (8-1(a) through 8-1(i)) or otherwise.
(k) All liens, guaranties, rights, remedies, and privileges pertaining
to any of the foregoing (8-1(a) through 8-1(j)), including the right of stoppage
in transit.
82 -EXTENT AND DURATION OF SECURITY INTEREST.
(a) The security interest created and granted herein is in addition to,
and supplemental of, any security interest previously granted by any Borrower to
the Administrative Agent and shall continue in full force and effect applicable
to all Liabilities until both (a) all Liabilities have been paid and/or
satisfied in full and (b) the security interest created herein is specifically
terminated in writing by a duly authorized officer of the Administrative Agent.
(b) While the Administrative Agent's rights in and to all Deposit
Accounts (in which proceeds of Inventory and Accounts are deposited), money, and
cash are limited to those items arising from, relating to, or constituting
proceeds of Accounts and Inventory, the Administrative Agent and the Revolving
Credit Lenders shall not be bound to inquire into the source of any funds
deposited into a DDA, a Blocked Account or the Concentration Account by the
Borrowers. Any amounts so deposited by the Borrowers shall conclusively be
presumed to be proceeds of the Collateral and the Administrative Agent and the
Revolving Credit Lenders shall not be under any liability or responsibility to
determine whether the funds so deposited constitute proceeds of the Collateral.
(c) It is intended that, with respect to any term used herein to
describe Collateral, which term is defined in either (or both) the UCC as in
effect on the date when this Agreement was executed by the Borrowers or in
UCC9'99, the meaning given that term shall be the more encompassing of the two
definitions.
ARTICLE 9 - ADMINISTRATIVE AGENT AS BORROWER'S ATTORNEY-IN-FACT:
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91 -APPOINTMENT AS ATTORNEY-IN-FACT. Each Borrower hereby irrevocably
constitutes and appoints the Administrative Agent as that (acting through any of
its officers) Borrower's true and lawful attorney, with full power of
substitution, during the existence of an Event of Default, to convert the
Collateral into cash at the sole risk, cost, and expense of that Borrower, but
for the sole benefit of the Administrative Agent and the Revolving Credit
Lenders. The rights and powers granted the Administrative Agent by this
appointment include but are not limited to the right and power to:
(a) Prosecute, defend, compromise, or release any action relating to
the Collateral.
(b) Sign change of address forms to change the address to which each
Borrower's mail is to be sent to such address as the Administrative Agent shall
designate; receive and open each Borrower's mail; remove any Receivables
Collateral and Proceeds of Collateral therefrom and turn over the balance of
such mail either to the Lead Borrower or to any trustee in bankruptcy or
receiver of the Lead Borrower, or other legal representative of a Borrower whom
the Administrative Agent determines to be the appropriate person to whom to so
turn over such mail.
(c) Endorse the name of the relevant Borrower in favor of the
Administrative Agent upon any and all checks, drafts, notes, acceptances, or
other items or instruments; sign and endorse the name of the relevant Borrower
on, and receive as secured party, any of the Collateral, any invoices, schedules
of Collateral, freight or express receipts, or bills of lading, storage
receipts, warehouse receipts, or other documents of title respectively relating
to the Collateral.
(d) Sign the name of the relevant Borrower on any notice to that
Borrower's Account Debtors or verification of the Receivables Collateral; sign
the relevant Borrower's name on any Proof of Claim in Bankruptcy against Account
Debtors, and on notices of lien, claims of mechanic's liens, or assignments or
releases of mechanic's liens securing the Accounts.
(e) Take all such action as may be necessary to obtain the payment of
any letter of credit and/or banker's acceptance of which any Borrower is a
beneficiary.
(f) Repair, manufacture, assemble, complete, package, deliver, alter or
supply goods, if any, necessary to fulfill in whole or in part the purchase
order of any customer of each Borrower.
92 -NO OBLIGATION TO ACT. The Administrative Agent shall not be
obligated to do any of the acts or to exercise any of the powers authorized by
Section 9-1 herein, but if the Administrative Agent elects to do any such act or
to exercise any of such powers, it shall not be accountable for more than it
actually receives as a result of such exercise of power, and shall not be
responsible to any Borrower for any act or omission to act except for any act or
omission to act as to which there is a final determination made in a judicial
proceeding (in which proceeding the Administrative Agent has had an opportunity
to be heard) which determination includes a
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specific finding that the subject act or omission to act had been grossly
negligent or in actual bad faith.
ARTICLE 10 - EVENTS OF DEFAULT:
The occurrence of any event described in this Article 10 respectively
shall constitute an "EVENT OF Default" herein. Upon the occurrence of any Event
of Default described in Section 10-10, any and all Liabilities shall become due
and payable without any further act on the part of the Administrative Agent.
During the existence of any other Event of Default, the Administrative Agent
may, and on the instruction of the Majority Lenders as provided in Section
13-1(b) shall, declare any and all Liabilities shall become immediately due and
payable. The existence of any Event of Default shall also constitute, without
notice or demand, a default under all other agreements between the
Administrative Agent or any Revolving Credit Lender and any Borrower and
instruments and papers heretofore, now, or hereafter given the Administrative
Agent or any Revolving Credit Lender by any Borrower.
101 -FAILURE TO PAY THE REVOLVING CREDIT. The failure by any Borrower
to pay when due any principal of the Revolving Credit (including, without
limitation, any reimbursement for any drawing under any L/C).
102 -FAILURE TO MAKE OTHER PAYMENTS. The failure by any Borrower to pay
when due (or upon demand, if payable on demand) any interest on, or fees in
respect of, the Revolving Credit (including, without limitation, L/C fees) or
any other payment Liability (other than any payment liability on account of the
principal of the Revolving Credit), which failure continues for five (5)
Business Days.
103 -FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD) . The
failure by any Borrower to promptly, punctually, faithfully and timely perform,
discharge, or comply with any covenant or Liability included in any of the
following provisions hereof:
Section Relates to:
-----------------------
4-6 Encumbrances
4-7 Indebtedness
4-19 Dividends. Investments. Other Corporate
Actions
5-11 Financial Performance Covenant
7-4 Proceeds and Collections
104 -FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD). (a) The
failure by the Borrowers to promptly, punctually, faithfully and timely perform,
discharge, or comply with the provisions of Section 4-14, which failure
continues for five (5) days after the Lead Borrower's receipt of written notice
from the Administrative Agent.
(b) The failure by the Borrowers to promptly, punctually, faithfully
and timely perform, discharge, or comply with the provisions of Article 5, which
failure continues for ten (10) Business Days after the Lead Borrower's receipt
of written notice from the Administrative Agent, provided, however, the
foregoing grace period shall not apply to the following
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requirements; rather such requirements shall have the benefit of only the
following grace periods:
--------------------------------------------------------------------------------------------------------------------
REPORT / STATEMENT REQUIRED BY GRACE PERIOD NUMBER OF GRACE PERIODS
SECTION
--------------------------------------------------------------------------------------------------------------------
Borrowing Base Certificates 5-4 One Business Day Three in any 12 months
--------------------------------------------------------------------------------------------------------------------
Monthly Reports 5-5 Three Business Days Three in any 12 months
--------------------------------------------------------------------------------------------------------------------
Quarterly Reports 5-6 Five Business Days Two in any 12 months
--------------------------------------------------------------------------------------------------------------------
Annual Reports 5-7 Ten Business Days One in any 12 months
--------------------------------------------------------------------------------------------------------------------
(c) The failure by any Borrower to perform any covenants under any Loan
Document or any other Liabilities, in each case not described in any of Sections
10-1, 10-2, 10-3, 10-4(a) or 10-4(b), which failure continues for twenty (20)
days following the Lead Borrower's receipt of written notice from the
Administrative Agent of the breach of any such covenants or Liabilities.
105 -MISREPRESENTATION. The determination by the Administrative Agent
that any representation or warranty at any time made by any Borrower to the
Administrative Agent or any Revolving Credit Lender was not true or complete in
all material respects when given.
106 -ACCELERATION OF OTHER DEBT. BREACH OF LEASE.
(a) The occurrence of any event such that any Indebtedness of any
Borrower in excess of $20,000,000.00 to any creditor other than the
Administrative Agent or any Revolving Credit Lender could be accelerated
(whether or not the subject creditor takes any action on account of such
occurrence).
(b) The termination of any Lease as the result of a default thereunder,
which termination individually or in the aggregate with all other Lease
terminations after the date hereof could reasonably be expected to have a
materially adverse effect on the Borrowers' business or financial condition,
taken as a whole.
107 -UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss,
theft, damage, or destruction of or to any material portion of the Collateral in
excess of $20,000,000.00 in any fiscal year of the Borrowers.
108 -ATTACHMENT. JUDGMENT. RESTRAINT OF BUSINESS.
(a) The service of process upon the Administrative Agent or any
Revolving Credit Lender or any Participant seeking to attach, by trustee or
other process, any funds of any Borrower on deposit with, or assets of any
Borrower in the possession of, the Administrative
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Agent or that Revolving Credit or such Participant unless contested in good
faith by the Borrower in appropriate proceedings.
(b) The entry of any judgment against any Borrower, which, when
aggregated with all other such judgments exceeds $20,000,000.00 (unless
adequately insured by a solvent unaffiliated insurance company that has
acknowledged coverage), and which judgment is not satisfied (if a money
judgment), bonded, or appealed from (with execution or similar process stayed)
within thirty (30) days of its entry.
(c) The entry of any order or the imposition of any other process
having the force of law, the effect of which is to restrain in any material way
the conduct by any Borrower of its business in the ordinary course and which has
a material adverse effect on the business or assets of the Borrowers taken as a
whole.
109 -BUSINESS FAILURE. Any act by, against, or relating to any
Borrower, or its property or assets, which act constitutes the determination, by
any Borrower, to initiate a program of substantial or total self-liquidation;
application for, consent to, or sufferance of the appointment of a receiver,
trustee, or other person, pursuant to court action or otherwise, over all, or
any part of any Borrower's property; the granting of any trust mortgage or
execution of an assignment for the benefit of the creditors of any Borrower, or
the occurrence of any other voluntary or involuntary liquidation or extension of
debt agreement for any Borrower; the offering by or entering into by any
Borrower of any composition, extension, or any other arrangement seeking relief
from or extension of the debts of any Borrower; or the initiation of any
judicial or non-judicial proceeding or agreement by, against, or including any
Borrower which seeks or intends to accomplish a reorganization or arrangement
with creditors; and/or the initiation by or on behalf of any Borrower of the
liquidation or winding up of all or any substantial part of any Borrower's
business or operations; provided that if any of the foregoing is commenced
against a Borrower, no Event of Default shall be deemed to have arisen hereunder
if such action is timely contested in good faith by that Borrower by appropriate
proceedings and is terminated or dismissed within sixty (60) days of when
commenced.
1010 -BANKRUPTCY. The failure by any Borrower to generally pay the
debts of that Borrower as they mature; adjudication of bankruptcy or insolvency
relative to any Borrower; the entry of an order for relief or similar order with
respect to any Borrower in any proceeding pursuant to the Bankruptcy Code or any
other federal bankruptcy law; the filing of any complaint, application, or
petition by any Borrower initiating any matter in which any Borrower is or may
be granted any relief from the debts of that Borrower pursuant to the Bankruptcy
Code or any other insolvency statute or procedure; the filing of any complaint,
application, or petition against any Borrower initiating any matter in which
that Borrower is or may be granted any relief from the debts of that Borrower
pursuant to the Bankruptcy Code or any other insolvency statute or procedure,
which complaint, application, or petition is not timely contested in good faith
by that Borrower by appropriate proceedings or, if so contested, is not
dismissed within sixty (60) days of when filed.
