EXECUTION COPY
--------------
-----------------------------------------------------------------
-----------------------------------------------------------------
REVOLVING CREDIT AND GUARANTY AGREEMENT
-----------------------------------------------------------------
-----------------------------------------------------------------
Among
BRADLEES STORES, INC.,
as Debtor and Debtor-in-Possession,
as Borrower,
-----------
BRADLEES, INC.,
BRADLEES ADMINISTRATIVE CO., INC.,
and
EACH OF THE SUBSIDIARIES OF
THE BORROWER NAMED HEREIN,
each as Debtor and Debtor-in-Possession,
---------------------------------------
as Guarantors,
-------------
THE LENDERS PARTY HERETO,
BANKBOSTON, N.A.,
as Administrative Agent and as Issuing Bank,
-------------------------------------------
BANKBOSTON RETAIL FINANCE, INC.,
as Agent,
--------
THE CIT GROUP/BUSINESS CREDIT, INC.
and
CONGRESS FINANCIAL CORPORATION (NEW ENGLAND),
each as Co-Agent
----------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Dated as of December 23, 1997
-----------------------------------------------------------------
-----------------------------------------------------------------
TABLE OF CONTENTS
PAGE
INTRODUCTORY STATEMENT ...................................... 1
I. DEFINITIONS ............................................. 2
SECTION 1.01.Defined Terms ........................... 2
SECTION 1.02.Terms Generally ......................... 16
II. AMOUNT AND TERMS OF CREDIT ............................. 17
SECTION 2.01.Commitment of the Lenders ............... 17
SECTION 2.02.Letters of Credit ....................... 17
SECTION 2.03.Making of Loans .......................... 19
SECTION 2.04.Notes; Repayment of Loans ............... 21
SECTION 2.05.Interest on Loans ....................... 21
SECTION 2.06.Default Interest ........................ 22
SECTION 2.07.Optional Termination or Reduction of
Commitments .......................................... 22
SECTION 2.08.Alternate Rate of Interest .............. 22
SECTION 2.09. Refinancing of Loans .................... 22
SECTION 2.10.Mandatory Prepayment; Commitment
Termination; Cash Collateral ......................... 23
SECTION 2.11.Optional Prepayment of Loans;
Reimbursement of Lenders ............................. 24
SECTION 2.12. Maintenance of Loan Account; Statements
of Account ........................................... 25
SECTION 2.13. Cash Receipts ........................... 25
SECTION 2.14.Application of Payments ................. 28
SECTION 2.15. Increased Costs ......................... 29
SECTION 2.16.Change in Legality ...................... 30
SECTION 2.17.Payments; No Setoff ..................... 31
SECTION 2.18.Taxes ................................... 31
SECTION 2.19.Certain Fees ............................ 33
SECTION 2.20.Unused Commitment Fee ................... 33
SECTION 2.21.Letter of Credit Fees ................... 34
SECTION 2.22.Nature of Fees ........................... 34
SECTION 2.23.Priority and Liens ...................... 34
SECTION 2.24.Right of Set-Off ........................ 35
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇ Interest in Cash Collateral
Account .............................................. 35
SECTION 2.26.Payment of Obligations .................. 35
SECTION ▇.▇▇.▇▇ Discharge; Survival of Claims ........ 35
III. REPRESENTATIONS AND WARRANTIES ........................ 36
SECTION 3.01.Organization and Authority .............. 36
SECTION 3.02.Due Execution ........................... 36
SECTION 3.03.Statements Made ......................... 36
SECTION 3.04.Ownership ............................... 36
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ Statements .................... 37
SECTION 3.06.Liens ................................... 37
SECTION 3.07.Compliance with Law ..................... 37
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ ............................... 38
SECTION 3.09.The Order ............................... 38
SECTION 3.10.Use of Proceeds 38
SECTION ▇.▇▇.▇▇▇▇▇ Locations; Bank Accounts; Inventory 39
SECTION 3.12.Litigation .............................. 39
SECTION 3.13.Material Adverse Change ................. 39
SECTION 3.14.Payment of Taxes and Post-Petition
Obligations .......................................... 39
SECTION 3.15. Taxes and Tax Returns ................... 40
SECTION 3.16. Franchises, Licenses, Permits, Leases,
Patents, Copyrights, Trademarks, and Trade Names ..... 40
SECTION 3.17. Labor Matters ........................... 40
SECTION 3.18.ERISA ................................... 40
SECTION 3.19.Accounts Receivable Financing ........... 41
IV. CONDITIONS OF LENDING .................................. 41
SECTION 4.01.Conditions Precedent to Initial Loans
and Initial Letters of Credit ........................ 41
SECTION 4.02.Conditions Precedent to Each Loan
and Each Letter of Credit ............................ 45
V. AFFIRMATIVE COVENANTS ................................... 46
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ Statements, Reports, etc ...... 46
SECTION 5.02.Corporate Existence ..................... 48
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ ............................... 48
SECTION 5.04.Obligations and Taxes ................... 48
SECTION 5.05.Notice of Event of Default, etc ......... 48
SECTION 5.06.Borrowing Base Certificate .............. 48
SECTION 5.07.Access to Books and Records; Inspections 49
SECTION 5.08.Fees .................................... 49
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇ Plan; Projections .............. 49
SECTION 5.10.▇▇▇▇▇ ................................... 49
SECTION 5.11.Environmental and Other Matters ......... 50
SECTION 5.12.Access Agreements ....................... 50
VI. NEGATIVE COVENANTS ..................................... 50
SECTION 6.01.Liens and Pre-Petition Claim Payments ... 50
SECTION 6.02.Merger, etc ............................. 51
SECTION 6.03.Indebtedness ............................ 51
SECTION ▇.▇▇.▇▇▇▇▇▇▇ Expenditures .................... 51
SECTION 6.05.EBITDA .................................. 51
SECTION 6.06.Accounts Payable to Inventory Ratio ..... 52
SECTION 6.07.Guarantees and Other Liabilities ........ 52
SECTION 6.08.Chapter 11 Claims ....................... 52
SECTION 6.09.Dividends; Capital Stock ................ 52
SECTION 6.10.Transactions with Affiliates ............ 52
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇, Loans and Advances ......... 53
SECTION 6.12.Disposition of Assets ................... 53
SECTION 6.13.Nature of Business ...................... 53
SECTION 6.14.Conflicting Agreements, Orders or Actions 53
VII. EVENTS OF DEFAULT ..................................... 54
SECTION ▇.▇▇.▇▇▇▇▇▇ of Default ....................... 54
SECTION 7.02.When Continuing ......................... 57
VIII. THE ADMINISTRATIVE AGENT AND THE AGENT ............... 57
SECTION 8.01.Administration by Administrative Agent .. 57
SECTION 8.02.Advances and Payments ................... 57
SECTION 8.03.Sharing of Excess Payments .............. 58
SECTION 8.04.Agreement of Required Lenders ........... 58
SECTION 8.05.Liability of Administrative Agent
and the Agent 59
SECTION 8.06.Reimbursement and Indemnification ....... 59
SECTION 8.07.Rights of Administrative Agent and Agent 60
SECTION 8.08.Independent Lenders and Issuing Bank .... 60
SECTION 8.09.Notice of Transfer ...................... 60
SECTION 8.10.Successor Administrative Agent or Agent . 60
SECTION 8.11.Reports and Financial Statements ........ 60
IX. GUARANTY ............................................... 61
SECTION 9.01.Guaranty ................................ 61
SECTION ▇.▇▇.▇▇ Impairment of Guaranty ............... 62
SECTION 9.03.Subrogation ............................. 62
SECTION ▇.▇▇.▇▇▇▇▇▇ Agreement ........................ 62
SECTION 10.01.Notices ................................ 62
SECTION 10.02. Survival of Agreement, Representations
and Warranties, etc. ................................. 63
SECTION 10.03.Successors and Assigns ................. 63
SECTION 10.04.Confidentiality ........................ 65
SECTION 10.05.Expenses; Documentary Taxes ............ 65
SECTION 10.06.Indemnity .............................. 66
SECTION 10.07. CHOICE OF LAW .......................... 66
SECTION ▇▇.▇▇.▇▇ Waiver .............................. 66
SECTION 10.09. Extension of Maturity .................. 66
SECTION 10.10.Amendments, etc. ....................... 67
SECTION 10.11.Exit Financing ......................... 68
SECTION 10.12.Severability ........................... 68
SECTION 10.13.Headings ............................... 68
SECTION 10.14.Execution in Counterparts .............. 68
SECTION 10.15.Prior Agreements ....................... 68
SECTION 10.16.Further Assurances ..................... 68
SECTION 10.17.WAIVER OF JURY TRIAL ................... 69
PAGE
ANNEXES
Annex A Commitment Amounts
EXHIBITS
Exhibit A-1 Form of Borrowing Base Certificate (Weekly)
Exhibit A-2 Form of Borrowing Base Certificate (Monthly)
Exhibit B-1 Form of Note
Exhibit B-2 Form of Agent Advance Note
Exhibit C Form of Order
Exhibit D Forms of Opinions of Counsel to the Borrower
Exhibit E BTM Stipulation
Exhibit F BT Stipulation
Exhibit G Exit Commitment Letter
SCHEDULES
Schedule 2.13 Cash Deposit Procedures
Schedule 3.01 Jurisdictions of Qualification
Schedule 3.04 Subsidiaries
Schedule 3.06A Pre-Filing Liens
Schedule 3.06B Post-Filing Liens
Schedule 3.11(a) Location of Stores, Warehouses and
Distribution Centers (Inventory
Locations)
Schedule 3.11(b) Bank Accounts and Cash Baskets
Schedule 3.11(c) Assets of Guarantors
Schedule 3.14 Post-Petition Obligations
Schedule 3.15 Taxes and Tax Returns
Schedule 3.18 ERISA Plans
Schedule 4.01(q) Closing Documents List
Schedule 5.01(e) Required Reports
Schedule 6.07 Existing Contingent Obligations
Schedule 6.12 Closing Stores
Schedule 7.01(f) Excepted Foreclosures
EXECUTION COPY
REVOLVING CREDIT AND GUARANTY AGREEMENT
REVOLVING CREDIT AND GUARANTY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this
"CREDIT AGREEMENT"), dated as of December 23, 1997, among
BRADLEES STORES, INC., a Massachusetts corporation, as debtor
and debtor-in-possession (the "BORROWER"), in a case pending
under Chapter 11 of the Bankruptcy Code, BRADLEES, INC., a
Massachusetts corporation ("BI"), BRADLEES ADMINISTRATIVE CO.,
INC., a Massachusetts corporation ("BAC"), and each of the other
guarantors listed in Schedule 3.04 (together with BI and BAC,
each a "Guarantor" and collectively, the "GUARANTORS"), each of
which Guarantors is a debtor and debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code (the cases of
the Borrower and the Guarantors, each a "CASE" and collectively,
the "CASES"), the Lenders named on Annex A hereto and each other
Person from time to time party hereto as a Lender, BANKBOS0ON,
N.A., a national banking association ("BBNA"), as the issuer of
Letters of Credit (in such capacity, together with any successor
issuer of Letters of Credit hereunder, the "ISSUING BANK") and
as administrative agent for the Issuing Bank, the Agent and the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT"),
BANKBOSTON RETAIL FINANCE, INC., a subsidiary of BBNA ("BBRF"),
as agent (in such capacity, the "AGENT"), THE CIT GROUP/BUSINESS
CREDIT, INC. and CONGRESS FINANCIAL CORPORATION (NEW ENGLAND),
each as co-agents (collectively, the "CO-AGENTS").
INTRODUCTORY STATEMENT
On June 23, 1995, the Borrower and the Guarantors filed
voluntary petitions with the Bankruptcy Court initiating the
Cases and have continued in the possession of their assets and
in the management of their businesses pursuant to Sections 1107
and 1108 of the Bankruptcy Code. The Borrower and Guarantors
currently are parties to a $200,000,000 debtor-in-possession
Amended and Restated Revolving Credit and Guaranty Agreement
(the "CHASE CREDIT FACILITY"), dated as of June 23, 1995, as
amended and restated as of April 10, 1997, and as amended
pursuant to that First Amendment to Amended and Restated
Revolving Credit and Guaranty Agreement, dated as of October 16,
1997, with The Chase Manhattan Bank ("CHASE").
The Borrower has applied to the Lenders and the Issuing
Bank for a revolving credit and letter of credit facility in an
aggregate principal amount not to exceed $250,000,000, all of
the Borrower's obligations under which are to be guaranteed by
the Guarantors.
The extensions of credit hereunder will be used, first, to
repay in full all amounts outstanding under the Chase Credit
Facility (or, with respect to letters of credit issued
thereunder, to cash collateralize such letters of credit or to
secure the Borrower's reimbursement obligations in connection
therewith by issuing Letters of Credit hereunder) and thereafter
to provide working capital for and to finance Inventory
purchases by the Borrower (as set forth herein and in the Order)
and otherwise for general corporate purposes and to make
Pre-Petition Claim Payments to the extent permitted by Section
6.01(b).
To provide guarantees and security for the repayment of the
Loans, the reimbursement of any draft drawn under a Letter of
Credit and the payment of the other obligations of the Borrower
and the Guarantors hereunder and under the other Loan Documents,
the Borrower and the Guarantors will provide to the
Administrative Agent, the Issuing Bank, the Agent, the Co-Agents
and the Lenders the following (each as more fully described
herein):
(a) a guaranty from each of the Guarantors of the due
and punctual payment and performance of the obligations of the
Borrower hereunder and under the other Loan Documents;
(b) with respect to the obligations of the Borrower
and the Guarantors hereunder, an allowed administrative expense
claim in each of the Cases pursuant to Section 364(c)(1) of the
Bankruptcy Code having priority over all administrative expenses
of the kind specified in Bankruptcy Code Sections 503(b),
507(b), 364(c), and any future chapter 7 case, or otherwise; and
(c) a perfected first priority Lien, pursuant to
Section 364(c)(2) of the Bankruptcy Code, upon all cash and cash
equivalents in the Cash Collateral Account.
All of the claims and the Liens granted hereunder in the
Cases to the Administrative Agent, the Issuing Bank, the Agent
and the Lenders shall be subject to the Carve-Out, to the extent
provided in Section 2.23.
Concurrently herewith, the Lenders and the Borrower are
entering into the Exit Commitment Letter (as defined in the
definition of "Exit Facility" below) providing, upon the
satisfaction of all of the conditions precedent contained
therein and in the Exit Facility, for the provision by the
Lenders to the Borrower of the Exit Facility.
Accordingly, the parties hereto hereby agree as follows:
I. DEFINITIONS
SECTION 1.01.DEFINED TERMS.
As used in this Agreement, the following terms shall have
the meanings specified below:
"ABR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance
with the provisions of Article II.
"ACCESS AGREEMENTS" shall mean agreements with landlords,
mortgagees and/or bailees of the Borrower providing access to
the Administrative Agent or its representatives or agents to
inspect the Inventory at the Borrower's warehouses, which
agreements will be in form and substance satisfactory to the
Administrative Agent.
"ACCOUNTS PAYABLE" shall mean amounts owing by the Borrower
on open account to creditors for purchases of goods and
services, determined on a consolidated basis pursuant to GAAP.
"ADJUSTED LIBOR RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to the quotient of (a)the LIBOR Rate in effect for
such Interest Period divided by (b)a percentage (expressed as a
decimal) equal to 100% minus Statutory Reserves.
"AFFILIATE" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled
by, or is under common control with such Person. For purposes
of this definition, a Person (a "CONTROLLED PERSON") shall be
deemed to be "controlled by" another Person (a "CONTROLLING
PERSON") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the
management and policies of the Controlled Person whether by
contract or otherwise.
"AGENT ADVANCE" shall mean a Loan made by the
Administrative Agent to the Borrower pursuant to Section 2.03(c)
hereof.
"AGREEMENT" shall mean this Revolving Credit and Guaranty
Agreement, as the same may from time to time be amended,
modified or supplemented.
"ALTERNATE BASE RATE" shall mean, for any day, the higher
of (a)the annual rate of interest then most recently announced
by BBNA at its head office in Boston, Massachusetts as its "Base
Rate" and (b)the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% (0.50%) per annum. If for any reason the
Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Administrative Agent
to obtain sufficient quotations thereof in accordance with the
terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this
definition, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base
Rate due to a change in BBNA's Base Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such
change in BBNA's Base Rate or the Federal Funds Effective Rate,
respectively.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a ▇▇▇▇▇▇ and an Eligible Assignee,
and accepted by the Administrative Agent, in a form supplied by
the Administrative Agent.
"BANKRUPTCY CODE" shall mean The Bankruptcy Reform Act of
1978, codified as 11 U.S.C. Section 101 et seq., as heretofore
and hereafter amended from time to time, and any successor act
or statute.
"BANKRUPTCY COURT" shall mean the United States Bankruptcy
Court for the Southern District of New York, or any other court
having jurisdiction over the Cases.
"BBNA CONCENTRATION ACCOUNT" shall have the meaning set
forth in Section 2.13.
"BBNA DISBURSEMENT ACCOUNTS" shall have the meaning set
forth in Section 2.14.
"BLOCKED ACCOUNT AGREEMENTS" has the meaning set forth in
Section 2.13(a).
"BLOCKED ACCOUNT BANKS" shall mean the banks with whom the
Borrower has entered into Blocked Account Agreements.
"BLOCKED ACCOUNTS" shall have the meaning set forth in
Section 2.13(a).
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWING" shall mean the incurrence of Loans of a single
Type made from all the Lenders on a single date and having, in
the case of Eurodollar Loans, a single Interest Period (with any
ABR Loan made pursuant to Section 2.16 being considered a part
of the related Borrowing of Eurodollar Loans).
"BORROWING BASE" shall mean, on any day, an amount equal to
(a)60% of the then Loan Value of the then Eligible Receivables,
PLUS (b) 72% of the then Loan Value of the then Eligible
Inventory and (without duplication) 72% of the then Loan Value
of the then applicable Eligible LC Inventory Sublimit, PLUS
(c)the Overadvance Amount, if any, minus (d)the then amount of
all Borrowing Base Reserves.
"BORROWING BASE CERTIFICATE" shall mean a certificate
substantially in the form of Exhibit A-1 or, in the case of the
first Borrowing Base Certificate that is delivered after the
close of each of the Borrower's fiscal months, Exhibit A-2 (in
each case with such changes therein as may be required by the
Administrative Agent to reflect the components of, and reserves
against, the Borrowing Base as provided for hereunder from time
to time), executed and certified by a Financial Officer of the
Borrower, which shall include appropriate exhibits and schedules
as referred to therein.
"BORROWING BASE RESERVES" shall mean such reserves against
the Borrowing Base as the Administrative Agent from time to time
may elect, in its reasonable discretion and on 7 days' notice to
the Borrower, to apply for purposes of determining the Borrowing
Base on account of any matter, contingency or risk which the
Administrative Agent may in good ▇▇▇▇▇ ▇▇▇▇ potentially material
to the prospect of payment of the Credit Extensions, including
(by way solely of illustration and without in any manner
limiting the Administrative Agent's right to apply a reserve on
account of any other matter, contingency or risk, whether
similar or not) such items as the Customer Credits Reserve and
the Carve-Out Reserve.
"BREAKAGE COSTS" shall have the meaning set forth in
Section 2.11(b).
"BSI" shall mean BancBoston Securities Inc.
"BT STIPULATION" shall have the meaning set forth in
Section 6.01(b).
"BTM STIPULATION" shall have the meaning set forth in
Section 2.13(g).
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which banks in the States of New York or
Massachusetts are required or permitted to close (and, for a
Letter of Credit, other than a day on which the bank issuing
such Letter of Credit is closed); PROVIDED, HOWEVER, that when
used in connection with a Eurodollar Loan, the term "Business
Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits on the London interbank market.
"BUSINESS PLAN" shall mean the "Fiscal 1998 Business Plan"
prepared by the Borrower, dated December 8, 1997, as revised and
delivered to the Administrative Agent on December 9, 1997,
setting forth the business objectives for the Borrower and the
Guarantors for the 1998 fiscal year, which plan includes, among
other things: a monthly (i)balance sheet, (ii)income statement,
and (iii)statement of cash flows.
"CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued
as liabilities during such period and excluding that portion of
Capitalized Leases which is capitalized on the consolidated
balance sheet of the Borrower and the Guarantors) by the
Borrower and the Guarantors during such period that, in
conformity with GAAP, are required to be included in or
reflected by the property, plant, equipment or intangibles or
similar fixed asset accounts reflected in the consolidated
balance sheet of the Borrower and the Guarantors net of cash
amounts received during such period in reimbursement of Capital
Expenditures made by the Borrower and the Guarantors, excluding
interest capitalized during construction, by the Borrower and
the Guarantors during such period that, in conformity with GAAP,
are required to be included in or reflected by the property,
plant, equipment or intangibles or similar fixed asset accounts
reflected in the consolidated balance sheet of the Borrower and
the Guarantors (including equipment which is purchased
simultaneously with the trade-in of existing equipment owned by
the Borrower or any of the Guarantors to the extent of the gross
amount of such purchase price less the book value of the
equipment being traded in at such time), but excluding
expenditures made in connection with the replacement or
restoration of assets to the extent reimbursed or financed from
insurance proceeds paid on account of the loss of or the damage
to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation or eminent
domain of such assets being replaced.
"CAPITALIZED LEASE" shall mean, as applied to any Person,
any lease of property by such Person as lessee which would be
capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
"CARVE-OUT" shall have the meaning set forth in Section
2.23.
"CARVE-OUT RESERVE" shall mean, at any time, the lesser of
(i) all accrued and unpaid fees and disbursements incurred by
the professionals retained in the Cases pursuant to Section 327
of the Bankruptcy Code, any statutory committee appointed in the
Cases and any trustee or examiner appointed or elected in the
Cases and (y)fees pursuant to 28 U.S.C. Section 1930, PLUS
$1,500,000 and (ii) $5,000,000.
"CASES" shall mean the Chapter 11 Cases of the Borrower and
each of the Guarantors pending in the Bankruptcy Court.
"CASH COLLATERAL ACCOUNT" shall mean an interest-bearing
account established by the Borrower with the Administrative
Agent at BBNA under the sole and exclusive dominion and control
of the Administrative Agent at the office of BBNA at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ designated as the "Bradlees
Stores, Inc. Cash Collateral Account" that shall be used solely
for the purposes set forth in Sections 2.02, 2.10(a) and 2.14.
"CASH RECEIPTS" shall have the meaning set forth in Section
2.13(a).
"CHASE" shall have the meaning set forth in the
Introductory Statement.
"CHASE CREDIT FACILITY" shall have the meaning set forth in
the Introductory Statement.
"CHASE CONCENTRATION ACCOUNT" shall have the meaning set
forth in Section 2.13(a).
"CLOSING DATE" shall mean the date on which this Agreement
has been executed and the conditions precedent to the making of
the initial Loans set forth in Sections 4.01 and 4.02 have been
satisfied or waived in writing by the Administrative Agent, the
Issuing Bank, the Agent and the Required Lenders, which date
shall occur promptly upon the entry of the Order.
"CLOSING DOCUMENTS LIST" shall mean the list of required
closing documents attached hereto as Schedule4.01(q).
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMITMENT" shall mean, with respect to each Lender, the
aggregate commitment of such Lender hereunder in the amount set
forth opposite its name on Annex A hereto or as may subsequently
be set forth in the Register from time to time, as the same may
be reduced from time to time pursuant to Section 2.07.
"COMMITMENT FEE" shall have the meaning set forth in
Section 2.20.
"COMMITMENT PERCENTAGE" shall mean at any time, with
respect to each Lender, the percentage obtained by dividing its
Commitment at such time by the Total Commitment at such time.
"CREDIT CARD OBLIGOR" shall mean any of National Bancard
Corporation, Novus Services, Inc., American Express Travel
Related Services Company, Inc. and Citicorp Retail Services,
Inc., and any other Person acceptable to the Administrative
Agent in its sole discretion, provided that each of the above
entities and each such other Person has executed and delivered
to the Administrative Agent a Payment Direction Agreement with
respect to the Receivables due to the Borrower from such
Obligor.
"CREDIT EXTENSIONS" shall be equal, as of any day, to the
sum of (a)the principal balance of all Loans then outstanding,
and (b)the then amount of the Letter of Credit Outstandings.
"CUSTOMER CREDITS RESERVE" shall mean a reserve established
by the Administrative Agent from time to time in an amount equal
to the sum of (i) fifty percent (50%) of the dollar value of
gift certificates outstanding and (ii) fifty percent (50%) of
the dollar value of customer merchandise credits.
"DEFAULT" shall mean any event which, upon the giving of
any notice or the lapse of any period of time expressly set
forth in Section 7.01, or both, would constitute an Event of
Default.
"DOLLARS" and "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, for any period, all as determined in
accordance with GAAP, the net income (or net loss) of the
Borrower for such period, PLUS (to the extent taken into account
in determining such net income or net loss) (a)the sum of
(i)depreciation expense, (ii)amortization expense,
(iii)provision for LIFO adjustment for Inventory valuation,
(iv)net total Federal, state and local income tax expense,
(v)gross interest expense for such period less gross interest
income for such period, (vi)any non-recurring charge or
restructuring charge which in accordance with GAAP is excluded
from operating income, (vii)the cumulative effect of any change
in accounting principles, (viii) extraordinary losses and
(ix)"Chapter 11 expenses" (or "administrative costs reflecting
Chapter 11 expenses") as shown on the Borrower's statement of
income for such period, MINUS (b)extraordinary gains, and PLUS
(c)the amount of cash received (and minus the amount of cash
expended) in such period in respect of any amount which, under
clause (vi) above, was taken into account in determining EBITDA
for such or any prior period.