1011 -INDICTMENT - FORFEITURE. The indictment of, or institution of any
legal process or proceeding against, any Borrower, under any Applicable Law
where the relief,
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penalties, or remedies sought or available include the forfeiture of any
property of any Borrower and/or the imposition of any stay or other order, the
effect of which would reasonably be expected to have a material adverse effect
on the business or assets of the Borrowers taken as a whole.
1012 -CHALLENGE TO LOAN DOCUMENTS.
(a) Any challenge by or on behalf of any Borrower of the Liabilities to
the validity of any Loan Document or the applicability or enforceability of any
Loan Document strictly in accordance with the subject Loan Document's material
terms or which seeks to void, avoid, limit, or otherwise adversely affect any
security interest created by or in any Loan Document or any payment made
pursuant thereto.
(b) Any determination by any court or any other judicial or government
authority that any Loan Document is not enforceable strictly in accordance with
the subject Loan Document's material terms or which voids, avoids, limits, or
otherwise adversely affects any security interest created by any Loan Document
or any payment made pursuant thereto.
1013 -CHANGE IN CONTROL. Any Change in Control.
1014 - DEFAULT UNDER ASSOCIATES AGREEMENT. The occurrence of any
default by the Lead Borrower under the Amended and Restated Merchant Services
Agreement dated October 1, 2000 between Associates Capital Bank and the Lead
Borrower (as amended and in effect) pursuant to which the Lead Borrower becomes
obligated to pay an amount greater than or equal to $50,000,000.00 to Associates
Capital Bank (including its successors or assigns) thereunder unless prior to
and after giving effect to such payment, Availability is at least
$200,000,000.00 and Availability is projected on a pro forma basis to be at
least $200,000,000.00 for the two Fiscal quarters immediately following such
payment.
ARTICLE 11 - RIGHTS AND REMEDIES UPON DEFAULT:
111 -ACCELERATION. During the existence of any Event of Default as
described in Section 10-10, the Revolving Credit Commitments shall be terminated
and all Liabilities of the Borrower to the Revolving Credit Lenders shall be
immediately due and payable. During the existence of any Event of Default other
than as described in Section 10-10, the Administrative Agent may (and on the
issuance of Notice(s) of Acceleration, the Administrative Agent shall) terminate
the Revolving Credit Commitments and declare all Liabilities of the Borrower to
the Revolving Credit Lenders to be immediately due and payable and may exercise
all of the Administrative Agent's Rights and Remedies as the Administrative
Agent from time to time thereafter determines as appropriate.
112 -RIGHTS OF ENFORCEMENT. During the existence of any Event of
Default, the Administrative Agent shall have all of the rights and remedies of a
secured party upon default under the UCC, in addition to which the
Administrative Agent shall have all and each of the following rights and
remedies:
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(a) To give notice to any bank at which any DDA or Blocked Account is
maintained and in which Proceeds of Collateral are deposited, to turn over such
Proceeds directly to the Administrative Agent.
(b) Subject to the rights, if any, of Huntington National Bank under
the intercreditor agreement described in Section 3-3 hereof, to give notice to
any customs broker of any of the Borrowers to follow the instructions of the
Administrative Agent as provided in any written agreement or undertaking of such
broker in favor of the Administrative Agent.
(c) To collect the Receivables Collateral with or without the taking of
possession of any of the Collateral.
(d) To take possession of all or any portion of the Collateral.
(e) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or processing as
the Administrative Agent deems advisable and with or without the taking of
possession of any of the Collateral.
(f) To conduct one or more going out of business sales which include
the sale or other disposition of the Collateral, subject to the rights of
lessors under any Leases and applicable law.
(g) To apply the Proceeds of the Collateral in reduction of the
Liabilities.
(h) To exercise all or any of the rights, remedies, powers, privileges,
and discretions under all or any of the Loan Documents.
113 -SALE OF COLLATERAL.
(a) Any sale or other disposition of the Collateral may be at public or
private sale upon such terms and in such manner as the Administrative Agent
deems advisable, having due regard to compliance with any statute or regulation
which might affect, limit, or apply to the Administrative Agent's disposition of
the Collateral.
(b) The Administrative Agent, in the exercise of the Administrative
Agent's rights and remedies during the existence of an Event of Default, may
conduct one or more going out of business sales, in the Administrative Agent's
own right or by one or more agents and contractors. Such sale(s) may be
conducted upon any premises owned, leased, or occupied by any Borrower, subject
to the rights of lessors under any Leases and applicable law.
(c) Unless the Collateral is perishable or threatens to decline
speedily in value, or is of a type customarily sold on a recognized market (in
which event the Administrative Agent shall provide the Lead Borrower such notice
as may be practicable under the circumstances), the Administrative Agent shall
give the Lead Borrower at least ten (10) days prior written notice of the date,
time, and place of any proposed public sale, and of the date after which any
private sale or other disposition of the Collateral may be made. Each Borrower
agrees
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that such written notice shall satisfy all requirements for notice to that
Borrower which are imposed under the UCC or other applicable law with respect to
the exercise of the Administrative Agent's rights and remedies upon default.
(d) The Administrative Agent and any Revolving Credit Lender may
purchase the Collateral, or any portion of it at any sale held under this
Article.
(e) If any of the Collateral is sold, leased, or otherwise disposed of
by the Administrative Agent on credit, the Liabilities shall not be deemed to
have been reduced as a result thereof unless and until payment is finally
received thereon by the Administrative Agent.
(f) The Administrative Agent shall apply the proceeds of the
Administrative Agent's exercise of its rights and remedies upon default pursuant
to this Article 11 in accordance with Sections 13-6 and 13-7.
114 -OCCUPATION OF BUSINESS LOCATION. In connection with the
Administrative Agent's exercise of the Administrative Agent's rights under this
Article 11, during the existence of an Event of Default, the Administrative
Agent may enter upon, occupy, and use any premises owned or occupied by each
Borrower, subject to the rights of lessors under any Leases and applicable law,
and may exclude each Borrower from such premises or portion thereof as may have
been so entered upon, occupied, or used by the Administrative Agent. The
Administrative Agent shall not be required to remove any of the Collateral from
any such premises upon the Administrative Agent's taking possession thereof, and
may render any Collateral unusable to the Borrowers. In no event shall the
Administrative Agent be liable to any Borrower for use or occupancy by the
Administrative Agent of any premises pursuant to this Article 11, nor for any
charge (such as wages for any Borrower's employees and utilities) incurred in
connection with the Administrative Agent's exercise of the Administrative
Agent's Rights and Remedies.
115 -GRANT OF NONEXCLUSIVE LICENSE. Each Borrower hereby grants to the
Administrative Agent a royalty free nonexclusive irrevocable license during the
existence of an Event of Default and subject to the rights of any third Person
(including, without limitation, any lessor under a Lease) and Applicable Law (a)
to use, apply, and affix any trademark, trade name, logo, or the like in which
any Borrower now or hereafter has rights, such license being with respect to the
Administrative Agent's exercise of the rights hereunder including, without
limitation, in connection with any completion of the sale or other disposition
of Inventory, and (b) to use any or all furniture, fixtures and equipment
located at any of the stores or other leased facilities of the Borrowers in
connection with any completion of the sale or other disposition of Inventory,
and (c) to use any or all intellectual property, general intangibles (including,
without limitation, the Borrowers' trade names), books, records, and information
relating to the Collateral and/or to the operation of each Borrower's business,
and all rights of access to such books, records, and information, and all
property in which such books, records, and information are stored, recorded, and
maintained, and other assets of each Borrower.
116 -ASSEMBLY OF COLLATERAL. The Administrative Agent may require any
Borrower to assemble the Collateral and make it available to the Administrative
Agent at the
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Borrowers' sole risk and expense at a place or places which are reasonably
convenient to both the Administrative Agent and the Lead Borrower.
117 -RIGHTS AND REMEDIES. The rights, remedies, powers, privileges, and
discretions of the Administrative Agent hereunder (herein, the "ADMINISTRATIVE
AGENT'S RIGHTS AND REMEDIES") shall be cumulative and not exclusive of any
rights or remedies which it would otherwise have. No delay or omission by the
Administrative Agent in exercising or enforcing any of the Administrative
Agent's Rights and Remedies shall operate as, or constitute, a waiver thereof.
No waiver by the Administrative Agent of any Event of Default or of any default
under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of any of
the Administrative Agent's Rights or Remedies, and no express or implied
agreement or transaction of whatever nature entered into between the
Administrative Agent and any person, at any time, shall preclude the other or
further exercise of the Administrative Agent's Rights and Remedies. No waiver by
the Administrative Agent of any of the Administrative Agent's Rights and
Remedies on any one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a continuing waiver. The Administrative Agent's
Rights and Remedies may be exercised at such time or times and in such order of
preference as the Administrative Agent may determine. The Administrative Agent's
Rights and Remedies may be exercised without resort or regard to any other
source of satisfaction of the Liabilities.
ARTICLE 12 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:
121 -REVOLVING CREDIT FUNDING PROCEDURES. Subject to Section 12-2:
(a) The Administrative Agent shall advise each Revolving Credit Lender,
no later than 1:30PM on a date on which any Revolving Credit Loan (other than a
SwingLine Loan) is to be made on that date. Such advice, in each instance, may
be by telephone or facsimile transmission, provided that if such advice is by
telephone, it shall be confirmed in writing. Advice of a Revolving Credit Loan
shall include the amount of and interest rate applicable to the subject
Revolving Credit Loan.
(b) Subject to that Revolving Credit Lender's Revolving Credit
Commitment, each Revolving Credit Lender, by no later than the end of business
on the day on which the subject Revolving Credit Loan is to be made, shall
Transfer that Revolving Credit Lender's Revolving Credit Commitment Percentage
of the subject Revolving Credit Loan to the Administrative Agent.
122 -SWINGLINE LOANS.
(a) In the event that, when a Revolving Credit Loan is requested, the
aggregate unpaid balance of the SwingLine Loan is less than the SwingLine Loan
Ceiling, then the SwingLine Lender may advise the Administrative Agent that the
SwingLine Lender has determined to include up to the amount of the requested
Revolving Credit Loan as part of the SwingLine Loan. In such event, the
SwingLine Lender shall Transfer the amount of the requested Revolving Credit
Loan to the Administrative Agent.
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(b) The SwingLine Loan shall be converted to a Revolving Credit Loan in
which all Revolving Credit Lenders participate as follows:
(ii) At any time and from time to time, the SwingLine Lender
may advise the Administrative Agent that all, or any part of
the SwingLine Loan is to be converted to a Revolving Credit
Loan in which all Revolving Credit Lenders participate.
(iii) At the initiation of a Liquidation, the then entire
unpaid principal balance of the SwingLine Loan shall be
converted to a Revolving Credit Loan in which all Revolving
Credit Lenders participate.
In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if such
conversion were the making of a Revolving Credit Loan as provided in Section
12-1.
(a) The SwingLine Lender, in separate capacities, may also be the
Administrative Agent and a Revolving Credit Lender.