9
"ELIGIBLE ASSIGNEE" shall mean (a)a commercial bank having
total assets in excess of $500,000,000, (b)a finance company,
insurance company or other financial institution (in each case
with total assets in excess of $200,000,000) or fund (with total
assets in excess of $50,000,000) reasonably acceptable to the
Administrative Agent which in the ordinary course of business
extends credit or purchases debt of the type evidenced by the
Notes and whose becoming an assignee would not constitute a
prohibited transaction under Section 4975 of ERISA, and (c)any
other financial institution, fund or other Person reasonably
satisfactory to the Administrative Agent and approved by the
Borrower, which approval shall not be unreasonably withheld or
delayed, and which approval shall not be required upon the
occurrence and during the continuance of an Event of Default.
"ELIGIBLE INVENTORY" shall mean, as of the date of
determination thereof, items of Inventory of the Borrower that
are finished goods, merchantable and readily saleable to the
public in the ordinary course and goods ("L/C GOODS") as to
which a documentary Letter of Credit has been issued and which,
if in the possession of the Borrower, would be treated as the
Borrower's Inventory hereunder, but only if such goods have been
consigned to the Issuing Bank or the Borrower (along with
delivery to the Issuing Bank or the Borrower, as applicable, of
the documents of title with respect thereto), in each case
deemed by the Administrative Agent in its reasonable discretion
to be eligible for inclusion in the calculation of the Borrowing
Base. Without limiting the foregoing, unless otherwise approved
in writing by the Administrative Agent, none of the following
shall be deemed to be Eligible Inventory, and Eligible Inventory
shall be reduced by the following:
(a) Inventory (other than L/C Goods) that is not
owned solely by the Borrower or with respect to which the
Borrower does not have good, valid and marketable title, free
and clear of any Lien;
(b) Inventory that is not located on, or in transit
directly to, property leased by the Borrower or in a contract
warehouse or other third party location, in each case, located
in the United States and segregated or otherwise separately
identifiable from goods of others, if any, stored on the
premises;
10
(c) Inventory that is not reflected in the Borrower's
stock ledger report, warehouse status report or the "in-transit"
account in the general ledger;
(d) Inventory that has been returned or rejected by
any of the Borrower's customers and which is damaged or
defective or to be returned to vendor;
(e) Inventory not held for resale in the ordinary
course, including samples, publicity, display or demonstration
Inventory, packaway Inventory, and piece goods;
(f) consigned and leased Inventory;
(g) special order Inventory;
(h) supplies and packing or shipping materials; and
(i) Inventory reserves that may be required by the
Administrative Agent in the exercise of its reasonable
discretion and on 7 days' notice to the Borrower based on a
change in the value of the Inventory as determined by the
Administrative Agent in its reasonable discretion (including, by
way of example, a Shrink Reserve, inventory obsolescence,
seasonality, imbalance, change in Inventory character,
composition or mix, change in mark-down practices both permanent
and point of sale and change in retail mark-on or mark-up
practices).
"ELIGIBLE LC INVENTORY" shall mean, as of the date of
determination thereof, documentary Letters of Credit (i)that
have been issued with an expiry date within 75 days of such date
of determination, (ii)that have been issued for the acquisition
by the Borrower of Inventory which would otherwise be Eligible
Inventory if owned by the Borrower, and (iii)that may include
Letters of Credit issued as described in the third paragraph of
the Introductory Statement above, so long as such Letter of
Credit would otherwise satisfy the requirements hereof.
"ELIGIBLE LC INVENTORY SUBLIMIT" shall mean, for any fiscal
month of the Borrower, the dollar amount set forth opposite such
fiscal month below:
Month Eligible LC Inventory Sublimit
----- ------------------------------
January $20,000,000
February $20,000,000
March $20,000,000
April $24,000,000
May $33,000,000
June $34,000,000
July $35,000,000
August $38,000,000
September $30,000,000
October $20,000,000
November $20,000,000
December $20,000,000
"ELIGIBLE RECEIVABLES" shall mean, as of the date of
determination thereof, Receivables of the Borrower payable in
Dollars and deemed by the Administrative Agent in its reasonable
discretion to be eligible for inclusion in the calculation of
the Borrowing Base. Without limiting the foregoing, unless
otherwise approved in writing by the Administrative Agent, none
of the following shall be deemed to be Eligible Receivables:
(a) Receivables that have been outstanding for more
than 5 Business Days;
(b) Receivables not owned solely by the Borrower or
the Borrower does not have good, valid and marketable title
thereto, free and clear of any Lien;
(c) Receivables which the Administrative Agent
determines in its reasonable discretion to be uncertain of
collection; and
(d) With respect to Receivables created under the
Purchase and Service Agreement, a notice of termination has been
delivered thereunder.
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any
Governmental Authority for (i)any liability under federal or
state environmental laws or regulations, or (ii)damages arising
from or costs incurred by such Governmental Authority in
response to a release or threatened release of a hazardous or
toxic waste, substance or constituent, or other substance into
the environment.
12
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA AFFILIATE" shall mean any trade or business (whether
or not incorporated) which is a member of a group of which the
Borrower is a member and which is under common control within
the meaning of Section 414(b) or (c) of the Code and the
regulations promulgated and rulings issued thereunder.
"ESCROW ACCOUNTS" shall have the meaning set forth in
Section 2.13(c).
"ESCROW PROCEEDS" shall have the meaning set forth in
Section 2.13(c).
"EUROCURRENCY LIABILITIES" shall have the meaning assigned
thereto in Regulation D issued by the Board, as in effect from
time to time.
"EURODOLLAR APPLICABLE MARGIN" shall mean 2.25% per annum.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a
rate determined by reference to Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning set forth in
Section 7.01.
"EXIT FACILITY" shall mean that certain Revolving Credit
and Guaranty Agreement contemplated to be entered into (subject
in full to the satisfaction (or waiver by the Administrative
Agent and the Lenders) of all of the conditions to effectiveness
contained therein), among the Borrower, the Guarantors, the
Administrative Agent, the Agent and the Lenders pursuant to that
certain Commitment Letter dated the date hereof from the Lenders
to the Borrower attached hereto as Exhibit G (the "EXIT
COMMITMENT LETTER").
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
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 funds brokers, as published
for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New
York or, if such rate is not 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
funds brokers of recognized standing selected by the
Administrative Agent.
"FEE LETTER" shall mean that certain fee letter, dated
December 23, 1997, between the Borrower and the Administrative
Agent.
"FEES" shall collectively mean the Commitment Fees, the
Letter of Credit Fees, the fees and charges described in Section
2.02(c) and the fees referred to in Section 2.19.
"FILING DATE" shall mean June 23, 1995.
"FINANCIAL OFFICER" shall mean the Chief Executive Officer,
the Chief Financial Officer, the Vice President - Controller or
the Treasurer of the Borrower.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those used in preparing the
financial statements referred to in Section 3.03.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality or any court, in each case
whether of the United States or any foreign jurisdiction.
"INDEBTEDNESS" shall mean, at any time and with respect to
any Person, (i)all indebtedness of such Person for borrowed
money, (ii)all indebtedness of such Person for the deferred
purchase price of property or services (other than property,
including inventory, and services purchased, and expense
accruals and deferred compensation items arising, in the
ordinary course of business), (iii)all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments (other than performance, surety and appeal bonds
arising in the ordinary course of business), (iv)all
indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property), (v)all obligations of such Person under leases which
have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded,
(vi)all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of
credit or similar facilities, (vii)all Indebtedness referred to
in clauses (i) through (vi) above guaranteed directly or
indirectly by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (A)to pay or
purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (B)to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to
make payment of such Indebtedness or to assure the holder of
such Indebtedness against loss in respect of such Indebtedness,
(C)to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such
services are rendered) or (D)otherwise to assure a creditor
against loss in respect of such Indebtedness, and (viii)all
Indebtedness referred to in clauses (i) through (vii) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Lien upon or in any property owned by such Person, even though
such Person has not assumed or become liable for the payment of
such Indebtedness.
"INSUFFICIENCY" shall mean, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within the
meaning of Section 4001(a)(18) of ERISA.
"INTEREST EXPENSE" shall mean interest expense as
determined in accordance with GAAP.
"INTEREST PAYMENT DATE" shall mean (i)as to any Eurodollar
Loan having an Interest Period of 1, 2 or 3 months, the last day
of such Interest Period and (ii)as to all ABR Loans outstanding
at any time during any month, the first Business Day of the next
succeeding month.
"INTEREST PERIOD" shall mean, as to any Borrowing of
Eurodollar Loans, the period commencing on and including the
date of such Borrowing (including as a result of a refinancing
of ABR Loans) or on the last day of the preceding Interest
Period applicable to such Borrowing and ending on and excluding
the numerically corresponding day (or if there is no
corresponding day, the last day) in the calendar month that is
1, 2 or 3 months thereafter, as the Borrower may elect in the
related notice delivered pursuant to Sections 2.03(b) or 2.09;
PROVIDED, HOWEVER, that (i)if any Interest Period would end on a
day which shall not be a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on
the next preceding Business Day, and (ii)no Interest Period
shall end later than the Termination Date.
"INVENTORY" shall mean all goods, wares and merchandise
owned and held for sale by the Borrower.
"INVESTMENTS" shall have the meaning set forth in Section
6.11.
"LENDERS" shall mean the Persons identified on Annex A
hereto and each assignee that becomes a party to this Agreement
as set forth in Section 10.03(b).
"LETTER OF CREDIT" shall mean a letter of credit that is
(i)issued for account of the Borrower, (ii)a standby or
documentary letter of credit, (iii)issued in connection with the
purchase of Inventory by the Borrower and for other purposes for
which the Borrower has historically obtained letters of credit,
or for any other purpose that is reasonably acceptable to the
Administrative Agent (including, without limitation, the Letters
of Credit issued as described in the third paragraph of the
Introductory Statement above), and (iv)in form and substance
reasonably satisfactory to the Issuing Bank.
"LETTER OF CREDIT FEES" shall mean the fees payable in
respect of Letters of Credit pursuant to Section 2.21.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time,
the sum of (a)with respect to Letters of Credit outstanding at
such time, the aggregate maximum amount that then is or at any
time thereafter may become available for drawing or payment
thereunder PLUS (b)all amounts theretofore drawn or paid under
Letters of Credit for which the Issuing Bank has not then been
reimbursed.
"LIBOR RATE" shall mean, for any Interest Period for any
Eurodollar Borrowing, the rate (rounded upwards, if necessary,
to the next 1/16 of 1%) at which dollar deposits approximately
equal in principal amount to such Eurodollar Borrowing and for a
maturity comparable to such Interest Period are offered to the
principal London office of the Administrative Agent in
immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including
any conditional sale or other title retention agreement or any
lease in the nature thereof).
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the
Letters of Credit, the Fee Letter, all Borrowing Base
Certificates, the Blocked Account Agreements, the Access
Agreements, the Payment Direction Agreements and any other
instrument or agreement executed and delivered in connection
herewith.
"LOAN VALUE" shall mean the amount determined by the
Administrative Agent from time to time, in its reasonable
discretion and consistent with the Administrative Agent's usual
business practices and policies for similar borrowers similarly
situated, as an appropriate estimate of the value of Eligible
Receivables, Eligible LC Inventory (which shall not exceed the
amount that may be drawn under such Letters of Credit), and
Eligible Inventory (which determination shall take into account
the following factors, among others: (i) the cost thereof, (a)
as determined under the retail method of accounting as reflected
in the Borrower's stock ledger (the cost value of the Inventory
in the stock ledger will be adjusted based upon the lowest
ticketed retail price at which such Inventory is offered to the
public, after all permanent ▇▇▇▇-▇▇▇▇▇ (whether or not such
price is then reflected on the Borrower's accounting system))
or, (b) with respect to warehouse and in-transit inventory,
determined under the cost method of accounting, (ii) the
first-in, first-out accounting valuation method, (iii) the
Borrower's accounting practices, known to the Administrative
Agent and in effect on the date hereof, and (iv)excluding any
capitalization costs or other non-purchase price charges (other
than "freight-in"), such as intracompany freight, used in the
Borrower's calculation of cost of goods sold.
"LOANS" shall mean all loans (including, without
limitation, Agent Advances) at any time made to the Borrower or
for account of the Borrower pursuant to this Agreement.
"MATURITY DATE" shall mean June30, 1999.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean a Single Employer Plan,
which (i)is maintained for employees of the Borrower or an ERISA
Affiliate and at least one Person other than the Borrower and
its ERISA Affiliates or (ii)was so maintained and in respect of
which the Borrower or an ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such Plan has
been or were to be terminated.
"NOTES" shall mean the promissory notes of the Borrower (i)
substantially in the form of ExhibitB-1, each payable to the
order of a Lender, evidencing the Loans and (ii) substantially
in the form of Exhibit B-2, payable to the Administrative Agent,
evidencing the Agent Advances.
"OBLIGATIONS" shall mean (a)the due and punctual payment of
principal of and interest on the Loans and the Notes and the
reimbursement of all amounts drawn under Letters of Credit, and
(b)the due and punctual payment of the Fees and all other
present and future, fixed or contingent, monetary obligations of
the Borrower and the Guarantors to the Lenders, the Issuing
Bank, the Agent, the Co-Agents and the Administrative Agent
under the Loan Documents.
"ORDER" shall mean the Order of the Bankruptcy Court
described in Section 4.01(c).
"OTHER TAXES" shall have the meaning set forth in Section
2.18(b).
"OVERADVANCE AMOUNT" shall mean on any day from and
including March 1 through and including December 15 of any year,
the lesser of (x) 5% of the then Loan Value of the then Eligible
Inventory PLUS (without duplication) 5% of the then Loan Value
of the then Eligible LC Inventory, and (y) $20,000,000.
"OVERADVANCE MARGIN" shall mean (i) .50% per annum for any
month in which the Borrower has any Loans outstanding by
utilizing the Overadvance Amount under the Borrowing Base, or
(ii) at all other times, zero.
"PAYMENT DIRECTION AGREEMENT" shall mean an agreement among
the Borrower, the Administrative Agent and each Credit Card
Obligor, in form and substance satisfactory to the
Administrative Agent, providing for the direct payment to the
BBNA Concentration Account of all amounts due to the Borrower
from such Credit Card Obligor
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any successor agency or entity performing substantially the
same functions.
"PENSION PLAN" shall mean a defined benefit pension or
retirement plan which meets and is subject to the requirements
of Section 401(a) of the Code.
"PERMITTED INVESTMENTS" shall mean:
(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
payable in Dollars and maturing within twelve months from the
date of acquisition thereof;
(b) investments in certificates of deposit, banker's
acceptances and time deposits (including Eurodollar time
deposits) payable in Dollars and maturing within six months from
the date of acquisition thereof issued or guaranteed by or
placed with (i)any domestic office of the Administrative Agent
or (ii)any domestic office of any other commercial bank of
recognized standing 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
$250,000,000 and is the principal banking Subsidiary of a bank
holding company having a long-term unsecured debt rating of at
least "A" or the equivalent thereof from Standard & Poor's
Corporation or at least "A2" or the equivalent thereof from
▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in commercial paper payable in
Dollars and maturing within six months from the date of
acquisition thereof and issued by (i)the holding company of the
Administrative Agent or (ii)the holding company of any other
commercial bank of recognized standing organized under the laws
of the United States of America or any State thereof that has
(A)a combined capital and surplus in excess of $250,000,000 and
(B)commercial paper rated at least "A" or the equivalent thereof
from Standard & Poor's Corporation or of at least "A2" or the
equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) investments in repurchase obligations payable in
Dollars with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered
into with any office of a bank or trust company meeting the
qualifications specified in clause (b) above;
(e) investments in money market funds substantially
all the assets of which are comprised of securities of the types
described in clauses (a) through (d) above; and
(f) to the extent owned on the Filing Date,
investments in the capital stock or partnership interests of any
direct or indirect subsidiary of the Borrower.
"PERMITTED LIENS" shall mean (i)Liens imposed by law (other
than Environmental Liens and any Lien imposed under ERISA) for
taxes, assessments or charges of any Governmental Authority for
claims not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with GAAP; (ii)statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and other
Liens (other than Environmental Liens and any Lien imposed under
ERISA) imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP; (iii)Liens (other than any
Lien imposed under ERISA) incurred or deposits made in the
ordinary course of business (including, without limitation,
surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts; (iv)easements (including, without
limitation, reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded), which do not
interfere materially with the ordinary conduct of the business
of the Borrower or any Guarantor, as the case may be, and which
do not materially detract from the value of the property to
which they attach or materially impair the use thereof to the
Borrower or any Guarantor, as the case may be; (v) purchase
money Liens (a) existing on the Closing Date upon or in any
property (other than Inventory) acquired or held in the ordinary
course of business to secure the purchase price of such property
or (b) to secure Indebtedness permitted by Section 6.03(iii) and
solely for the purpose of financing the acquisition of such
property; and (vi)extensions, renewals or replacements of any
Lien referred to in paragraphs (i) through (v) above; PROVIDED
that the principal amount of the obligation secured thereby is
not increased and that any such extension, renewal or
replacement is limited to the property originally encumbered
thereby.
"PERSON" shall mean any natural person, corporation,
partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"PLAN" shall mean a Single Employer Plan or a Multiemployer
Plan.
"PRE-PETITION CLAIM PAYMENT" shall mean a payment or
transfer of property on account of any claim that was
outstanding against the Borrower or any Guarantor on the Filing
Date, including (without limitation) payments or transfers that
are (a)merchandise returns credited to any pre-petition claim,
(b)adequate protection payments on secured claims, (c)payments
made to cure pre-petition defaults on an unexpired lease or
executory contract, (d)returns of goods based on reclamation
rights, or the grant or payment of any administrative priority
claim in lieu of any such return of goods, and (e)trade payables
arising from the purchase of Inventory not otherwise permitted
to be acquired under this Agreement.
"PURCHASE AND SERVICE AGREEMENT" shall mean that certain
Amended and Restated Purchase and Service Agreement dated as of
August 1, 1995, among Bradlees Stores, Inc., as seller,
Bradlees, Inc., as guarantor, and Citicorp Retail Services,
Inc., as purchaser and servicer.
"RECEIVABLES" shall mean, with respect to any Credit Card
Obligor, the indebtedness of such Credit Card Obligor to the
Borrower under a charge account agreement arising from a sale of
merchandise or services by the Borrower.
"REGISTER" shall have the meaning set forth in Section
10.03(d).
"REORGANIZATION PLAN" shall mean a plan of reorganization
in any of the Cases.
"REQUIRED LENDERS" shall mean, at any time, Lenders having
Loans outstanding representing at least 51% of the total Loans
outstanding; PROVIDED, HOWEVER, that if no Loans are
outstanding, Required Lenders shall be those Lenders having
Commitments representing at least 51% of the Total Commitment
(without giving effect to any termination of all of the
Commitments pursuant to Section 7.01).
"SETTLEMENT DATE" shall have the meaning set forth in
Section 2.03(d).
"SHRINK RESERVE" shall mean, as of the date of any
determination thereof, (A)the positive result, if any, of
subtracting (i)the shrinkage percentage reserve then maintained
by the Borrower in its stock ledger from (ii)shrinkage (book to
physical differences), calculated as a percentage of cumulative
net sales since the last physical inventory, for the Borrower's
most recent physical inventory with respect to Inventory located
at stores and distribution centers, MULTIPLIED BY (B)cumulative
sales since the last physical adjustment by the Borrower.
"SINGLE EMPLOYER PLAN" shall mean a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (i)is
maintained for employees of the Borrower or an ERISA Affiliate
or (ii)was so maintained and in respect of which the Borrower
could have liability under Section 4069 of ERISA in the event
such Plan has been or were to be terminated.
"SPECIFIED LOCATION SALES" shall have the meaning set forth
in Section 2.13(c).
"STATUTORY RESERVES" shall mean, on any date, the
percentage (expressed as a decimal) established by the Board and
any other banking authority which is the then stated maximum
rate for all reserves (including but not limited to any
emergency, supplemental or other marginal reserve requirements)
applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category
of liabilities under Regulation D issued by the Board, as in
effect from time to time). Such reserve percentages shall
include, without limitation, those imposed pursuant to said
Regulation. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in
such percentage.
"SUBSIDIARY" shall mean, with respect to any Person (herein
referred to as the "PARENT"), any corporation, association or
other business entity (whether now existing or hereafter
organized) of which at least a majority of the securities or
other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent
or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent.
"SUPERPRIORITY CLAIM" shall mean a claim against the
Borrower and any Guarantor in any of the Cases which is an
administrative expense claim having priority over any or all
administrative expenses of the kind specified in Sections
503(b), 507(b) and 364(c) of the Bankruptcy Code.
"TAX REFUND ACCOUNT" shall have the meaning set forth in
Section 2.13(c).
"TAX REFUND PROCEEDS" shall have the meaning set forth in
Section 2.13(c).
"TAXES" shall have the meaning set forth in Section 2.18(a).
"TERMINATION DATE" shall mean the earliest to occur of
(i)the effective date of any plan of reorganization that is
confirmed in any of the Cases pursuant to an order entered by
the Bankruptcy Court, (ii)the Maturity Date, and (iii)the date
on which the maturity of the Loans is accelerated and the
commitments of the Lenders are terminated in accordance with
Section 7.01.
"TERMINATION EVENT" shall mean (i)a "reportable event", as
such term is described in Section 4043 of ERISA and the
regulations issued thereunder (other than a "reportable event"
not subject to the provision for 30-day notice to the PBGC under
Section 4043 of ERISA or such regulations) or an event described
in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR 2615.21 or 2615.23, or (ii)the
withdrawal of the Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a
"substantial employer", as such term is defined in Section
4001(c) of ERISA, or the incurrence of liability by the Borrower
or any ERISA Affiliate under Section 4064 of ERISA upon the
termination of a Multiple Employer Plan, or (iii)providing
notice of intent to terminate a Plan pursuant to Section 4041(c)
of ERISA or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (iv)the institution of
proceedings to terminate a Plan by the PBGC under Section 4042
of ERISA, or (v)any other event or condition (other than the
commencement of the Cases and the failure to have made any
contribution accrued as of the Filing Date but not paid) which
would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of or the appointment of a
trustee to administer, any Plan, or the imposition of any
liability under Title IV of ERISA (other than for the payment of
premiums to the PBGC).
"TOTAL COMMITMENT" shall mean, at any time, the sum of the
Commitments at such time.
"TRANSFEREE" shall have the meaning set forth in Section
2.18(a).
"TYPE" when used in respect of any Loan or Borrowing shall
refer to the rate of interest by reference to which interest on
such Loan or on the Loans comprising such Borrowing is
determined.
"UNUSED COMMITMENT" shall mean, on any day, (a)the then
aggregate amount of the Commitments MINUS (b)the sum of (i)the
principal amount of Loans then outstanding and (ii)the then
Letter of Credit Outstandings.
"WESTBURY-NORTH ATTLEBORO ESCROW ACCOUNTS" shall have the
meaning set forth in Section 2.13(c).
"WESTBURY-NORTH ATTLEBORO PROCEEDS" shall have the meaning
set forth in Section 2.13(c).
"WITHDRAWAL LIABILITY" shall have the meaning set forth
under Part I of Subtitle E of Title IV of ERISA.
"YONKERS LOCATION SALE" shall have the meaning set forth in
Section 2.13(c).
"YONKERS ESCROW ACCOUNT" shall have the meaning set forth
in Section 2.13(c).
"YONKERS PROCEEDS" shall have the meaning set forth in
Section 2.13(c).
SECTION 1.02.TERMS GENERALLY. The definitions in Section
1.01 shall apply equally to both the singular and plural forms
of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles
and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as
in effect from time to time; PROVIDED, HOWEVER, that for
purposes of determining compliance with any covenant set forth
in Article VI, such terms shall be construed in accordance with
GAAP as in effect on the date of this Agreement applied on a
basis consistent with the application used in the Borrower's
audited financial statements for the fiscal year ended on
February 1, 1997.
II. AMOUNT AND TERMS OF CREDIT
SECTION 2.01.COMMITMENT OF THE LENDERS.
(a) Each Lender severally and not jointly with any
other Lender agrees, upon the terms and subject to the
conditions herein set forth, to extend credit to the Borrower on
a revolving basis, in the form of Credit Extensions and in an
amount equal to such ▇▇▇▇▇▇'s Commitment Percentage thereof,
subject to the following limitations:
(1) The aggregate outstanding amount of the
Credit Extensions shall not at any time exceed the lowest of
(i)$250,000,000 or any lesser amount to which the Commitments
have then been reduced by the Borrower pursuant to Sections 2.07
or 2.10, (ii)the then amount of the Borrowing Base, plus the
cash held in the Cash Collateral Account pursuant to
Sections2.02, 2.10(a) and 2.14(a) (item "FOURTH"), and (iii)the
amount of credit which the Borrower is then authorized to incur,
and which each Guarantor is then authorized to guarantee, under
the Order or any other order of the Bankruptcy Court or any
other court of competent jurisdiction.
(2) No Lender shall be obligated to issue any
Letter of Credit, and Letters of Credit shall be available from
the Issuing Bank, subject to the ratable participation of all
Lenders, as set forth in Section 2.02. The Borrower will not at
any time permit the aggregate Letter of Credit Outstandings to
exceed $125,000,000.