(b) The SwingLine Lender, in its capacity as SwingLine Lender, is not a
"Revolving Credit Lender" for any of the following purposes:
(iv) Except as otherwise specifically provided in the relevant
Section, any distribution pursuant to Section 13-6.
(v) Determination of whether the requisite Revolving Credit
Commitments have Consented to action requiring such Consent.
123 -ADMINISTRATIVE AGENT'S COVERING OF FUNDINGS:
(a) Each Revolving Credit Lender shall make available to the
Administrative Agent, as provided herein, that Revolving Credit Lender's
Revolving Credit Commitment Percentage of the following:
(ii) Each Revolving Credit Loan, up to the maximum amount of
that Revolving Credit Lender's Revolving Credit Commitment of
the Revolving Credit Loans.
(iii) Up to the maximum amount of that Revolving Credit
Lender's Revolving Credit Commitment of each L/C Drawing (to
the extent that such L/C Drawing is not "covered" by a
Revolving Credit Loan as provided herein).
(a) In all circumstances, the Administrative Agent may:
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(iv) Assume that each Revolving Credit Lender, subject to
Section 12-3(a), timely shall make available to the
Administrative Agent that Revolving Credit Lender's Revolving
Credit Commitment Percentage of each Revolving Credit Loan,
notice of which is provided pursuant to Section 12-1.
(v) In reliance upon such assumption, make available the
corresponding amount to the Borrowers.
(vi) Assume that each Revolving Credit Lender timely shall
pay, and shall make available, to the Administrative Agent all
other amounts which that Revolving Credit Lender is obligated
to so pay and/or make available hereunder or under any of the
Loan Documents.
(a) In the event that, in reliance upon any of such assumptions, the
Administrative Agent makes available, a Revolving Credit Lender's Revolving
Credit Commitment Percentage of one or more Revolving Credit Loans, or any other
amount to be made available hereunder or under any of the Loan Documents, which
amount a Revolving Credit Lender (a "DELINQUENT REVOLVING CREDIT LENDER") fails
to provide to the Administrative Agent within one (1) Business Day of written
notice of such failure, then:
(vii) The amount which had been made available by the
Administrative Agent is an " ADMINISTRATIVE AGENT'S COVER"
(and is so referred to herein).
(viii) All interest paid by the Borrowers on account of the
Revolving Credit Loan or coverage of the subject L/C Drawing
which consist of the Administrative Agent's Cover shall be
retained by the Administrative Agent until the Administrative
Agent's Cover, with interest, has been paid.
(ix) The Delinquent Revolving Credit Lender shall pay to the
Administrative Agent, on demand, interest at a rate equal to
the prevailing federal funds rate on any Administrative
Agent's Cover in respect of that Delinquent Revolving Credit
Lender
(x) The Administrative Agent shall have succeeded to all
rights to payment to which the Delinquent Revolving Credit
Lender otherwise would have been entitled hereunder in respect
of those amounts paid by or in respect of the Borrowers on
account of the Administrative Agent's Cover together with
interest until it is repaid. Such payments shall be deemed
made first towards the amounts in respect of which the
Administrative Agent's Cover was provided and only then
towards amounts in which the Delinquent Revolving Credit
Lender is then participating. For purposes of
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distributions to be made pursuant to Section 12-4(a) (which
relates to ordinary course distributions) or Section 13-6
(which relates to distributions of proceeds of a Liquidation)
below, amounts shall be deemed distributable to a Delinquent
Revolving Credit Lender (and consequently, to the
Administrative Agent to the extent to which the Administrative
Agent is then entitled) at the highest level of distribution
(if applicable) at which the Delinquent Revolving Credit
Lender would otherwise have been entitled to a distribution.
(xi) Subject to Subsection 12-3(c)(iv), the Delinquent
Revolving Credit Lender shall be entitled to receive any
payments from the Borrowers to which the Delinquent Revolving
Credit Lender is then entitled, provided however there shall
be deducted from such amount and retained by the
Administrative Agent any interest to which the Administrative
Agent is then entitled on account of Section 12-3(c)(ii),
above.
(a) A Delinquent Revolving Credit Lender shall not be relieved of any
obligation of such Delinquent Revolving Credit Lender hereunder (all and each of
which shall constitute continuing obligations on the part of any Delinquent
Revolving Credit Lender).
(b) A Delinquent Revolving Credit Lender may cure its status as a
Delinquent Revolving Credit Lender by paying the Administrative Agent the
aggregate of the following:
(xii) The Administrative Agent's Cover (to the extent not
previously repaid by the Borrowers and retained by the
Administrative Agent in accordance with Subsection
12-3(c)(iv), above) with respect to that Delinquent Revolving
Credit Lender.
Plus
(xiii) The aggregate of the amount payable under Subsection
12-3(c)(iii), above (which relates to interest to be paid by
that Delinquent Revolving Credit Lender).
Plus
(xiv) All such costs and expenses as may be incurred by the
Administrative Agent in the enforcement of the Administrative
Agent's rights against such Delinquent Revolving Credit
Lender.
124 -ORDINARY COURSE DISTRIBUTIONS. (This Section 12-4 applies, and
sets forth rights and obligations amongst the Lenders only, unless the
provisions of Section 13-6 (which relates to distributions in the event of a
Liquidation) becomes operative).
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(a) Weekly, on such day as may be set from time to time by the
Administrative Agent (or more frequently at the Administrative Agent's option)
the Administrative Agent and each Revolving Credit Lender shall settle up on
amounts advanced under the Revolving Credit and collected funds received in the
Concentration Account or otherwise paid by the Borrowers.
(b) The Administrative Agent shall distribute to the SwingLine Lender
and to each Revolving Credit Lender, such Person's respective pro-rata share of
interest payments on the Revolving Credit Loans when actually received and
collected by the Administrative Agent (excluding the one Business Days for
settlement provided for in Section 7-5(a), which shall be for the account of the
Administrative Agent only). For purposes of calculating interest due to a
Revolving Credit Lender, that Revolving Credit Lender shall be entitled to
receive interest on the actual amount contributed by that Revolving Credit
Lender towards the principal balance of the Revolving Credit Loans outstanding
during the applicable period covered by the interest payment made by the
Borrowers. Any net principal reductions to the Revolving Credit Loans received
by the Administrative Agent in accordance with the Loan Documents during such
period shall not reduce such actual amount so contributed, for purposes of
calculation of interest due to that Revolving Credit Lender, until the
Administrative Agent has distributed to that Revolving Credit Lender its
pro-rata share thereof.
(c) The Administrative Agent shall distribute Revolving Credit Early
Termination Fees, L/C fees, and, except as otherwise provided in Section 2-15,
Line Fees paid on account of the Revolving Credit to the Revolving Credit
Lenders pro rata based upon their respective Revolving Credit Commitment
Percentages.
(d) No Revolving Credit Lender shall have any interest in, or right to
receive any part of, the Revolving Credit Commitment Fee or the Administrative
Agent's Fee to be paid by the Borrowers to the Administrative Agent pursuant to
this Agreement. Each Revolving Credit Lender shall be paid such fees upon
becoming a Revolving Credit Lender hereunder as may be agreed between such
Revolving Credit Lender and the Arranger.
(e) Any amount received by the Administrative Agent as reimbursement
for any cost or expense (including without limitation, attorneys' reasonable
fees) shall be distributed by the Administrative Agent to that Person which is
entitled to such reimbursement as provided in this Agreement (and if such
Person(s) is (are) the Revolving Credit Lenders, pro-rata based upon their
respective Revolving Credit Commitment Percentages at the date on which the
expense, in respect of which such reimbursement is being made, was incurred).
(f) Each distribution pursuant to this Section 12-4 is subject to
Section 12-3(c), above.
ARTICLE 13 - ACCELERATION AND LIQUIDATION:
131 -ACCELERATION NOTICES
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(a) The Administrative Agent may give the Revolving Credit Lenders a
Notice of Acceleration at any time during the existence of an Event of Default.
(b) The Majority Lenders may give the Administrative Agent a Notice of
Acceleration at any time during the existence of an Event of Default. Such
notice may be by multiple counterparts.
132 -ACCELERATION Unless stayed by judicial or statutory process, the
Administrative Agent shall accelerate the time for payment of the Liabilities
and declare the Liabilities immediately due and payable in full within a
commercially reasonable time following:
(a) The Administrative Agent's giving of a Notice of Acceleration to
the Revolving Credit Lenders as provided in Section 13-1(a).
(b) The Administrative Agent's receipt of a Notice of Acceleration from
the Majority Lenders, in compliance with Section 13-1(b) .
133 -INITIATION OF LIQUIDATION Unless stayed by judicial or statutory
process, a Liquidation shall be initiated by the Administrative Agent within a
commercially reasonable time following acceleration of the Liabilities.
134 -ACTIONS AT AND FOLLOWING INITIATION OF LIQUIDATION
(a) At the initiation of a Liquidation:
(ii) The unpaid principal balance of the SwingLine Loan (if
any) shall be converted, pursuant to Section 12-2(b)(ii), to a
Revolving Credit Loan in which all Revolving Credit Lenders
participate.
(iii) The Administrative Agent and the Revolving Credit
Lenders shall "net out" each Revolving Credit Lender's
respective contributions towards the Revolving Credit Loans,
so that each Revolving Credit Lender holds that Revolving
Credit Lender's Revolving Credit Commitment Percentage of the
Revolving Credit Loans and advances.
(a) Following the initiation of a Liquidation, each Revolving Credit
Lender shall contribute, towards any L/C thereafter honored and not immediately
reimbursed by the Borrowers, that Revolving Credit Lender's Revolving Credit
Commitment Percentage of such honoring.
135 -ADMINISTRATIVE AGENT'S CONDUCT OF LIQUIDATION
(a) Any Liquidation shall be conducted by the Administrative Agent,
with the advice and assistance of the Revolving Credit Lenders.
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(b) The Administrative Agent may establish one or more Nominees to "bid
in" or otherwise acquire ownership to any Post Foreclosure Asset, provided that
the Administrative Agent may "bid in" for any such assets only at such prices as
may be directed by the Majority Lenders.
(c) The Administrative Agent shall manage the Nominee and manage and
dispose of any Post Foreclosure Assets with a view towards the realization of
the economic benefits of the ownership of the Post Foreclosure Assets and in
such regard, the Administrative Agent and/or the Nominee may operate, repair,
manage, maintain, develop, and dispose of any Post Foreclosure Asset in such
manner as the Administrative Agent determines as appropriate under the
circumstances.
(d) The Administrative Agent may decline to undertake or to continue
taking a course of action or to execute an action plan (whether proposed by the
Administrative Agent or any Revolving Credit Lender) unless indemnified to the
Administrative Agent's satisfaction by the Revolving Credit Lenders against any
and all liability and expense which may be incurred by the Administrative Agent
by reason of taking or continuing to take that course of action or action plan.
(e) Each Revolving Credit Lender shall execute all such instruments and
documents not inconsistent with the provisions of this Agreement as the
Administrative Agent and/or the Nominee reasonably may request with respect to
the creation and governance of any Nominee, the conduct of the Liquidation, and
the management and disposition of any Post Foreclosure Asset.
136 -DISTRIBUTION OF LIQUIDATION PROCEEDS:
(a) During the existence of an Event of Default, the Administrative
Agent may establish one or more reasonably funded reserve accounts into which
proceeds of the conduct of any Liquidation may be deposited in anticipation of
future expenses which may be incurred by the Administrative Agent in the
exercise of rights as a secured creditor of the Borrowers and prior claims which
the Administrative Agent reasonably anticipates may need to be paid.