(3) Subject to all of the other provisions of
this Credit Agreement, Loans that are repaid may be reborrowed
prior to the Termination Date. No new Credit Extension,
however, shall be made to the Borrower after the Termination
Date.
(b) Each Borrowing of Loans (other than Agent
Advances) shall be made by the Lenders pro rata in accordance
--- ----
with their respective Commitments. The failure of any Lender to
make any such Loan shall neither relieve any other Lender of its
obligation to fund its Loan in accordance with the provisions of
this Agreement nor increase the obligation of any such other
Lender.
SECTION 2.02.LETTERS OF CREDIT.
(a) Upon the terms and subject to the conditions
herein set forth, the Borrower may request the Issuing Bank, at
any time and from time to time after the date hereof and prior
to the Termination Date, to issue, and subject to the terms and
conditions contained herein, the Issuing Bank shall issue, for
the account of the Borrower one or more Letters of Credit;
PROVIDED that no Letter of Credit shall be issued if after
giving effect to such issuance (i)the aggregate Letter of Credit
Outstandings shall exceed $125,000,000, or (ii)the aggregate
Credit Extensions would exceed the limitation set forth in
Section 2.01(a)(1); and PROVIDED FURTHER that no Letter of
Credit shall be issued if the Issuing Bank shall have received
notice from the Administrative Agent or the Required Lenders
that the conditions to such issuance have not been met.
(b) No Letter of Credit shall have an Expiry Date
later than the 90th day after the Maturity Date. In the case of
each Letter of Credit issued with an expiry date later than the
Termination Date, the Borrower shall, on or prior to the
Termination Date, either (i)cause such Letter of Credit to be
returned to the Issuing Bank undrawn and marked "cancelled" and
otherwise discharged in a manner satisfactory to the Issuing
Bank or (ii)if the Borrower is unable to return and discharge
such Letter of Credit, either (x)provide a "back-to-back" letter
of credit issued by a bank and on terms in form and substance
satisfactory to the Issuing Bank and the Administrative Agent
(in their sole and absolute discretion), in an amount equal to
105% of the undrawn amount of such Letter of Credit or
(y)deposit cash in the Cash Collateral Account in an amount
equal to 105% of the undrawn amount under such Letter of Credit.
(c) The Borrower shall pay to the Administrative
Agent, for the account of the Issuing Bank and in addition to
all Letter of Credit Fees provided for in Section 2.21, a
fronting fee equal to 0.125% per annum of the average daily
balance of the maximum amount that at any time is available for
drawing or payment under each Letter of Credit, payable
quarterly in arrears, as well as such fees and charges in
connection with the issuance, negotiation, settlement, amendment
and processing of each Letter of Credit issued by the Issuing
Bank as are customarily imposed by the Issuing Bank from time to
time in connection with letter of credit transactions.
(d) Drafts drawn under each Letter of Credit shall be
reimbursed by the Borrower in Dollars not later than the first
Business Day following the date of draw and shall bear interest
from the date of draw until the first Business Day following the
date of draw at a rate per annum equal to the Alternate Base
Rate and thereafter until reimbursed in full at a rate per annum
equal to the Alternate Base Rate PLUS 2.00% per annum (computed
on the basis of the actual number of days elapsed over any year
of 360 days). The Borrower shall effect such reimbursement
(x)if such draw occurs prior to the Termination Date (or the
earlier date of termination of the Total Commitment), through a
Borrowing of Loans without the satisfaction of the conditions
precedent set forth in Section 4.02, or (y)if such draw occurs
on or after the Termination Date (or the earlier date of
termination of the Total Commitment), in cash. Each Lender
agrees to fund its Commitment Percentage of the Loans described
in clause (x) of the preceding sentence notwithstanding a
failure to satisfy the applicable lending conditions thereto or
the provisions of Sections 2.01 and 2.02 or the occurrence of
the Termination Date.
(e) Immediately upon the issuance of any Letter of
Credit by the Issuing Bank, the Issuing Bank shall be deemed to
have sold to each Lender and each such Lender shall be deemed
unconditionally and irrevocably to have purchased from the
Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such ▇▇▇▇▇▇'s
Commitment Percentage, in such Letter of Credit, each drawing
thereunder and the obligations of the Borrower and the
Guarantors under this Agreement with respect thereto. Upon any
change in the Commitments pursuant to Section 10.03, it is
hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the
participations hereby created to reflect the new Commitment
Percentages of the assigning and assignee Lenders. Any action
taken or omitted by the Issuing Bank under or in connection with
a Letter of Credit, if taken or omitted in the absence of gross
negligence or wilful misconduct, shall not create for the
Issuing Bank any resulting liability to any Lender.
(f) In the event that the Issuing Bank makes any
payment under any Letter of Credit and the Borrower shall not
have reimbursed such amount in full to the Issuing Bank pursuant
to this Section 2.02, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of
such failure, and each Lender shall promptly and unconditionally
pay to the Administrative Agent for the account of the Issuing
Bank the amount of such ▇▇▇▇▇▇'s Commitment Percentage of such
unreimbursed payment in Dollars and in same day funds. If the
Issuing Bank so notifies the Administrative Agent, and the
Administrative Agent so notifies the Lenders prior to 11:00
a.m., Boston time, on any Business Day, each such Lender shall
make available to the Issuing Bank such ▇▇▇▇▇▇'s Commitment
Percentage of the amount of such payment on such Business Day in
same day funds. If and to the extent such Lender shall not have
so made its Commitment Percentage of the amount of such payment
available to the Issuing Bank, such Lender agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date
such amount is paid to the Administrative Agent for the account
of the Issuing Bank at the Federal Funds Effective Rate. The
failure of any Lender to make available to the Issuing Bank its
Commitment Percentage of any payment under any Letter of Credit
shall neither relieve any Lender of its obligation hereunder to
make available to the Issuing Bank its Commitment Percentage of
any payment under any Letter of Credit on the date required, as
specified above, nor increase the obligation of such other
Lender. Whenever any Lender has made payments to the Issuing
Bank in respect of any reimbursement obligation for any Letter
of Credit, such Lender shall be entitled to share ratably, based
on its Commitment Percentage, in all payments and collections
thereafter received on account of such reimbursement obligation.
(g) Whenever the Borrower desires that the Issuing
Bank issue a Letter of Credit, it shall give to the Issuing Bank
at least two Business Days' prior written (including
telegraphic, telex, facsimile or cable communication) notice (or
such shorter period as may be agreed upon in writing by the
Issuing Bank and the Borrower) specifying the date on which the
proposed Letter of Credit is to be issued (which shall be a
Business Day), the stated amount of the Letter of Credit so
requested, the expiration date of such Letter of Credit, the
name and address of the beneficiary thereof, and the provisions
thereof.
(h) The obligations of the Borrower to reimburse the
Issuing Bank for drawings made under any Letter of Credit shall
be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all
circumstances, including, without limitation (it being
understood that any such payment by the Borrower shall be
without prejudice to, and shall not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of
the payment by the Issuing Bank of any draft or the
reimbursement by the Borrower thereof): (i)any lack of validity
or enforceability of any Letter of Credit; (ii)the existence of
any claim, setoff, defense or other right which the Borrower or
any Guarantor may have at any time against a beneficiary of any
Letter of Credit or against any of the Lenders, whether in
connection with this Agreement, the transactions contemplated
herein or any unrelated transaction; (iii)any draft, demand,
certificate or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or
inaccurate in any respect; (iv)payment by the Issuing Bank of
any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the
terms of such Letter of Credit; (v)any other circumstance or
happening whatsoever, whether or not similar to any of the
foregoing; or (vi)the fact that any Event of Default shall have
occurred and be continuing.
SECTION 2.03.MAKING OF LOANS.
(a) Except as set forth in Section 2.09, Loans by the
Lenders shall be either ABR Loans or (so long as no Event of
Default has occurred and is continuing and the making of
Eurodollar Loans by any Lender is not illegal or impractical)
Eurodollar Loans as the Borrower may request subject to and in
accordance with this Section 2.03. All Loans made pursuant to
the same Borrowing shall, unless otherwise specifically provided
herein, be Loans of the same Type. Each Lender may fulfill its
Commitment with respect to any Loan by causing any lending
office of such Lender to make such Loan; but any such use of a
lending office shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of the
applicable Note. Each Lender shall, subject to its overall
policy considerations, use reasonable efforts (but shall not be
obligated) to select a lending office which will not result in
the payment of increased costs by the Borrower pursuant to
Section 2.15. Subject to the other provisions of this Section
2.03 and the provisions of Section 2.16, Borrowings of Loans of
more than one Type may be incurred at the same time, but no more
than five Borrowings of Eurodollar Loans may be outstanding at
any time.
(b) The Borrower shall give the Administrative Agent
two business days' prior notice of each Borrowing of Eurodollar
Loans and same-day notice of each Borrowing of ABR Loans, so
long as notice is given prior to 12:00 Noon, Boston time. Such
notice shall be irrevocable and shall specify the amount of the
proposed Borrowing (which shall not be less than $1,000,000 in
the case of Eurodollar Loans) and the date thereof (which shall
be a Business Day) and shall contain disbursement instructions.
Such notice, to be effective, must be received by the
Administrative Agent not later than 1:00 p.m., Boston time, on
the second Business Day in the case of Eurodollar Loans and not
later than 12:00 Noon, Boston time, on the same day in the case
of ABR Loans, on which such Borrowing is to be made. Such
notice shall specify whether the Borrowing then being requested
is to be a Borrowing of ABR Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period with respect thereto. If
no election of Interest Period is specified in any such notice
for a Borrowing of Eurodollar Loans, such notice shall be deemed
a request for an Interest Period of one month. If no election
is made as to the Type of Loan, such notice shall be deemed a
request for Borrowing of ABR Loans (subject to Section 2.03(a)).
The Administrative Agent shall promptly notify each Lender of
its proportionate share of such Borrowing, the date of such
Borrowing, the Type of Borrowing being requested and the
Interest Period or Interest Periods applicable thereto, as
appropriate. On the borrowing date specified in such notice,
each Lender shall make its share of the Borrowing available at
the office of the Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later than 3:00 p.m., Boston
time, in immediately available funds. Upon receipt of the funds
made available by the Lenders to fund any borrowing hereunder,
the Administrative Agent shall disburse such funds in the manner
specified in the notice of borrowing delivered by the Borrower
and shall use reasonable efforts to make the funds so received
from the Lenders available to the Borrower no later than 4:00
p.m., Boston time.
(c) The Administrative Agent is authorized by the
Lenders, but is not obligated, to make Agent Advances up to
$15,000,000 in the aggregate outstanding at any time, consisting
only of ABR Loans upon a notice of Borrowing received by the
Administrative Agent (which notice, at the Administrative
Agent's discretion, may be submitted prior to 12:00 Noon, Boston
time, on the same day for which such Agent Advance is
requested). Agent Advances (together with all other Credit
Extensions) may not at any time cause the Borrower to be in
violation of the provisions of Section 2.10(a) hereof. Agent
Advances shall be subject to periodic settlement with the
Lenders under the following subsection.
(d) (i) The amount of each Lender's Commitment
Percentage of outstanding Loans (including Agent Advances) shall
be computed weekly (or more frequently in the Administrative
Agent's discretion) and shall be adjusted upward or downward
based on all Loans (including Agent Advances) and repayments of
Loans (including Agent Advances) received by the Administrative
Agent as of 3:00p.m., Boston time, on the first Business Day
following the end of the period specified by the Administrative
Agent (such date, the "SETTLEMENT DATE").
(ii) The Administrative Agent shall deliver to
each of the Lenders promptly after the Settlement Date a summary
statement of the amount of outstanding Loans (including Agent
Advances) for the period and the amount of repayments received
for the period. As reflected on the summary statement: (x) the
Administrative Agent shall transfer to each Lender its
Commitment Percentage of repayments (after accounting for
unreimbursed Agent Advances) and (y) each Lender shall transfer
to the Administrative Agent (as provided below), or the Agent
shall transfer to each Lender, such amounts as are necessary to
insure that, after giving effect to all such transfers, the
amount of Loans made by each Lender with respect to Loans
(including Agent Advances) shall be equal to such Lender's
Commitment Percentage of Loans outstanding as of such Settlement
Date. If the summary statement requires transfers to be made to
the Administrative Agent by the Lenders and is received prior to
12:00Noon, Boston time, on a Business Day, such transfers shall
be made in immediately available funds no later than 3:00p.m.,
Boston time, that day; and, if received after 12:00Noon, Boston
time, then no later than 3:00p.m., Boston time, on the next
Business Day. The obligation of each Lender to transfer such
funds is irrevocable, unconditional and without recourse to or
warranty by the Administrative Agent and, notwithstanding the
foregoing, on the day that the Administrative Agent makes an
Agent Advance hereunder, each Lender shall be deemed to have
made its Commitment Percentage of such Agent Advance on such
day. If and to the extent any Lender shall not have so made its
transfer to the Administrative Agent, such ▇▇▇▇▇▇ agrees to pay
to the Administrative Agent, forthwith on demand such amount,
together with interest thereon, for each day from such date
until the date such amount is paid to the Administrative Agent
at the Federal Funds Effective Rate.