(b) The Administrative Agent shall distribute the net proceeds of
Liquidation in accordance with the relative priorities set forth in Section
13-7.
(c) Each Revolving Credit Lender, on the written request of the
Administrative Agent and/or any Nominee, not more frequently than once each
month, shall reimburse the Administrative Agent and/or any Nominee, Pro-Rata,
for any cost or expense reasonably incurred by the Administrative Agent and/or
the Nominee in the conduct of a Liquidation, which amount is not covered out of
current proceeds of the Liquidation, which reimbursement shall be paid over to
and distributed by the Administrative Agent.
137 -RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION The relative
priorities to the proceeds of a Liquidation are as follows:
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(a) To the Administrative Agent as reimbursement for all reasonable
third party costs and expenses incurred by the Administrative Agent and to
Lenders' Special Counsel and to any funded reserve established pursuant to
Section 13-6(a); and then
(b) To the SwingLine Lender, on account of any SwingLine loans not
converted to Revolving Credit Loans pursuant to Section 13-4(a)(i); and then
(c) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), pro-rata, to the unpaid principal balance of the
Revolving Credit; and then
(d) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), pro-rata, to accrued interest on the Revolving Credit;
and then
(e) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), pro-rata, to those fees distributable hereunder to the
Revolving Credit Lenders; and then
(f) To any Delinquent Revolving Credit Lenders, pro-rata to amounts to
which such Revolving Credit Lenders otherwise would have been entitled pursuant
to Sections 13-7(c), 13-7(d), 1313-7(e)13-7(e); and then
(g) To the Revolving Credit Lenders, pro-rata, to the extent of the
Revolving Credit Early Termination Fee; and then
(h) To any other Liabilities then outstanding (including, without
limitation on account of any claims then threatened or asserted against the
Administrative Agent, the Issuing Bank, or any Revolving Credit Lender for which
the Borrowers are obligated to provide an indemnity).
(i) To the Lead Borrower.
ARTICLE 14 - THE ADMINISTRATIVE AGENT:
141 -APPOINTMENT OF THE ADMINISTRATIVE AGENT
(a) Each Lender appoints and designates Fleet Retail Finance Inc. as
the "Administrative Agent" hereunder and under the Loan Documents.
(b) Each Revolving Credit Lender authorizes the Administrative Agent:
(ii) To execute those of the Loan Documents and all other
instruments relating thereto to which the Administrative Agent
is a party.
(iii) To take such action on behalf of the Revolving Credit
Lenders and to exercise all such powers as are expressly
delegated to the Administrative Agent hereunder and in the
Loan Documents and
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all related documents, together with such other powers as are
reasonably incident thereto.
142 -RESPONSIBILITIES OF ADMINISTRATIVE AGENT ; OTHER AGENTS
(a) The Administrative Agent shall not have any duties or
responsibilities to, or any fiduciary relationship with, any Revolving Credit
Lender except for those expressly set forth in this Agreement.
(b) Neither the Administrative Agent nor any of its Affiliates shall be
responsible to any Revolving Credit Lender for any of the following:
(ii) Any recitals, statements, representations or warranties
made by any Borrower or any other Person.
(iii) Any appraisals or other assessments of the assets of any
Borrower or of any other Person responsible for or on account
of the Liabilities.
(iv) The value, validity, effectiveness, genuineness,
enforceability, or sufficiency of the Loan Agreement, the Loan
Documents or any other document referred to or provided for
therein.
(v) Any failure by any Borrower or any other Person (other
than the Administrative Agent) to perform its obligations
under the Loan Documents.
(a) The Administrative Agent may employ attorneys, accountants, and
other professionals and agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such attorneys, accountants,
and other professionals or agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care. No such attorney, accountant, other
professional, agent, or attorney-in-fact shall be responsible for any action
taken or omitted to be taken by any other such Person.
(b) Neither the Administrative Agent, nor any of its directors,
officers, or employees shall be responsible for any action taken or omitted to
be taken or omitted to be taken by any other of them in connection herewith in
reliance upon advice of its counsel nor, in any other event except for any
action taken or omitted to be taken as to which a final judicial determination
has been or is made (in a proceeding in which such Person has had an opportunity
to be heard) that such Person had acted in a grossly negligent manner, in actual
bad faith, or in willful misconduct.
(c) The Administrative Agent shall not have any responsibility in any
event for more funds than the Administrative Agent actually receives and
collects.
(d) The Administrative Agent, in its separate capacity as a Lender,
shall have the same rights and powers hereunder as any other Lender.
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(e) None of the Documentation Agents, the Syndication Agent, or the
Co-Agents shall have any powers, rights, duties, responsibilities, or
liabilities with respect to this Agreement and the other Loan Documents.
143 -CONCERNING DISTRIBUTIONS BY THE ADMINISTRATIVE AGENT
(a) The Administrative Agent in the Administrative Agent's reasonable
discretion based upon the Administrative Agent's determination of the likelihood
that additional payments will be received, expenses incurred, and/or claims made
by third parties to all or a portion of such proceeds, may delay the
distribution of any payment received on account of the Liabilities.
(b) The Administrative Agent may disburse funds prior to determining
that the sums which the Administrative Agent expects to receive have been
finally and unconditionally paid to the Administrative Agent. If and to the
extent that the Administrative Agent does disburse funds and it later becomes
apparent that the Administrative Agent did not then receive a payment in an
amount equal to the sum paid out, then any Revolving Credit Lender to whom the
Administrative Agent made the funds available, on demand from the Administrative
Agent, shall refund to the Administrative Agent the sum paid to that person.
(c) If, in the opinion of the Administrative Agent, the distribution of
any amount received by the Administrative Agent might involve the Administrative
Agent in liability, or might be prohibited hereby, or might be questioned by any
Person, then the Administrative Agent may refrain from making distribution until
the Administrative Agent's right to make distribution has been adjudicated by a
court of competent jurisdiction.
(d) The proceeds of any Revolving Credit Lender's exercise of any right
of, or in the nature of, set-off shall be deemed, First, to the extent that a
Revolving Credit Lender is entitled to any distribution hereunder, to constitute
such distribution and Second, shall be shared with the other Revolving Credit
Lenders as if distributed pursuant to (and shall be deemed as distributions
under) Section 13-7.
(e) Each Revolving Credit Lender recognizes that the crediting of the
Borrowers with the "proceeds" of any transaction in which a Post Foreclosure
Asset is acquired is a non-cash transaction and that, in consequence, no
distribution of such "proceeds" will be made by the Administrative Agent to any
Lender.
(f) In the event that (x) a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Administrative Agent is
to be repaid or disgorged or (y) the Majority Lenders determine to effect such
repayment or disgorgement, then each Revolving Credit Lender to which any such
distribution shall have been made shall repay, to the Administrative Agent which
had made such distribution, that Revolving Credit Lender's Pro-Rata share of the
amount so adjudged or determined to be repaid or disgorged.
144 -DISPUTE RESOLUTION: Any dispute among the Revolving Credit Lenders
and/or the Administrative Agent concerning the interpretation, administration,
or enforcement of
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the financing arrangements contemplated by this or any other Loan Document or
the interpretation or administration of this or any other Loan Document which
cannot be resolved amicably shall be resolved in the United States District
Court for the District of Massachusetts, sitting in Boston or in the Superior
Court of Suffolk County, Massachusetts, to the jurisdiction of which courts each
Revolving Credit Lender hereto hereby submits.
145 -DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS The Administrative Agent
will forward to each Revolving Credit Lender, promptly after the Administrative
Agent's receipt thereof, a copy of each notice or other document furnished to
the Administrative Agent pursuant to this Agreement, including monthly,
quarterly, and annual financial statements received from the Lead Borrower
pursuant to Article 5 of this Agreement, other than any of the following:
(a) Routine communications associated with requests for Revolving
Credit Loans and/or the issuance of L/Cs.
(b) Routine or nonmaterial communications.
(c) Any notice or document of which the Administrative Agent has
knowledge that such notice or document had been forwarded to the Revolving
Credit Lenders other than by the Administrative Agent.
146 -CONFIDENTIAL INFORMATION
(a) Each Revolving Credit Lender will maintain, as confidential, all of
the following:
(ii) Proprietary approaches, techniques, and methods of
analysis which are applied by the Administrative Agent in the
administration of the credit facility contemplated by this
Agreement.
(iii) Proprietary forms and formats utilized by the
Administrative Agent in providing reports to the Revolving
Credit Lenders pursuant hereto, which forms or formats are not
of general currency.
(a) Nothing included herein shall prohibit the disclosure of any such
information as may be required to be provided by judicial process or by
regulatory authorities having jurisdiction over any party to this Agreement.
147 -RELIANCE BY ADMINISTRATIVE AGENT The Administrative Agent shall be
entitled to rely upon any certificate, notice or other document (including any
cable, telegram, telex, or facsimile) reasonably believed by the Administrative
Agent to be genuine and correct and to have been signed or sent by or on behalf
of the proper person or persons, and upon advice and statements of attorneys,
accountants and other experts selected by the Administrative Agent. As to any
matters not expressly provided for in this Agreement, any Loan Document, or in
any other document referred to therein, the Administrative Agent shall in all
events be fully protected in acting, or in refraining from acting, in accordance
with the applicable Consent required by this
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Agreement. Instructions given with the requisite Consent shall be binding on all
Revolving Credit Lenders.
148 -NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER REVOLVING CREDIT
LENDERS
(a) Each Revolving Credit Lender represents to all other Revolving
Credit Lenders and to the Administrative Agent that such Revolving Credit
Lender:
(ii) Independently and without reliance on any representation
or act by Administrative Agent or by any other Revolving
Credit Lender, and based on such documents and information as
that Revolving Credit Lender has deemed appropriate, has made
such Revolving Credit Lender's own appraisal of the financial
condition and affairs of the Borrowers and decision to enter
into this Agreement.
(iii) Has relied upon that Revolving Credit Lender's review of
the Loan Documents by that Revolving Credit Lender and by
counsel to that Revolving Credit Lender as that Revolving
Credit Lender deemed appropriate under the circumstances.
(a) Each Revolving Credit Lender agrees that such Revolving Credit
Lender, independently and without reliance upon Administrative Agent or any
other Revolving Credit Lender, and based upon such documents and information as
such Revolving Credit Lender shall deem appropriate at the time, will continue
to make such Revolving Credit Lender's own appraisals of the financial condition
and affairs of the Borrowers when determining whether to take or not to take any
discretionary action under this Agreement.
(b) The Administrative Agent, in the discharge of that Administrative
Agent's duties hereunder, shall not be required to make inquiry of, or to
inspect the properties or books of, any Person.
(c) Except for notices, reports, and other documents and information
expressly required to be furnished to the Revolving Credit Lenders by the
Administrative Agent hereunder (as to which, see Section 14-5), the
Administrative Agent shall not have any affirmative duty or responsibility to
provide any Lender with any credit or other information concerning any Person,
which information may come into the possession of Administrative Agent or any
Affiliate of the Administrative Agent.
(d) Each Revolving Credit Lender, at such Revolving Credit Lender's
request, shall have reasonable access to all nonprivileged documents in the
possession of the Administrative Agent, which documents relate to the
Administrative Agent's performance of its duties hereunder.
149 -INDEMNIFICATION Without limiting the liabilities of the Borrowers
under any this or any of the other Loan Documents, each Revolving Credit Lender
shall indemnify the
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Administrative Agent, pro rata based upon their respective Revolving Credit
Commitment Percentages, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including reasonable attorneys' fees and
expenses and other out-of-pocket expenditures) which may at any time be imposed
on, incurred by, or asserted against the Administrative Agent and in any way
relating to or arising out of this Agreement or any other Loan Document or any
documents contemplated by or referred to therein or the transactions
contemplated thereby or the enforcement of any of terms hereof or thereof or of
any such other documents, provided, however, no Revolving Credit Lender shall be
liable for any of the foregoing to the extent that any of the foregoing arises
from any action taken or omitted to be taken by the Administrative Agent as to
which a final judicial determination has been or is made (in a proceeding in
which the Administrative Agent has had an opportunity to be heard) that the
Administrative Agent had acted in a grossly negligent manner, in actual bad
faith, or in willful misconduct.
1410 -RESIGNATION OF ADMINISTRATIVE AGENT
(a) The Administrative Agent may resign at any time by giving 60 days
prior written notice thereof to the Revolving Credit Lenders. Upon receipt of
any such notice of resignation, the Majority Lenders shall have the right to
appoint a successor to such Administrative Agent, which shall be a Revolving
Credit Lender (and if no Event of Default has occurred, with the consent of the
Lead Borrower, not to be unreasonably withheld and, in any event, deemed given
by the Lead Borrower if no written objection is provided by the Lead Borrower to
the (resigning) Administrative Agent within seven (7) Business Days notice of
such proposed appointment). If a successor Administrative Agent shall not have
been so appointed and accepted such appointment within 30 days after the giving
of notice by the resigning Administrative Agent, then the resigning
Administrative Agent may appoint a successor Administrative Agent, which shall
be a financial institution having a combined capital and surplus in excess of
$300,000,000. The consent of the Lead Borrower otherwise required by this
Section 14-10(a) shall not be required if an Event of Default has occurred.
(b) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor shall thereupon
succeed to, and become vested with, all the rights, powers, privileges, and
duties of the (resigning) Administrative Agent so replaced, and the (resigning)
Administrative Agent shall be discharged from the (resigning) Administrative
Agent's duties and obligations hereunder, other than on account of any
responsibility for any action taken or omitted to be taken by the (resigning)
Administrative Agent as to which a final judicial determination has been or is
made (in a proceeding in which the (resigning) Person has had an opportunity to
be heard) that such Person had acted in a grossly negligent manner or in bad
faith.
(c) After any retiring Administrative Agent's resignation, the
provisions of this Agreement and of all other Loan Documents shall continue in
effect for the retiring Person's benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
ARTICLE 15 - ACTION BY ADMINISTRATIVE AGENT - CONSENTS - AMENDMENTS - WAIVERS:
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151 -ADMINISTRATION OF CREDIT FACILITIES
(a) Except as otherwise specifically provided in this Agreement, the
Administrative Agent may take any action with respect to the credit facility
contemplated by the Loan Documents as the Administrative Agent determines to be
appropriate , provided, however, the Administrative Agent is not under any
affirmative obligation to take any action which it is not required by this
Agreement or the Loan Documents specifically to so take.
(b) Except as specifically provided in the following Sections of this
Agreement, whenever a Loan Document or this Agreement provides that action may
be taken or omitted to be taken in an Administrative Agent's discretion, the
Administrative Agent shall have the sole right to take, or refrain from taking,
such action without, and notwithstanding, any vote of the Revolving Credit
Lender:
Actions Described in Section Type of Consent Required
------------------------------------------------------
15-2 Majority Lenders
15-3 Supermajority Lenders
15-4 Unanimous Consent
15-5 Consent of SwingLine Lender
15-6 Consent of Issuer
15-7 Consent of the Administrative Agent
(c) The rights granted to the Revolving Credit Lenders in those
sections referenced in Section 15-1(b) shall not otherwise limit or impair the
Administrative Agent's exercise of its discretion under the Loan Documents.
152 - ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS Except as
otherwise provided in this Agreement, the Consent or direction of the Majority
Lenders is required for any amendment, waiver, or modification of any Loan
Document.
153 - ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY LENDERS None
of the following may take place except with the Consent of the Supermajority
Lenders:
(a) The increase of the Revolving Credit Ceiling to an amount in excess
of $700,000,000.00 (or such greater amount to which such Revolving Credit
Ceiling has been previously increased in accordance with the provisions of this
Section 15-3(a)).
(b) The increase of the SwingLine Loan Ceiling to an mount in excess of
$40,000,000.00 (or such greater amount to which such SwingLine Loan Ceiling has
been previously increased in accordance with the provisions of this Section
15-3(b)).
154 -ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT None of the
following may take place except with the Consent of each Revolving Credit Lender
adversely affected thereby or with Unanimous Consent:
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(a) Any increase in any Revolving Credit Lender's Revolving Credit
Commitment or Revolving Credit Commitment Percentage (other than by reason of
the application of Section 15-10 (which deals with NonConsenting Revolving
Credit Lenders) or Section 16-1 (which deals with assignments and
participations)).
(b) Any decrease in any interest rate or fee payable to the Revolving
Credit Lenders on account of the Revolving Credit Loans.
(c) Any extension of the Maturity Date.
(d) Any forgiveness of all or any portion of any payment Liability.
(e) Any decrease in any interest rate or fee payable under any of the
Loan Documents (other than any Administrative Agent's Fee (for which the consent
of the Administrative Agent shall also be required)) and of any fee provided for
by the Fee Letter (which may be amended by written agreement between the Lead
Borrower on the one hand, and the Administrative Agent on the other).
(f) Any release of a material portion of the Collateral not otherwise
required or provided for in the Loan Documents or to facilitate a Liquidation.
(g) Any amendment of the definition of the terms "Borrowing Base" or of
any definition of any component thereof, such that more credit would be
available to the Borrowers, based on the same assets, as would have been
available to the Borrowers immediately prior to such amendment , it being
understood, however, that:
(ii) The foregoing shall not limit the adjustment by the
Administrative Agent of any Reserve in the Administrative
Agent's administration of the Revolving Credit as otherwise
permitted by this Agreement.
(iii) The foregoing shall not prevent the Administrative
Agent, in its administration of the Revolving Credit, from
restoring any component of Borrowing Base which had been
lowered by the Administrative Agent back to the value of such
component, as stated in this Agreement or to an intermediate
value.
(a) Any release of any Person obligated on account of the Liabilities.
(b) The making of any Revolving Credit Loan which, when made, exceeds
Availability and is not a Permissible OverLoan, provided, however,
(iv) no Consent shall be required in connection with the
making of any Revolving Credit Loan to "cover" any honoring of
a drawing under any L/C; and
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(v) each Lender recognizes that subsequent to the making of a
Revolving Credit Loan which does not constitute a Permissible
OverLoan, the unpaid principal balance of the Loan Account may
exceed Borrowing Base on account of changed circumstances
beyond the control of the Administrative Agent (such as a drop
in collateral value).
(a) The waiver of the obligation of the Borrowers to reduce the unpaid
principal balance of loans under the Revolving Credit to an amount which does
not exceed a Permissible OverLoan or to eliminate an OverLoan.
(b) Any amendment of this Article 15.
(c) Amendment of any of the following Definitions:
"Appraised Inventory Liquidation Value"
"Appraised Inventory Percentage"
"Majority Lenders"
"Permissible OverLoan"
"Unanimous Consent"
155 -ACTIONS REQUIRING SWINGLINE LENDER CONSENT No action, amendment,
or waiver of compliance with, any provision of the Loan Documents or of this
Agreement which affects the SwingLine Lender may be undertaken without the
Consent of the SwingLine Lender.
156 - ACTIONS REQUIRING ISSUER CONSENT No action, amendment, or waiver
of compliance with, any provision of the Loan Documents or of this Agreement
which affects the Issuer may be undertaken without the Consent of the Issuer.
157 -ACTIONS REQUIRING ADMINISTRATIVE AGENT'S CONSENT
(a) No action, amendment, or waiver of compliance with, any provision
of the Loan Documents or of this Agreement which affects the Administrative
Agent in its capacity as Administrative Agent may be undertaken without the
written consent of the Administrative Agent.
(b) No action referenced herein which affects the rights, duties,
obligations, or liabilities of the Administrative Agent shall be effective
without the written consent of the Administrative Agent.
158 -MISCELLANEOUS ACTIONS
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(a) Notwithstanding any other provision of this Agreement, no single
Revolving Credit Lender independently may exercise any right of action or
enforcement against or with respect to any Borrower.
(b) The Administrative Agent shall be fully justified in failing or
refusing to take action under this Agreement or any Loan Document on behalf of
any Revolving Credit Lender unless the Administrative Agent shall first
(ii) receive such clear, unambiguous, written instructions as
the Administrative Agent deems appropriate; and
(iii) be indemnified to the Administrative Agent's
satisfaction by the Revolving Credit Lenders against any and
all liability and expense which may be incurred by the
Administrative Agent by reason of taking or continuing to take
any such action, unless such action had been grossly
negligent, in willful misconduct, or in bad faith.
(a) The Administrative Agent may establish reasonable procedures for
the providing of direction and instructions from the Revolving Credit Lenders to
the Administrative Agent, including its reliance on multiple counterparts,
facsimile transmissions, and time limits within which such direction and
instructions must be received in order to be included in a determination of
whether the requisite Revolving Credit Commitments has provided its direction,
Consent, or instructions.
159 -ACTIONS REQUIRING LEAD BORROWER'S CONSENT
(a) The Lead Borrower's consent is required for any amendment of this
Agreement, except that each of the following Articles of this Agreement may be
amended without the consent of the Lead Borrower:
Article Title of Article
----------------------------
12 Revolving Credit Fundings and Distributions
13 Acceleration and Liquidation
14-1 The Administrative Agent
15 Action By Administrative Agent - Consents -
Amendments - Waivers (other than as provided in
Section 15-9(b))
(b) Subject to Section 15-9(c), the Section 15-4 (Unanimous Consent)
may not be amended without the consent of the Lead Borrower:
(c) The Lead Borrower's consent to the amendment of those provisions
referenced in Section 15-9(b)
(ii) Shall be deemed given unless written objection is made,
within seven (7) Business Days following the Administrative
Agent's giving notice to the Lead Borrower of the proposed
amendment; and
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(iii) shall not be required during the existence of any Event
of Default.
1510 -NONCONSENTING REVOLVING CREDIT LENDER
(a) In the event that a Revolving Credit Lender (in this Section 15-10,
a "NONCONSENTING REVOLVING CREDIT LENDER") does not provide its Consent to a
proposal by the Administrative Agent to take action which requires consent under
this Article 15, then subject to the prior consent of the Administrative Agent,
one or more Revolving Credit Lenders who provided Consent to such action may
require the assignment, without recourse and in accordance with the procedures
outlined in Section 16-1, below, of the NonConsenting Revolving Credit Lender's
commitment hereunder on fifteen (15) days written notice to the Administrative
Agent and to the NonConsenting Revolving Credit Lender.