SECTION 2.04.NOTES; REPAYMENT OF LOANS.
(a) The Loans outstanding to each Lender (and to the
Administrative Agent, with respect to Agent Advances) shall be
evidenced by a Note duly executed on behalf of the Borrower,
dated the Closing Date, in substantially the form attached
hereto as Exhibit B-1 or B-2, as applicable, payable to the
order of such Lender (or the Administrative Agent, as
applicable) in an aggregate principal amount equal to such
▇▇▇▇▇▇'s Commitment (or, in the case of the Note evidencing the
Agent Advances, $15,000,000).
(b) The outstanding principal balance of all Loans,
as evidenced by such Notes, shall be payable on the Termination
Date (subject to earlier repayment as provided below). Each
Note shall bear interest from the date thereof on the
outstanding principal balance thereof as set forth in this
Article II. Each Lender is hereby authorized by the Borrower to
endorse on a schedule attached to each Note delivered to such
Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such
Lender's internal records, an appropriate notation evidencing
the date and amount of each Loan from such Lender, each payment
and prepayment of principal of any such Loan, each payment of
interest on any such Loan and the other information provided for
on such schedule; PROVIDED, HOWEVER, that the failure of any
Lender to make such a notation or any error therein shall not
affect the obligation of the Borrower to repay the Loans made by
such Lender in accordance with the terms of this Agreement and
the applicable Notes.
SECTION 2.05.INTEREST ON LOANS.
(a) Subject to Section 2.06, each ABR Loan shall bear
interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum that shall
be equal to the then Alternate Base Rate, PLUS the Overadvance
Margin.
(b) Subject to Section 2.06, each Eurodollar Loan
shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum
equal, during each Interest Period applicable thereto, to the
Adjusted LIBOR Rate for such Interest Period, PLUS the
Eurodollar Applicable Margin, plus the Overadvance Margin.
(c) Accrued interest on all Loans shall be payable in
arrears on each Interest Payment Date applicable thereto, at
maturity (whether by acceleration or otherwise), after such
maturity on demand and (with respect to Eurodollar Loans) upon
any repayment or prepayment thereof (on the amount prepaid).
(d) All outstanding Loans that on any day are not, in
accordance with the provisions of this Agreement, Eurodollar
Loans shall, for such day, constitute ABR Loans and, subject to
Section 2.06, shall bear interest with reference to the
Alternate Base Rate as set forth in Section 2.05(a).
SECTION 2.06.DEFAULT INTEREST. Effective upon the
occurrence of any Event of Default and at all times thereafter
while such Event of Default is continuing, interest shall accrue
on all outstanding Loans (after as well as before judgment) at a
rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the Alternate
Base Rate PLUS 2.00% per annum, and such interest shall be
payable on demand.
SECTION 2.07.OPTIONAL TERMINATION OR REDUCTION OF
COMMITMENTS. Upon at least two Business Days' prior written
notice to the Administrative Agent, the Borrower may at any time
in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments. Each such reduction shall
be in the principal amount of $5,000,000 or any integral
multiple thereof. Such reduction or termination shall be
applied ratably to the Commitment of each Lender and shall be
irrevocable when given. At the effective time of each such
reduction or termination, the Borrower shall pay to the
Administrative Agent (i)all Commitment Fees accrued on the
amount of the Commitments so terminated or reduced through the
date thereof, (ii)any amount by which the Credit Extensions
outstanding on such date exceed the amount to which the
Commitments, as the case may be, are to be reduced effective on
such date and (iii)all earned and unpaid Fees with respect to
such Credit Extensions, in each case pro rata based on the
amount prepaid.
--- ----
SECTION 2.08.ALTERNATE RATE OF INTEREST. In the event, and
on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Loan the
Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower absent
manifest error) that reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR Rate, the
Administrative Agent shall, as soon as practicable thereafter,
give written or telegraphic notice of such determination to the
Borrower and the Lenders. After such notice shall have been
given and until the circumstances giving rise to such notice no
longer exist, any request by the Borrower for any funding as,
continuation of or conversion into a Eurodollar Borrowing shall
be deemed a request for a Borrowing of ABR Loans.
SECTION 2.09. REFINANCING OF LOANS. The Borrower shall
have the right at any time, on two Business Days' prior
irrevocable notice to the Administrative Agent (which notice, to
be effective, must be received by the Administrative Agent not
later than 1:00 p.m., Boston time, on the second Business Day
preceding the date of any refinancing), (x)to refinance any
outstanding Borrowing or Borrowings of Loans of one Type (or a
portion thereof) with a Borrowing of Loans of the other Type or
(y)to continue an outstanding Borrowing of Eurodollar Loans for
an additional Interest Period, subject to the following:
(a) no Borrowing or Loans may be refinanced into, or
continued as, Eurodollar Loans at any time when an Event of
Default has occurred and is continuing;
(b) if less than a full Borrowing of Loans is
refinanced, such refinancing shall be made pro rata among the
--- ----
Lenders, as applicable, in accordance with the respective
principal amounts of the Loans comprising such Borrowing held by
such Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being
refinanced into or continued as Eurodollar Loans shall be at
least $1,000,000;
(d) each Lender shall effect each refinancing by
applying the proceeds of its new Eurodollar Loan or ABR Loan, as
the case may be, to its Loan being refinanced;
(e) the Interest Period with respect to a Borrowing
of Eurodollar Loans effected by a refinancing or in respect to
the Borrowing of Eurodollar Loans being continued as Eurodollar
Loans shall commence on the date of refinancing or the
expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced
only on the last day of an Interest Period applicable thereto;
(g) each request for a refinancing with a Borrowing
of Eurodollar Loans which fails to state an applicable Interest
Period shall be deemed to be a request for an Interest Period of
one month; and
(h) no more than five Borrowings of Eurodollar Loans
may be outstanding at any time.
If the Borrower does not give notice to refinance any Borrowing
of Eurodollar Loans, or does not give notice to continue, or
does not have the right to continue, any Borrowing as Eurodollar
Loans, in each case as provided above, such Borrowing shall
automatically be refinanced with a Borrowing of ABR Loans at the
expiration of the then-current Interest Period. The
Administrative Agent shall, after it receives notice from the
Borrower, promptly give each Lender notice of any refinancing,
in whole or part, of any Loan made by such Lender.
SECTION 2.10.MANDATORY PREPAYMENT; COMMITMENT TERMINATION;
CASH COLLATERAL. The outstanding Obligations shall be subject to
mandatory prepayment as follows:
(a) If at any time the amount of the Credit
Extensions exceeds the lowest of (i)the then amount of the
Commitments, (ii)the then amount of the Borrowing Base, plus the
cash held in the Cash Collateral Account pursuant to
Sections2.02 and 2.14, and (iii)the amount of credit which the
Borrower is then authorized to incur, and which each Guarantor
is then authorized to guarantee, under the Order or any other
order of the Bankruptcy Court or any other court of competent
jurisdiction, the Borrower will within one Business Day
(i)prepay the Loans in an amount necessary to eliminate such
excess and (ii)if, after giving effect to the prepayment in full
of all outstanding Loans such excess has not been eliminated,
deposit cash to the Cash Collateral Account in an amount equal
to 105% of the remaining amount of such excess.
(b) Upon the Termination Date, the credit
facility provided hereunder shall be terminated in full and the
Borrower shall pay, in full and in cash, all outstanding Loans
and all other outstanding Obligations, except that if any Letter
of Credit then remains outstanding, the Borrower shall with
respect to outstanding Letters of Credit, (i) deposit into the
Cash Collateral Account an amount sufficient to cause the funds
on deposit in the Cash Collateral Account to be equal to 105% of
the sum of then Letter of Credit Outstandings or (ii) secure its
reimbursement obligations thereunder with a letter of credit in
form and substance and from an issuer satisfactory to the
Issuing Bank in its sole discretion.
SECTION 2.11.OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF
LENDERS.
(a) The Borrower shall have the right at any time and
from time to time to prepay outstanding Loans in whole or in
part, (x)with respect to Eurodollar Loans, upon at least two
Business Days' prior written, telex or facsimile notice to the
Administrative Agent prior to 1:00 p.m., Boston time, and
(y)with respect to ABR Loans, on the same Business Day if
written, telex or facsimile notice is received by the
Administrative Agent prior to 3:00 p.m., Boston time, subject to
the following limitations:
(1) All prepayments shall be paid to the
Administrative Agent for application, FIRST, to the prepayment
of outstanding Agent Advances, SECOND, to the prepayment of
outstanding Loans ratably in accordance with each Lender's
Commitment Percentage, and THIRD, to the funding of a cash
collateral deposit in the Cash Collateral Account in an amount
equal to 105% of all Letter of Credit Outstandings.
(2) Subject to the foregoing, outstanding ABR
Loans shall be prepaid before outstanding Eurodollar Loans are
prepaid. Each partial prepayment of Eurodollar Loans shall be
in an integral multiple of $1,000,000. No prepayment of
Eurodollar Loans shall be permitted pursuant to this Section
2.11(a) other than on the last day of an Interest Period
applicable thereto, unless the Borrower simultaneously
reimburses the Lenders for all "Breakage Costs" (as defined
below) associated therewith. No partial prepayment of a
Borrowing of Eurodollar Loans shall result in the aggregate
principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $1,000,000.
(3) Each notice of prepayment shall specify the
prepayment date, the principal amount and Type of the Loans to
be prepaid and, in the case of Eurodollar Loans, the Borrowing
or Borrowings pursuant to which such Loans were made. Each
notice of prepayment shall be irrevocable and shall commit the
Borrower to prepay such Loan by the amount and on the date
stated therein. The Administrative Agent shall, promptly after
receiving notice from the Borrower hereunder, notify each Lender
of the principal amount and Type of the Loans held by such
Lender which are to be prepaid, the prepayment date and the
manner of application of the prepayment.
(b) The Borrower shall reimburse each Lender on
demand for any loss incurred or to be incurred by it in the
reemployment of the funds released (i)resulting from any
prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan
required or permitted under this Agreement, if such Loan is
prepaid other than on the last day of the Interest Period for
such Loan or (ii)in the event that after the Borrower delivers a
notice of borrowing under Section 2.03 in respect of Eurodollar
Loans, such Loans are not made on the first day of the Interest
Period specified in such notice of borrowing for any reason
other than a breach by such Lender of its obligations hereunder.
Such loss shall be the amount as reasonably determined by such
Lender as the excess, if any, of (A)the amount of interest which
would have accrued to such Lender on the amount so paid or not
borrowed at a rate of interest equal to the Adjusted LIBOR Rate
for such Loan, for the period from the date of such payment or
failure to borrow to the last day (x)in the case of a payment or
refinancing with ABR Loans other than on the last day of the
Interest Period for such Loan, of the then current Interest
Period for such Loan or (y)in the case of such failure to
borrow, of the Interest Period for such Loan which would have
commenced on the date of such failure to borrow, over (B)the
amount of interest which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable
period with leading banks in the London interbank market
(collectively, "BREAKAGE COSTS"). Any Lender demanding
reimbursement for such loss shall deliver to the Borrower from
time to time one or more certificates setting forth the amount
of such loss as determined by such Lender.
(c) In the event the Borrower fails to prepay any
Loan on the date specified in any prepayment notice delivered
pursuant to Section 2.11(a), the Borrower on demand by any
Lender shall pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for
any loss incurred by such Lender as a result of such failure to
prepay, including, without limitation, any loss, cost or
expenses incurred by reason of the acquisition of deposits or
other funds by such Lender to fulfill deposit obligations
incurred in anticipation of such prepayment. Any Lender
demanding such payment shall deliver to the Borrower from time
to time one or more certificates setting forth the amount of
such loss as determined by such Lender.
(d) Whenever any partial prepayment of Loans are to
be applied to Eurodollar Loans, such Eurodollar Loans shall be
prepaid in the chronological order of their Interest Payment
Dates.
SECTION 2.12. MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF
ACCOUNT.
(a) The Administrative Agent shall maintain an
account on its books in the name of the Borrower (the "LOAN
ACCOUNT") in which the Borrower will be charged with (i)all
Agent Advances and all loans and advances made by the Lenders to
the Borrower or for the Borrower's account, including the Loans,
(ii)all Letter of Credit reimbursement obligations, Fees and
interest that have become payable as herein set forth, and
(iii)if an Event of Default has occurred and is continuing, any
and all other Obligations that have become payable. The
charging of any Obligations to the Loan Account shall not excuse
the Borrower from paying such Obligations in cash when due and
shall not cure or waive any Default or Event of Default that may
have resulted from non-payment thereof or any right or remedy
consequent thereon.