(b) At the end of such fifteen (15) days, and provided that the
NonConsenting Revolving Credit Lender delivers the Revolving Credit Note held by
the NonConsenting Revolving Credit Lender to the Administrative Agent, the
Revolving Credit Lenders who have given such written notice shall Transfer the
following to the NonConsenting Revolving Credit Lender:
(ii) Such NonConsenting Revolving Credit Lender's Pro-Rata
share of the principal and interest of the Revolving Credit
Loans to the date of such assignment.
(iii) All fees distributable hereunder to the NonConsenting
Revolving Credit Lender to the date of such assignment.
(iv) Any out-of-pocket costs and expenses for which the
NonConsenting Revolving Credit Lender is entitled to
reimbursement from the Borrowers.
(a) In the event that the NonConsenting Revolving Credit Lender fails
to deliver to the Administrative Agent the Revolving Credit Note held by the
NonConsenting Revolving Credit Lender as provided in Section 15-10(b), then:
(v) The amount otherwise to be Transferred to the
NonConsenting Revolving Credit Lender shall be Transferred to
the Administrative Agent and held by the Administrative Agent,
without interest, to be turned over to the NonConsenting
Revolving Credit Lender upon delivery of the Revolving Credit
Note held by that NonConsenting Revolving Credit Lender.
(vi) The Revolving Credit Note held by the NonConsenting
Revolving Credit Lender shall have no force or effect
whatsoever.
(vii) The NonConsenting Revolving Credit Lender shall cease to
be a "Revolving Credit Lender".
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(viii) The Revolving Credit Lender(s) which have Transferred
the amount to the Administrative Agent as described above
shall have succeeded to all rights and become subject to all
of the obligations of the NonConsenting Revolving Credit
Lender as "Revolving Credit Lender".
(a) In the event that more than one (1) Revolving Credit Lender wishes
to require such assignment, the NonConsenting Revolving Credit Lender's
commitment hereunder shall be divided among such Revolving Credit Lenders,
pro-rata based upon their respective Revolving Credit Commitment Percentages,
with the Administrative Agent coordinating such transaction.
(b) The Administrative Agent shall coordinate the retirement of the
Revolving Credit Note held by the NonConsenting Revolving Credit Lender and the
issuance of Revolving Credit Notes to those Revolving Credit Lenders which
"take-out" such NonConsenting Revolving Credit Lender, provided, however, no
processing fee otherwise to be paid as provided in Section 16-2(b) shall be due
under such circumstances.
ARTICLE 16 - ASSIGNMENTS BY REVOLVING CREDIT LENDERS:
161 -ASSIGNMENTS AND ASSUMPTIONS:
(a) Except as provided herein, each Revolving Credit Lender (in this
Section 16-1(a), an "ASSIGNING REVOLVING CREDIT LENDER") may assign to one or
more Eligible Assignees (in this Section 16-1(a), each an "ASSIGNEE REVOLVING
CREDIT LENDER") all or a portion of that Revolving Credit Lender's interests,
rights and obligations under this Agreement and the Loan Documents (including
all or a portion of its Commitment) and the same portion of the Revolving Credit
Loans at the time owing to it, and of the Revolving Credit Note held by the
Assigning Revolving Credit Lender, provided that:
(ii) The Administrative Agent (and if no Event of Default then
exists, the Lead Borrower) shall have given its prior written
consent to such assignment, which consent shall not be
unreasonably withheld, but need not be given if the proposed
assignment would result in any resulting Revolving Credit
Lender's having a Dollar Commitment of less than the "minimum
hold" amount specified in Section 16-1(a)(iii), provided that.
any assignment complying with all other terms of this Article
16 to a Person then a Revolving Credit Lender shall not be
subject to the prior consent of the Administrative Agent or
the Lead Borrower.
(iii) Each such assignment shall be of a constant, and not a
varying, percentage of all the Assigning Revolving Credit
Lender's rights and obligations under this Agreement.
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(iv) Following the effectiveness of such assignment, the
Assigning Revolving Credit Lender's Dollar Commitment (if not
an assignment of all of the Assigning Revolving Credit
Lender's Commitment) shall not be less than $10,000,000.
162 -ASSIGNMENT PROCEDURES. (This Section 16-2 describes the procedures
to be followed in connection with an assignment effected pursuant to this
Article 16 and permitted by Section 16-1).
(a) The parties to such an assignment shall execute and deliver to the
Administrative Agent, for recording in the Register, an Assignment and
Acceptance substantially in the form of EXHIBIT 16-1, annexed hereto.
(b) The Assigning Revolving Credit Lender shall deliver to the
Administrative Agent, with such Assignment and Acceptance, the Revolving Credit
Note held by the subject Assigning Revolving Credit Lender and the
Administrative Agent's processing fee of $3,500.00, provided, however, no such
processing fee shall be due where the Assigning Revolving Credit Lender is one
of the Revolving Credit Lenders at the initial execution of this Agreement.
(c) The Administrative Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "REGISTER")
for the recordation of the names and addresses of the Revolving Credit Lenders
and of the Revolving Credit Commitment Percentage and Revolving Credit
Commitment Percentage of each Revolving Credit Lender. The Register shall be
available for inspection by the Revolving Credit Lenders at any reasonable time
and from time to time upon reasonable prior notice. In the absence of manifest
error, the entries in the Register shall be conclusive and binding on all
Revolving Credit Lenders. The Administrative Agent and the Revolving Credit
Lenders may treat each Person whose name is recorded in the Register as a
"Revolving Credit Lender" hereunder for all purposes of this Agreement.
(d) The Assigning Revolving Credit Lender and Assignee Revolving Credit
Lender, directly between themselves, shall make all appropriate adjustments in
payments for periods prior to the effective date of an Assignment and
Assumption.
163 -EFFECT OF ASSIGNMENT.
(a) From and after the effective date specified in an Assignment and
Acceptance which has been executed, delivered, and recorded (which effective
date the Administrative Agent may delay by up to five (5) Business Days after
the delivery of such Assignment and Acceptance):
(ii) The Assignee Revolving Credit Lender:
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(B) Shall be a party to this Agreement and the Loan Documents
(and to any amendments thereof) as fully as if the Assignee Revolving
Credit Lender had executed each.
(C) Shall have the rights of a Revolving Credit Lender
hereunder to the extent of the Revolving Credit Commitment Percentage
and Revolving Credit Commitment Percentage assigned by such Assignment
and Acceptance.
(i) The Assigning Revolving Credit Lender shall be released
from the Assigning Revolving Credit Lender's obligations under
this Agreement and the Loan Documents to the extent of the
Commitment assigned by such Assignment and Acceptance.
(ii) The Administrative Agent shall undertake to obtain and
distribute replacement Revolving Credit Notes to the subject
Assigning Revolving Credit Lender and Assignee Revolving
Credit Lender.
(a) By executing and delivering an Assignment and Acceptance, the
parties thereto confirm to and agree with each other and with all parties to
this Agreement as to those matters which are set forth in the subject Assignment
and Acceptance.
ARTICLE 17 - NOTICES:
171 -NOTICE ADDRESSES. All notices, demands, and other communications
made in respect of any Loan Document (other than a request for a loan or advance
or other financial accommodation under the Revolving Credit) shall be made to
the following addresses, each of which may be changed upon seven (7) days
written notice to all others given by certified mail, return receipt requested:
If to the Administrative Agent:
Fleet Retail Finance Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇ ▇. ▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Fax : ▇▇▇ ▇▇▇-▇▇▇▇
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If to the Lead Borrower
And All Borrowers:
OfficeMax, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax :
With a copy to:
OfficeMax, Inc.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention : General Counsel
Fax :
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
3200 National City Center
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention : ▇▇▇▇ ▇. ▇▇▇▇▇
Fax: : (▇▇▇) ▇▇▇-▇▇▇▇
172 -NOTICE GIVEN.
(a) Except as otherwise specifically provided herein, notices shall be
deemed made and correspondence received, as follows (all times being local to
the place of delivery or receipt):
(ii) By mail: the sooner of when actually received or three
(3) days following deposit in the United States mail, postage
prepaid.
(iii) By recognized overnight express delivery: the Business
Day following the day when sent.
(iv) By Hand: If delivered on a Business Day after 9:00 AM and
no later than three (3) hours prior to the close of customary
business hours of the recipient, when delivered. Otherwise, at
the opening of the then next Business Day.
(v) By Facsimile transmission (which must include a header on
which the party sending such transmission is indicated): If
sent on a Business Day after 9:00 AM and no later than three
(3) hours prior to the close of customary business hours of
the recipient, one (1) hour
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after being sent. Otherwise, at the opening of the then next
Business Day.
(a) Rejection or refusal to accept delivery and inability to deliver
because of a changed address or facsimile number for which no due notice was
given shall each be deemed receipt of the notice sent.
ARTICLE 18 - TERM:
181 -TERMINATION OF REVOLVING CREDIT. The Revolving Credit shall remain
in effect (subject to suspension as provided in Section 2-5(g) hereof) until the
Termination Date.
182 -ACTIONS ON TERMINATION.
(a) On the Termination Date, the Borrowers shall pay the Administrative
Agent (whether or not then due), in immediately available funds, all Liabilities
then due and owing, including, without limitation: the following:
(ii) The entire balance of the Loan Account (including the
unpaid principal balance of the Revolving Credit Loans, and
the SwingLine Loan ).
(iii) Any then remaining installments of the Administrative
Agent's Fee.
(iv) Any payments due on account of the indemnification
obligations included in Section 2-10(f).
(v) Any accrued and unpaid Unused Fee.
(vi) All unreimbursed costs and expenses of the Administrative
Agent and of Lenders' Special Counsel for which each Borrower
is responsible.
(a) On the Termination Date, the Borrowers shall also shall make such
arrangements concerning any L/Cs then outstanding as are reasonably satisfactory
to the Administrative Agent.
(b) Until such payment (Section 18-2(a)) and arrangements concerning
L/Cs (Section 18-2(b)), all provisions of this Agreement, other than those
included in Article 2 which place any obligation on the Administrative Agent or
any Revolving Credit Lender to make any loans or advances or to provide any
financial accommodations to any Borrower shall remain in full force and effect
until all Liabilities shall have been paid in full.
(c) The release by the Administrative Agent of the Collateral Interests
granted the Administrative Agent by the Borrowers hereunder may be upon such
conditions and indemnifications as the Administrative Agent may reasonably
require.
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ARTICLE 19 - GENERAL:
191 -PROTECTION OF COLLATERAL. The Administrative Agent has no duty as
to the collection or protection of the Collateral beyond the safe custody of
such of the Collateral as may come into the possession of the Administrative
Agent.
192 -PUBLICITY. The Administrative Agent may issue a "tombstone" notice
of the establishment of the credit facility contemplated by this Agreement and
may make reference to each Borrower (and may utilize any logo or other
distinctive symbol associated with each Borrower with the Borrower's consent,
which will not be unreasonably withheld) in connection with any advertising,
promotion, or marketing undertaken by the Administrative Agent.
193 -SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrowers and their respective representatives, successors, and assigns and
shall enure to the benefit of the Administrative Agent and each Revolving Credit
Lender and their respective successors and permitted assigns, provided, however,
no trustee or other fiduciary appointed with respect to any Borrower shall have
any rights hereunder, and provided further that no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder. In the event that
the Administrative Agent or any Revolving Credit Lender assigns or transfers its
rights under this Agreement, the assignee shall thereupon succeed to and become
vested with all rights, powers, privileges, and duties of such assignor
hereunder and such assignor shall thereupon be discharged and relieved from its
duties and obligations hereunder.
194 -SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.
195 -AMENDMENTS. COURSE OF DEALING.
(a) This Agreement and the other Loan Documents incorporate all
discussions and negotiations between each Borrower and the Administrative Agent
and each Revolving Credit Lender, either express or implied, concerning the
matters included herein and in such other instruments, any custom, usage, or
course of dealings to the contrary notwithstanding. No such discussions,
negotiations, custom, usage, or course of dealings shall limit, modify, or
otherwise affect the provisions thereof. No failure by the Administrative Agent
or any Revolving Credit Lender to give notice to the Lead Borrower of any
Borrower's having failed to observe and comply with any warranty or covenant
included in any Loan Document shall constitute a waiver of such warranty or
covenant or the amendment of the subject Loan Document.
(b) Each Borrower may undertake any action otherwise prohibited hereby,
and may omit to take any action otherwise required hereby, upon and with the
express prior written consent of the Administrative Agent. Subject to Article
15, no consent, modification, amendment, or waiver of any provision of any Loan
Document shall be effective unless executed in writing by or on behalf of the
party to be charged with such modification, amendment, or
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waiver (and if such party is the Administrative Agent then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the
Administrative Agent shall be in reliance upon all representations and
warranties theretofore made to the Administrative Agent by or on behalf of the
Borrowers (and any guarantor, endorser, or surety of the Liabilities) and
consequently may be rescinded in the event that any of such representations or
warranties was not true and complete in all material respects when given.
(c) Each reference in the Loan Documents to the exercise of discretion
or the like by the Administrative Agent or any Revolving Credit Lender shall be
to such Person's exercise of its judgment, in good faith, based upon such
Person's consideration of any such factors as the Administrative Agent or that
Revolving Credit Lender, determines as having a material bearing on credit risks
associated with the providing of Revolving Credit Loans and financial
accommodations to the Borrowers, taking into account information of which that
Person then has actual knowledge. The burden of establishing the failure of the
Administrative Agent or any Revolving Credit Lender to have acted in a
reasonable manner in such Person's exercise of such discretion shall be the
Borrowers'.
196 -POWER OF ATTORNEY. In connection with all powers of attorney
included in this Agreement, each Borrower hereby grants unto the Administrative
Agent (acting through any of its officers) full power to do any and all things
necessary or appropriate during the existence of an Event of Default in
connection with the exercise of such powers as fully and effectually as that
Borrower might or could do, hereby ratifying all that said attorney shall do or
cause to be done by virtue of this Agreement. No power of attorney set forth in
this Agreement shall be affected by any disability or incapacity suffered by any
Borrower and each shall survive the same. All powers conferred upon the
Administrative Agent by this Agreement, being coupled with an interest, shall be
irrevocable until this Agreement is terminated by a written instrument executed
by a duly authorized officer of the Administrative Agent.
197 -APPLICATION OF PROCEEDS. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the
Administrative Agent determines in its sole discretion, consistent, however,
with Sections 13-6 and 13-7 and any other applicable provisions of this
Agreement. The Borrowers shall remain liable for any deficiency remaining
following such application.
198 -INCREASED COSTS. If, as a result of any change in any Requirement
of Law, or of the interpretation or application thereof by any court or by any
governmental or other authority or entity charged with the administration
thereof, whether or not having the force of law, which:
(a) subjects any Revolving Credit Lender to any taxes or changes the
basis of taxation, or increases any existing taxes, on payments of principal,
interest or other amounts payable by any Borrower to the Administrative Agent or
any Revolving Credit Lender under this Agreement (except for taxes on the
Administrative Agent or any Revolving Credit Lender based on net income or
capital imposed by the jurisdiction in which the principal or lending offices of
the Administrative Agent or that Revolving Credit Lender are located);
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(b) imposes, modifies or deems applicable any reserve, cash margin,
special deposit or similar requirements against assets held by, or deposits in
or for the account of or loans by or any other acquisition of funds by the
relevant funding office of any Revolving Credit Lender;
(c) imposes on any Revolving Credit Lender any other condition with
respect to any Loan Document; or
(d) imposes on any Revolving Credit Lender a requirement to maintain or
allocate capital in relation to the Liabilities;
and the result of any of the foregoing, in such Revolving Credit Lender's
reasonable opinion, is to increase the cost to that Revolving Credit Lender of
making or maintaining any loan, advance or financial accommodation or to reduce
the income receivable by that Revolving Credit Lender in respect of any loan,
advance or financial accommodation by an amount which that Revolving Credit
Lender deems to be material, then upon written notice from the Administrative
Agent, from time to time, to the Lead Borrower (such notice to set out in
reasonable detail the facts giving rise to and a summary calculation of such
increased cost or reduced income), the Borrowers shall forthwith pay to the
Administrative Agent, for the benefit of the subject Revolving Credit Lender,
within thirty (30) days after receipt of such notice, that amount which shall
compensate the subject Revolving Credit Lender for such additional cost or
reduction in income.
199 -COSTS AND EXPENSES OF THE ADMINISTRATIVE AGENT .
(a) The Borrowers shall pay from time to time on demand all Costs of
Collection and all reasonable costs, expenses, and disbursements (including
reasonable attorneys' fees and expenses) which are incurred by the
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement and of any other Loan Documents, and all other
reasonable costs, expenses, and disbursements which may be incurred connection
with or in respect to the credit facility contemplated hereby or which otherwise
are incurred with respect to the Liabilities.
(b) The Borrowers shall pay from time to time on demand all reasonable
costs and expenses (including reasonable attorneys' fees and expenses) incurred,
during the existence of any Event of Default, by the Revolving Credit Lenders to
Lenders' Special Counsel.
(c) Each Borrower authorizes the Administrative Agent to pay all such
fees and expenses and in the Administrative Agent's discretion, to add such fees
and expenses to the Loan Account.
(d) The undertaking on the part of each Borrower in this Section 19-9
shall survive payment of the Liabilities and/or any termination, release, or
discharge executed by the Administrative Agent in favor of any Borrower, other
than a termination, release, or discharge which makes specific reference to this
Section 19-9.
1910 -COPIES AND FACSIMILES. Each Loan Document and all documents and
papers which relates thereto which have been or may be hereinafter furnished the
Administrative Agent
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or any Revolving Credit Lender may be reproduced by that Revolving Credit Lender
or by the Administrative Agent by any photographic, microfilm, xerographic,
digital imaging, or other process, and such Person making such reproduction may
destroy any document so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business). Any facsimile which
bears proof of transmission shall be binding on the party which or on whose
behalf such transmission was initiated and likewise shall be so admissible in
evidence as if the original of such facsimile had been delivered to the party
which or on whose behalf such transmission was received.
1911 -MASSACHUSETTS LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the law of The Commonwealth of Massachusetts.
1912 -CONSENT TO JURISDICTION.
(a) Each Borrower agrees that any legal action, proceeding, case, or
controversy against any Borrower with respect to any Loan Document may be
brought in the Superior Court of Suffolk County Massachusetts or in the United
States District Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Administrative Agent may elect in the Administrative
Agent's sole discretion. By execution and delivery of this Agreement, each
Borrower, for itself and in respect of its property, accepts, submits, and
consents generally and unconditionally, to the jurisdiction of the aforesaid
courts.
(b) Each Borrower WAIVES personal service of any and all process upon
it, and irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the Lead Borrower at the Lead
Borrower's address for notices as specified herein, such service to become
effective five (5) Business Days after such mailing.
(c) Each Borrower WAIVES any objection based on forum non conveniens
and any objection to venue of any action or proceeding instituted under any of
the Loan Documents and consents to the granting of such legal or equitable
remedy as is deemed appropriate by the Court.
(d) Nothing herein shall affect the right of the Administrative Agent
to bring legal actions or proceedings in any other competent jurisdiction.
(e) Each Borrower agrees that any action commenced by any Borrower
asserting any claim arising under or in connection with this Agreement or any
other Loan Document shall be brought solely in the Superior Court of Suffolk
County Massachusetts or in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, and that such Courts shall have
exclusive jurisdiction with respect to any such action.
1913 -INDEMNIFICATION. Each Borrower shall indemnify, defend, and hold
the Administrative Agent and each Revolving Credit Lender and any Participant
and any of their respective employees, officers, or agents (each, an
"INDEMNIFIED PERSON") harmless of and from
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any claim brought or threatened against any Indemnified Person by any Borrower,
any guarantor or endorser of the Liabilities, or any other Person (as well as
from reasonable attorneys' fees, expenses, and disbursements in connection
therewith) on account of the relationship of the Borrowers or of any other
guarantor or endorser of the Liabilities, including all costs, expenses,
liabilities, and damages as may be suffered by any Indemnified Person in
connection with (x) the Collateral; (y) the occurrence of any Event of Default;
or (z) the exercise of any rights or remedies under any of the Loan Documents
(each of claims which may be defended, compromised, settled, or pursued by the
Indemnified Person with counsel of the Lender's selection, but at the expense of
the Borrowers) other than any claim as to which a final determination is made in
a judicial proceeding (in which the Administrative Agent and any other
Indemnified Person has had an opportunity to be heard), which determination
includes a specific finding that the Indemnified Person seeking indemnification
had acted in a grossly negligent manner or in actual bad faith. This
indemnification shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by the Administrative Agent in favor of the
Borrowers, other than a termination, release, or discharge duly executed on
behalf of the Administrative Agent which makes specific reference to this
Section 19-13.
1914 -RULES OF CONSTRUCTION. The following rules of construction shall
be applied in the interpretation, construction, and enforcement of this
Agreement and of the other Loan Documents:
(a) Any term used herein to describe Collateral or a Person, which term
is defined in either (or both) the UCC as in effect on the date when this
Agreement was executed by the Borrowers or in UCC9'99, shall be given the
meaning which is the more encompassing of the two definitions.
(b) Words in the singular include the plural and words in the plural
include the singular.
(c) Titles, headings (indicated by being underlined or shown in SMALL
CAPITALS) and any Table of Contents are solely for convenience of reference; do
not constitute a part of the instrument in which included; and do not affect
such instrument's meaning, construction, or effect.
(d) The words "includes" and "including" are not limiting.
(e) Text which follows the words "including, without limitation" (or
similar words) is illustrative and not limitational.
(f) Text which is shown in italics (except for parenthesized italicized
text), shown in BOLD, shown IN ALL CAPITAL LETTERS, or in any combination of the
foregoing, shall be deemed to be conspicuous.
(g) The words "may not" are prohibitive and not permissive.
(h) Any reference to a Person's "knowledge" (or words of similar
import) are to such Person's knowledge assuming that such Person has undertaken
reasonable and diligent
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investigation with respect to the subject of such "knowledge" (whether or not
such investigation has actually been undertaken).
(i) Terms which are defined in one section of any Loan Document are
used with such definition throughout the instrument in which so defined.
(j) The symbol "$" refers to United States Dollars.
(k) Unless limited by reference to a particular Section or provision,
any reference to "herein", "hereof", or "within" is to the entire Loan Document
in which such reference is made.
(l) References to "this Agreement" or to any other Loan Document is to
the subject instrument as amended to the date on which application of such
reference is being made.
(m) Except as otherwise specifically provided, all references to time
are to Boston time.
(n) In the determination of any notice, grace, or other period of time
prescribed or allowed hereunder:
(ii) Unless otherwise provided (A) the day of the act, event,
or default from which the designated period of time begins to
run shall not be included and the last day of the period so
computed shall be included unless such last day is not a
Business Day, in which event the last day of the relevant
period shall be the then next Business Day and (B) the period
so computed shall end at 5:00 PM on the relevant Business Day.