(b) The Loan Account will be credited with all
amounts received by the Administrative Agent from the Borrower
or from others for the Borrower's account, including all amounts
received in the BBNA Concentration Account from the Blocked
Account Banks, and the amounts so credited shall be applied as
set forth in Sections 2.14(a) and (b). In no event shall prior
recourse to any deposit or other accounts, or any other assets,
be a prerequisite to the Administrative Agent's right to demand
payment of any Obligation upon its maturity. Further, the
Administrative Agent shall have no obligation whatsoever to
perform in any respect any of the Borrower's contracts or
obligations relating to any of such accounts. After the end of
each month, the Administrative Agent shall send to the Borrower
a statement accounting for the charges, loans, advances and
other transactions occurring among and between the
Administrative Agent, the Lenders and the Borrower during that
month. The monthly statements shall, absent manifest error, be
an account stated, which is final, conclusive and binding on the
Borrower.
SECTION 2.13. CASH RECEIPTS.
(a) The Borrower and the Administrative Agent shall
upon the Closing Date enter into an agency agreement with Chase,
with respect to its concentration account at Chase contemplated
by the Chase Credit Facility (the "CHASE CONCENTRATION
ACCOUNT"), and with the banks maintaining the deposit accounts
identified on Schedule 3.11(b) (collectively with the Chase
Concentration Account, the "BLOCKED ACCOUNTS"), which agreements
(the "BLOCKED ACCOUNT AGREEMENTS") shall be in form and
substance satisfactory to the Administrative Agent and shall
require the sweep on each Business Day (in accordance with the
Borrower's customary cash deposit procedures outlined in
Schedule 2.13 (as such procedures may be amended from time to
time with the consent of the Administrative Agent)) of all
available cash receipts from the sale of Inventory and other
assets (except as set forth in Sections 2.13(c) and 2.13(h)),
all collections of Receivables and other accounts, and all other
cash payments received by the Borrower or any Guarantor from any
Person or from any source or on account of any sale or other
transaction or event, except only the proceeds of the Loans (all
such non-excluded cash receipts and collections, "CASH
RECEIPTS"), from Blocked Accounts in excess of the amount in
each such account set forth on Schedule 3.11(b) (except upon the
occurrence and during the continuance of an Event of Default,
when all such amounts in such accounts will be swept) to a
concentration account maintained by the Administrative Agent at
BBNA (the "BBNA CONCENTRATION ACCOUNT") (or to the Chase
Concentration Account, provided that Chase has agreed in writing
with the Administrative Agent to promptly forward all such funds
to the BBNA Concentration Account). All Cash Receipts shall be
deposited into a Blocked Account or the BBNA Concentration
Account in accordance with the Borrower's customary cash deposit
procedures outlined in Schedule 2.13. Within thirty (30) days
of the Closing Date the Borrower will close the Chase
Concentration Account and redirect all funds previously directed
to the Chase Concentration Account to the BBNA Concentration
Account. The Borrower shall accurately report to the
Administrative Agent all amounts deposited in the Blocked
Accounts to ensure the proper transfer of funds as set forth
above. If at any time other than the times set forth above any
cash or cash equivalents owned by the Borrower or any Guarantor
are deposited to any account, or held or invested in any manner,
otherwise than in a Blocked Account that is subject to a Blocked
Account Agreement, the Administrative Agent may require the
Borrower to close such Blocked Account and have all funds
therein transferred to an account maintained by the
Administrative Agent at BBNA and all future deposits made to a
Blocked Account which is subject to a Blocked Account Agreement.
Unless otherwise agreed by the Administrative Agent, the
Borrower and the Guarantors may not maintain any bank accounts
other than the ones expressly contemplated herein.
(b) The Borrower may request that the Administrative
Agent close Blocked Accounts and/or open new Blocked Accounts
(or, in either case, permit the Borrower to do so), subject to
the execution and delivery to the Administrative Agent of
appropriate Blocked Account Agreements (unless expressly waived
by the Administrative Agent) consistent with the provisions of
this Section 2.13 and otherwise satisfactory to the
Administrative Agent.
(c) The Borrower may also maintain the following
additional accounts: (i) a tax refund account (the "TAX REFUND
ACCOUNT") at BBNA or Chase in the amount of $6,600,000 (plus
interest accrued after the Closing Date) (the "TAX REFUND
PROCEEDS"), to be paid, upon order of the Bankruptcy Court,
either (x) to Bankers Trust Company, as agent, or (y) to the
Administrative Agent (on behalf of the Borrower) to pay down the
Loans on the Termination Date (with any excess to be returned to
the Borrower), unless, in the case of this subclause (y), the
Loans and the other Obligations have otherwise been paid in full
on the Termination Date, in which such case such amount may be
used by the Borrower to pay up to $25,000,000 (in the aggregate
with any payments under clause (iii) below) in costs associated
with or claims payable under its plan or reorganization
confirmed by the Bankruptcy Court, on or after the effective
date of such plan; (ii) a sale escrow account at BBNA (the
"YONKERS ESCROW ACCOUNT") into which shall be deposited only the
proceeds (the "YONKERS PROCEEDS") from the sale of the
Borrower's or any Guarantor's interest in the real property and
improvements located at the site of the Borrower's location in
Yonkers, New York (the "YONKERS LOCATION SALE"), to be paid,
upon order of the Bankruptcy Court, either to Bankers Trust
Company, as agent, or to the Administrative Agent (on behalf of
the Borrower) to pay down the Loans; (iii) one or more sale
escrow accounts at BBNA (the "WESTBURY-NORTH ATTLEBORO ESCROW
ACCOUNTS" and, together with the Tax Refund Account and the
Yonkers Escrow Account, the "ESCROW ACCOUNTS") into which shall
be deposited only the proceeds (the "WESTBURY-NORTH ATTLEBORO
PROCEEDS" and, together with the Tax Refund Proceeds and the
Yonkers Proceeds, the "ESCROW PROCEEDS") from the sale of the
Borrower's or any Guarantor's interest in the real property and
improvements located at the site of the Borrower's locations in
Westbury, New York and North Attleboro, Massachusetts (together
with the Yonkers Location Sale, the "SPECIFIED LOCATION SALES"),
to be paid, upon order of the Bankruptcy Court, either (A) to
Bankers Trust Company, as agent, or (B) to the Administrative
Agent (on behalf of the Borrower) to pay down the Loans on the
Termination Date (with any excess to be returned to the
Borrower), unless, in the case of this subclause (B), the Loans
and the other Obligations have otherwise been paid in full on
the Termination Date, in which such case such proceeds may be
used by the Borrower to pay up to $25,000,000 (in the aggregate
with any payments under clause (i) above) in costs associated
with or claims payable under its plan or reorganization
confirmed by the Bankruptcy Court, on or after the effective
date of such plan; and (iv) one or more utility deposit accounts
at BBNA or Chase into which shall be deposited only such amounts
as are ordered by the Bankruptcy Court as deposits for the
Debtors' obligations with respect to utility services and to be
paid, upon order of the Bankruptcy Court, either to satisfy such
utility service obligations or to the Administrative Agent (on
behalf of the Borrower) to pay down the Loans. Any bank
accounts of a similar nature to those described in this Section
2.13(c) currently maintained at Chase (and not permitted to
remain at Chase) may be so maintained for no more than 30 days
after the Closing Date (PROVIDED that on or prior to the Closing
Date the Administrative Agent, Chase and the Borrower have
entered into an agency agreement in form and substance
satisfactory to the Administrative Agent and providing for the
implementation of the foregoing requirements with respect to the
funds contained therein) by which time such accounts must be
closed and the amounts therein transferred to the corresponding
accounts at BBNA.
(d) Notwithstanding the foregoing, for the first
seventy-five (75) days following the Closing Date, the Borrower
may maintain with Chase one or more disbursement accounts with a
balance at any time not in excess of the amounts set forth on
Schedule 2.13 (the "CHASE DISBURSEMENT ACCOUNTS"). Such
accounts shall be used by the Borrower for disbursements and
payments (including payroll) in the ordinary course of business
or as otherwise permitted hereunder; PROVIDED that, upon the
occurrence and during the continuance of an Event of Default,
all amounts in such accounts shall be swept by the
Administrative Agent into the BBNA Cash Concentration Account
for application in accordance with Sections 2.14(a) and (b);
PROVIDED, FURTHER, that the Borrower, the Administrative Agent
and Chase have on or before the Closing Date entered into an
agency agreement providing for the implementation of the
foregoing requirements with respect to the Chase Disbursement
Accounts and otherwise in form and substance satisfactory to the
Administrative Agent. No later than seventy-five (75) days
after the Closing Date, the Borrower shall close all of the
Chase Disbursement Accounts and, in lieu thereof, establish with
the Administrative Agent at BBNA one or more disbursement
accounts with a balance at any time not in excess of the amounts
set forth on Schedule 2.13 (the "BBNA DISBURSEMENT ACCOUNTS") to
be used by the Borrower for disbursements and payments
(including payroll) in the ordinary course of business or as
otherwise permitted hereunder; PROVIDED that, upon the
occurrence and during the continuance of an Event of Default,
all amounts in such accounts may be swept by the Administrative
Agent into the BBNA Cash Concentration Account for application
in accordance with Sections 2.14(a) and (b).
(e) Notwithstanding anything in this Agreement to the
contrary, the Borrower's failure to comply with the cash deposit
and sweep requirements set forth in Section 2.13(a) due directly
to earthquake, landslide, hurricane, tornado, fire, flood,
material disruption in armored car service, blizzard, act of God
or the public enemy, act of war, public disorder, rebellion,
sabotage, revolution, epidemic, riot or quarantine shall not be
an Event of Default hereunder unless such failure continues for
3 days.
(f) Notwithstanding the foregoing, so long as no
Default or Event of Default has occurred and shall be continuing
and the Administrative Agent shall not have issued a "Notice of
Redirection" under the Blocked Account Agreements, the Borrower
shall be permitted to make cash withdrawals from the Blocked
Accounts in accordance with its customary procedures in effect
on the date hereof to fund the ordinary-course cash operating
needs of its stores (such as change for registers and funds to
cash employees' paychecks (otherwise commonly referred to as
"coin orders")); PROVIDED that all such withdrawals are replaced
in accordance with the Borrower's customary practices as set
forth on Schedule 2.13.
(g) Notwithstanding the foregoing, upon the sale of
any equipment of the Borrower the proceeds of which are required
to be paid to BTM Capital Corporation ("BTM") pursuant to that
certain Settlement Stipulation, dated as of June 4, 1996 among
the Borrower, BI and BTM, attached hereto as Exhibit E (the "BTM
STIPULATION") (which sale proceeds will not exceed $1,750,000
less future payments made pursuant to the BTM Stipulation in the
aggregate), the Borrower may pay such proceeds to BTM.
(h) Notwithstanding anything contained in this
Agreement to the contrary, to the extent any Escrow Proceeds are
required by order of the Bankruptcy Court to be placed and held
in escrow pending a further order of the Bankruptcy Court, such
Escrow Proceeds shall be so placed and held in escrow and not
released, paid or otherwise distributed to the Borrower, the
Administrative Agent or any other Person, except pursuant to,
and in accordance with, a subsequent order of the Bankruptcy
Court (which order may be included in the order of the
Bankruptcy Court confirming a plan of reorganization of the
Borrower and the Guarantors under chapter 11 of the Bankruptcy
Code). Upon the occurrence and during the continuance of an
Event of Default, and unless the Bankruptcy Court, upon
application of any other party in interest, otherwise orders, to
the extent of Escrow Proceeds then remaining in the Escrow
Accounts, the Administrative Agent will not seek authorization
from the Bankruptcy Court to apply such Escrow Proceeds to
satisfy the Obligations until the earlier to occur of (i)
seventy-five (75) days from the commencement of such Event of
Default as to which the Administrative Agent has exercised any
remedy hereunder and (ii) the date on which all of the
Borrower's Inventory has been sold or otherwise disposed of and
its Receivables collected (or deemed uncollectible) and the
proceeds thereof have been applied to, but have not satisfied in
full, the Obligations. Notwithstanding anything contained in
this Agreement to the contrary, to the extent any of the assets
of the Guarantors are used to satisfy any of the Obligations,
once the Obligations are paid in full and the Commitments have
been terminated, such Guarantors shall be subrogated to all
Liens and claims of the Administrative Agent provided hereunder
to the extent such assets of the Guarantors were applied to
satisfy the Obligations and the Guarantors shall not exercise or
move to enforce such subrogation rights until the Obligations
are paid in full and the Commitments have been terminated.
SECTION 2.14.APPLICATION OF PAYMENTS.