(iii) The word "from" means "from and including".
(iv) The words "to" and "until" each mean "to, but excluding".
(v) The word "through" means "to and including".
(a) The Loan Documents shall be construed and interpreted in a
harmonious manner and in keeping with the intentions set forth in Section 19-15
hereof, provided, however, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.
1915 -INTENT. It is intended that:
(a) This Agreement take effect as a sealed instrument.
(b) The scope of all Collateral Interests created by any Borrower to
secure the Liabilities be broadly construed in favor of the Administrative
Agent.
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(c) All Collateral Interests created in favor of the Administrative
Agent at any time and from time to time by any any secure all Liabilities,
whether now existing or contemplated or hereafter arising.
(d) All reasonable costs, expenses, and disbursements incurred by the
Administrative Agent and, to the extent provide in Section 19-9 each Revolving
Credit Lender, in connection with such Person's relationship(s) with any
Borrower shall be borne by the Borrowers.
(e) Unless otherwise explicitly provided herein, the Administrative
Agent's consent to any action of any Borrower which is prohibited unless such
consent is given may be given or refused by the Administrative Agent in its sole
discretion.
1916 -PARTICIPATIONS: Each Revolving Credit Lender may sell
participations to one or more financial institutions (each, a "PARTICIPANT") in
that Revolving Credit Lender's interests herein provided that no such
participation shall include any provision which accords that Participant with
any rights, vis a vis the Administrative Agent, with respect to any requirement
herein for approval by a requisite number or proportion of the Revolving Credit
Lenders. No such sale of a participation shall relieve a Revolving Credit Lender
from that Revolving Credit Lender's obligations hereunder nor obligate the
Administrative Agent to any Person other than a Revolving Credit Lender.
1917 -RIGHT OF SET-OFF. Any and all deposits or other sums at any time
credited by or due to any Borrower from the Administrative Agent or any
Revolving Credit Lender or any Participant or from any Affiliate of any of the
foregoing, and any cash, securities, instruments or other property of any
Borrower in the possession of any of the foregoing, whether for safekeeping or
otherwise (regardless of the reason such Person had received the same) shall at
all times constitute security for all Liabilities and for any and all
obligations of each Borrower to the Administrative Agent and such Revolving
Credit Lender or any Participant or such Affiliate and may be applied or set off
against the Liabilities and against such obligations at any time an Event of
Default exists, whether or not such are then due and whether or not other
collateral is then available to the Administrative Agent or that Revolving
Credit Lender.
1918 -PLEDGES TO FEDERAL RESERVE BANKS: Nothing included in this
Agreement shall prevent or limit any Revolving Credit Lender, to the extent that
such Revolving Credit Lender is subject to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act (12 U.S.C. Section
341) from pledging all or any portion of that Lender's interest and rights under
this Agreement, provided, however, neither such pledge nor the enforcement
thereof shall release the pledging Revolving Credit Lender from any of its
obligations hereunder or under any of the Loan Documents.
1919 -MAXIMUM INTEREST RATE. Regardless of any provision of any Loan
Document, neither the Administrative Agent nor any Revolving Credit Lender shall
be entitled to contract for, charge, receive, collect, or apply as interest on
any Liability, any amount in excess of the maximum rate imposed by Applicable
Law. Any payment which is made which, if treated as interest on a Liability
would result in such interest's exceeding such maximum rate shall be held,
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to the extent of such excess, as additional collateral for the Liabilities as if
such excess were "Collateral."
1920 -WAIVERS.
(a) The Borrowers make each of the waivers included in Section
19-20(b), below, knowingly, voluntarily, and intentionally, and understands that
Administrative Agent and each Revolving Credit Lender, in establishing the
facilities contemplated hereby and in providing loans and other financial
accommodations to or for the account of the Borrowers as provided herein,
whether not or in the future, is relying on such waivers.
(b) EACH BORROWER RESPECTIVELY WAIVES THE FOLLOWING:
(ii) Except as otherwise specifically required hereby, notice
of non-payment, demand, presentment, protest and all forms of
demand and notice, both with respect to the Liabilities and
the Collateral.
(iii) Except as otherwise specifically required hereby, the
right to notice and/or hearing prior to the Administrative
Agent's exercising of the Administrative Agent's rights upon
default.
(iv) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR
CONTROVERSY IN WHICH THE ADMINISTRATIVE AGENT OR ANY REVOLVING
CREDIT LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST THE ADMINISTRATIVE
AGENT OR ANY REVOLVING CREDIT LENDER OR IN WHICH THE
ADMINISTRATIVE AGENT OR ANY REVOLVING CREDIT LENDER IS JOINED
AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF
OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN ANY
BORROWER OR ANY OTHER PERSON AND THE ADMINISTRATIVE AGENT OR
ANY REVOLVING CREDIT LENDER (EACH OF WHOM LIKEWISE WAIVES THE
RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR CONTROVERSY).
THE ADMINISTRATIVE AGENT AND THE REVOLVING CREDIT LENDERS
LIKEWISE WAIVE ANY SUCH RIGHT TO A JURY.
(v) The benefits or availability of any stay, limitation,
hindrance, delay, or restriction (including, without
limitation, any automatic stay which otherwise might be
imposed pursuant to Section 362 of the Bankruptcy Code) with
respect to any action which the Administrative Agent may or
may become entitled to take hereunder.
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(vi) Any defense, counterclaim, set-off, recoupment, or other
basis on which the amount of any Liability, as stated on the
books and records of the Administrative Agent, could be
reduced or claimed to be paid otherwise than in accordance
with the tenor of and written terms of such Liability.
(vii) Any claim to consequential, special, or punitive
damages.
1921 - ADDITIONAL WAIVERS.
(a) The Liabilities are the joint and several obligations of each
Borrower. To the fullest extent permitted by applicable law, the obligations of
each Borrower hereunder shall not be affected by (i) the failure of the
Administrative Agent or any Revolving Credit Lender to assert any claim or
demand or to enforce or exercise any right or remedy against any other Borrower
under the provisions of this Agreement, any other Loan Document or otherwise,
(ii) any rescission, waiver, amendment or modification of, or any release from
any of the terms or provisions of, this Agreement, any other Loan Document, or
any other agreement, including with respect to any other Borrower of the
Liabilities under this Agreement, or (iii) the failure to perfect any security
interest in, or the release of, any of the security held by or on behalf of the
Administrative Agent.
(b) The obligations of each Borrower hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Liabilities), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Liabilities, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Liabilities or otherwise. Without limiting the
generality of the foregoing, the obligations of each Borrower hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Revolving Credit Lender to assert any claim or
demand or to enforce any remedy under this Agreement, any other Loan Document or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Liabilities, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Borrower or that would
otherwise operate as a discharge of any Borrower as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Liabilities).
(c) To the fullest extent permitted by applicable law, each Borrower
waives any defense based on or arising out of any defense of any other Borrower
or the unenforceability of the Liabilities or any part thereof from any cause,
or the cessation from any cause of the liability of any other Borrower, other
than the indefeasible payment in full in cash of all the Liabilities. The
Administrative Agent may, at its election, foreclose on any security held by it
by one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Liabilities, make any other accommodation with any other Borrower, or exercise
any other right or remedy available to them against any other Borrower, without
affecting or impairing in any way the liability of any Borrower
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hereunder except to the extent that all the Liabilities have been indefeasibly
paid in full in cash. Pursuant to applicable law, each Borrower waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Borrower against
any other Borrower, as the case may be, or any security.
(d) Upon payment by any Borrower of any Liabilities, all rights of such
Borrower against any other Borrower arising as a result thereof by way of right
of subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Liabilities. In addition, any indebtedness of
any Borrower now or hereafter held by any other Borrower is hereby subordinated
in right of payment to the prior payment in full of the Liabilities. None of the
Borrowers will demand, ▇▇▇ for, or otherwise attempt to collect any such
indebtedness. If any amount shall erroneously be paid to any Borrower on account
of (a) such subrogation, contribution, reimbursement, indemnity or similar right
or (b) any such indebtedness of any Borrower, such amount shall be held in trust
for the benefit of the Administrative Agent and the Revolving Credit Lenders and
shall forthwith be paid to the Administrative Agent to be credited against the
payment of the Liabilities, whether matured or unmatured, in accordance with the
terms of the Loan Documents.
1922 -CONFIDENTIALITY. The Administrative Agent and the Revolving
Credit Lenders agree to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to their and their
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrowers or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any
Revolving Credit Lender on a nonconfidential basis from a source other than the
Borrowers. For the purposes of this Section, the term "Information" means all
information received from the Borrowers relating to their businesses, other than
any such information that is available to the Administrative Agent or any
Revolving Credit Lender on a nonconfidential basis prior to disclosure by the
Borrowers. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
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OFFICEMAX, INC.
("LEAD BORROWER")
By_________________________________
Print Name:________________________________
Title:________________________________
"BORROWERS":
OFFICEMAX, INC.
By_________________________________
Print Name:________________________________
Title:________________________________
BIZMART, INC.
By_________________________________
Print Name:________________________________
Title:________________________________
BIZMART (TEXAS), INC.
By_________________________________
Print Name:________________________________
Title:_______________________________
OFFICEMAX CORP.
By_________________________________
Print Name:________________________________
Title:________________________________
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124
FLEET RETAIL FINANCE INC.
("ADMINISTRATIVE AGENT")
By________________________________
Print Name:________________________________
Title:________________________________
The "REVOLVING CREDIT LENDERS AND OTHER AGENTS"
FLEET RETAIL FINANCE INC.
By________________________________
Print Name:________________________________
Title:________________________________
THE CHASE MANHATTAN BANK, as Co-Agent and
Revolving Credit Lender
By________________________________
Print Name:________________________________
Title:________________________________
CHASE BUSINESS CREDIT CORPORATION, as
Co-Agent
By________________________________
Print Name:________________________________
Title:________________________________
115
125
CONGRESS FINANCIAL CORPORATION
By________________________________
Print Name:________________________________
Title:________________________________
FOOTHILL CAPITAL CORPORATION
By________________________________
Print Name:________________________________
Title:________________________________
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126
GENERAL ELECTRIC CAPITAL CORPORATION
By________________________________
Print Name:________________________________
Title:________________________________
GMAC BUSINESS CREDIT, LLC, as Documentation
Agent and Revolving Credit Lender
By________________________________
Print Name:________________________________
Title:________________________________
GMAC COMMERCIAL CREDIT LLC, as Documentation
Agent and Revolving Credit Lender
By________________________________
Print Name:________________________________
Title:________________________________
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127
NATIONAL CITY COMMERCIAL FINANCE, INC.
By________________________________
Print Name:________________________________
Title:________________________________
THE CIT GROUP/BUSINESS CREDIT, INC., As
Syndication Agent and Revolving Credit Lender
By________________________________
Print Name:________________________________
Title:________________________________
GUARANTY BUSINESS CREDIT CORPORATION
By________________________________
Print Name:________________________________
Title:________________________________
▇▇▇▇▇▇ FINANCIAL, INC.
By________________________________
Print Name:________________________________
Title:________________________________
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128
SIEMENS FINANCIAL SERVICES, INC.
By________________________________
Print Name:________________________________
Title:________________________________
601250.9
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