(a) All amounts received in the BBNA Concentration
Account from any source, including the Blocked Account Banks
shall be credited to the Loan Account (effective as of the
Business Day as of which the Administrative Agent determines in
good faith that it has received, prior to 2:00p.m., Boston time,
immediately available funds therefor) and such credits shall be
applied in the following order: FIRST, to pay interest due and
payable on Credit Extensions and to pay Fees and expense
reimbursements and indemnification then due and payable to the
Administrative Agent, BSI, the Issuing Bank, the Agent, the
Co-Agents and the Lenders; SECOND, to repay outstanding Agent
Advances; THIRD, to repay outstanding Loans that are ABR Loans
and all outstanding reimbursement obligations for Letters of
Credit; FOURTH, to repay outstanding Loans that are Eurodollar
Loans and all LIBOR breakage losses due in respect of such
repayment pursuant to Section 2.11(b) or, at the Borrower's
option (if no Default or Event of Default has occurred and is
then continuing), to fund a cash collateral deposit to the Cash
Collateral Account sufficient to pay, and with direction to pay,
all such outstanding Eurodollar Loans on the last day of the
then-pending Interest Period therefor; FIFTH, if any Default or
Event of Default has occurred and is continuing, to fund a cash
collateral deposit in the Cash Collateral Account in an amount
equal to 105% of the aggregate maximum amount that then is or at
any time may become available for drawing or payment under all
outstanding Letters of Credit; PROVIDED, HOWEVER, that if such
Default or Event of Default shall be cured, corrected or waived
pursuant to the terms hereof, such cash collateral shall be
released and applied pursuant to clause SIXTH below or pursuant
to Section 2.14(b), as the case may be; and SIXTH, to pay all
other Obligations that are then outstanding and payable.
(b) Any amounts received in the BBNA Concentration
Account at any time when all of the applications set forth in
Section 2.14(a) have been and remain fully funded shall be
remitted to the Borrower, if and as the Borrower may request.
(c) If any item deposited to the BBNA Concentration
Account and credited to the Loan Account is dishonored or
returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent shall have the
right to reverse such credit and charge the amount of such item
to the Loan Account and the Borrower shall indemnify the
Administrative Agent, the Agent, the Issuing Bank, the Co-Agents
and the Lenders against all claims and losses resulting from
such dishonor or return.
SECTION 2.15. INCREASED COSTS.
(a) Notwithstanding any other provision herein, if
after the date of this Agreement any change in applicable law or
regulation or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law)
shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan or ABR Loan
made by such Lender or any fees or other amounts payable
hereunder (other than changes in respect of Taxes, Other Taxes
and taxes imposed on, or measured by, the net income or overall
gross receipts or franchise taxes of such Lender by the
jurisdiction in which such Lender has its principal office or by
any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender (except any
such reserve requirement which is reflected in the Adjusted
LIBOR Rate) or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement or
the Eurodollar Loans made by such Lender, and the result of any
of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan or to reduce the
amount of any sum received or receivable by such Lender
hereunder or under the Notes (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material,
then the Borrower will pay to such Lender in accordance with
paragraph (c) below such additional amount or amounts as will
compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender shall have determined that the
applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and
Capital Standards", or the adoption or effectiveness after the
date hereof of any law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in
the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender (or any Lending office of such Lender)
or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on
such Lender's capital or on the capital of such ▇▇▇▇▇▇'s holding
company, if any, as a consequence of this Agreement, the Loans
made by such Lender pursuant hereto, such ▇▇▇▇▇▇'s Commitment
hereunder or the issuance of, or participation in, any Letter of
Credit by such Lender to a level below that which such Lender or
such Lender's holding company could have achieved but for such
adoption, change or compliance (taking into account such
▇▇▇▇▇▇'s policies and the policies of such ▇▇▇▇▇▇'s holding
company with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time the Borrower
shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such ▇▇▇▇▇▇'s holding company of
any such reduction suffered.
(c) A certificate of each Lender setting forth such
amount or amounts as shall be necessary to compensate such
Lender or its holding company as specified in paragraph (a) or
(b) above, as the case may be, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Lender the amount shown as due on any
such certificate delivered to it within 10 days after its
receipt of the same. Any Lender receiving any such payment
shall promptly make a refund thereof to the Borrower if the law,
regulation, guideline or change in circumstances giving rise to
such payment is subsequently deemed or held to be invalid or
inapplicable.
(d) Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with
respect to any period shall not constitute a waiver of such
Lender's right to demand compensation with respect to such
period or any other period. The protection of this Section 2.15
shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition which
shall have occurred or been imposed.
SECTION 2.16.CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if (x)any change in any
law or regulation or in the interpretation thereof by any
governmental authority charged with the administration thereof
shall make it unlawful for a Lender to make or maintain a
Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y)at
any time any Lender determines that the making or continuance of
any of its Eurodollar Loans has become impracticable as a result
of a contingency occurring after the date hereof which adversely
affects the London interbank market or the position of such
Lender in the London interbank market, then, by written notice
to the Borrower, such Lender may (i)declare that Eurodollar
Loans will not thereafter be made by such Lender hereunder,
whereupon any request by the Borrower for a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for an ABR
Loan unless such declaration shall be subsequently withdrawn;
and (ii)require that all outstanding Eurodollar Loans made by it
be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the
effective date of such notice as provided in paragraph (b)
below. In the event any Lender shall exercise its rights under
clause (i) or (ii) of this paragraph (a), all payments and
prepayments of principal which would otherwise have been applied
to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall
instead be applied to repay the ABR Loans made by such Lender in
lieu of, or resulting from the conversion of, such Eurodollar
Loans.
(b) For purposes of this Section 2.16, a notice to
the Borrower by any Lender pursuant to paragraph (a) above shall
be effective, if lawful, and if any Eurodollar Loans shall then
be outstanding, on the last day of the then-current Interest
Period; and otherwise such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.17.PAYMENTS; NO SETOFF. (a) All payments
received by the Administrative Agent, the Issuing Bank, the
Agent, the Co-Agents or any Lender for application to or on
account of any of the Obligations, whether received as a deposit
to the BBNA Concentration Account or as a payment made by the
Borrower or any Guarantor or from the enforcement of the claims
and Liens in the Cases or against any property of the Borrower
or any Guarantor shall be applied in the order of priority set
forth in Section 2.14(a) and shall be applied ratably to the
payment of all outstanding Obligations. All payments by the
Borrower or any Guarantor under this Agreement and under the
Notes shall be (i)net of any tax applicable to the Borrower or
Guarantor and (ii)made in Dollars in immediately available funds
at the office of the Administrative Agent by 2:00 p.m., Boston
time, on the date on which such payment shall be due. Interest
in respect of any Loan hereunder shall accrue from and including
the date of such Loan
to but excluding the date on which such Loan is paid in full or
converted to a Loan of a different Type.
(b) All payments by the Borrower hereunder to or for
the benefit of any Lender, the Issuing Bank, the Agent or the
Administrative Agent shall be made without setoff, counterclaim
or other defense.
SECTION 2.18.TAXES.
(a) Any and all payments by the Borrower or any
Guarantor hereunder and under the Notes shall be made free and
clear of and without deduction or withholding for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
EXCLUDING taxes imposed on or measured by the net income or
overall gross receipts (if the overall gross receipts are used
in lieu of net income of the Administrative Agent, the Agent or
any Lender (or any transferee or assignee thereof, including a
participation holder (any such entity being called a
"TRANSFEREE")) and franchise taxes imposed on the Administrative
Agent, the Agent or any Lender (or Transferee), in each instance
if and to the extent imposed by the jurisdiction under the laws
of which the Administrative Agent, the Agent or any such Lender
(or Transferee) is organized or any political subdivision
thereof or by any other jurisdiction or by any political
subdivision or taxing authority therein other than a
jurisdiction in which the Administrative Agent, the Agent or
such Lender would not be subject to tax but for the execution
and performance of this Agreement and (ii)taxes, levies,
imposts, deductions, charges or withholdings ("AMOUNTS") with
respect to payments hereunder or under the Notes to a Lender (or
Transferee) in accordance with laws in effect on the later of
the date of this Agreement and the date such Lender (or
Transferee) becomes a Lender (or Transferee, as the case may
be), but not excluding, with respect to such Lender (or
Transferee), any increase in such Amounts solely as a result of
any change in such laws occurring after such later date or any
Amounts that would not have been imposed but for actions (other
than actions contemplated by this Agreement or the Notes) taken
by the Borrower after such later date (all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the
Borrower or any Guarantor shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable
hereunder to the Lenders (or any Transferee), the Agent or the
Administrative Agent, (i)the sum payable shall be increased by
the amount necessary so that after making all required
deductions or withholding (including deductions or withholding
applicable to additional sums payable under this Section 2.18)
such Lender (or Transferee), the Agent or the Administrative
Agent (as the case may be) shall receive an amount equal to the
sum it would have received had no such deductions or withholding
been made, (ii)the Borrower shall make such deductions or
withholding and (iii)the Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay to the
relevant Governmental Authority in accordance with applicable
laws any current or future stamp or documentary taxes or any
other excise or property taxes, charges, assessments or similar
levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document
(hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender (or
Transferee), the Agent and the Administrative Agent for the full
amount of Taxes and Other Taxes paid by such Lender (or
Transferee), the Agent or the Administrative Agent, as the case
may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted
by the relevant taxing authority or other Governmental
Authority. A certificate as to the amount of such payment or
liability prepared by a Lender (or Transferee), the Agent or the
Administrative Agent, as applicable, absent manifest error,
shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date any
Lender (or Transferee), the Agent or the Administrative Agent,
as the case may be, makes written demand therefor. If any
Lender (or Transferee), the Agent or the Administrative Agent
receives a refund in respect of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower pursuant to this
Section 2.18, it shall within 30 days after receipt of such
refund, repay such refund to the Borrower (to the extent of
amounts that have been paid by the Borrower under this Section
2.18 with respect to the Taxes or Other Taxes that give rise to
such refund, net of all out-of-pocket expenses of such Lender
(or Transferee), Agent or Administrative Agent and with any
interest thereon that is received by the Lender (or Transferee),
the Agent or the Administrative Agent as part of the refund;
PROVIDED that the Borrower, upon the request of such Lender (or
Transferee), the Agent or the Administrative Agent agrees to
return such refund (plus penalties, interest or other charges)
to such Lender (or Transferee), the Agent or the Administrative
Agent in the event such Lender (or Transferee), the Agent or the
Administrative Agent is required to repay such refund and such
additions thereto to the relevant Governmental Authority.
Nothing contained in this Section 2.18 shall require any Lender
(or Transferee), the Agent or the Administrative Agent to make
available any of its tax returns (or any other information
relating to its taxes that it deems to be confidential).
(d) Within 30 days after the date of any payment of
Taxes or Other Taxes by the Borrower to the relevant
Governmental Authority, the Borrower will furnish to the
Administrative Agent, at its address referred to on the
signature pages hereof, the original or a certified copy of a
receipt issued by the Governmental Authority evidencing payment
thereof.
(e) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.18 shall survive the payment in full
of the principal of and interest on all Loans made hereunder.
(f) Each Lender (or Transferee) that is organized
under the laws of a jurisdiction other than the United States,
any State thereof or the District of Columbia (a "NON-U.S.
LENDER") shall, if legally able to do so, deliver to the
Borrower such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant
thereto, including without limitation (A)in the case of a
Non-U.S. Lender claiming exemption from United States Federal
withholding tax under Code Section 871(h) or 881(c) with respect
to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto, together with
a certificate representing that such Non-U.S. Lender is not a
bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within
the meaning of Section 864(d)(4) of the Code) or (B) Internal
Revenue Service Form 4224 or any subsequent version thereof or
successor thereto, establishing that such payment is not subject
to United States Federal withholding tax under the Code because
such payment is effectively connected with the conduct by such
Lender (or Transferee) of a trade or business in the United
States or (C)Internal Revenue Service Form 1001 or any
subsequent version thereof or successor thereto, establishing
that such payment is totally exempt from United States Federal
withholding tax or subject to a reduced rate of such tax under a
provision of an applicable tax treaty. Unless the Borrower and
the Administrative Agent have received forms or other documents
satisfactory to them indicating that such payments hereunder or
under the Notes are not subject to United States Federal
withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable
statutory rate. Such forms and certifications shall be
delivered by each Non-U.S. Lender claiming an exemption from or
reduction in applicable United States Federal withholding tax
(i) on or before the date it becomes a party to this Agreement
or, in the case of a Transferee, on or before the date it
becomes a Transferee, and (ii) promptly upon the obsolescence or
invalidity of any form so delivered by such Non-U.S. Lender.
(g) The Borrower shall not be required to pay any
additional amounts to any Lender (or Transferee) in respect of
United States Federal withholding tax pursuant to Section
2.18(a) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Lender (or Transferee)
to comply with the provisions of Section 2.18(f).
(h) Any Lender (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.18 shall
use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by
the Borrower or to change the jurisdiction of its applicable
lending office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole
reasonable determination of such Lender or Transferee, be
otherwise materially disadvantageous to such Lender (or
Transferee).
SECTION 2.19.CERTAIN FEES. The Borrower shall pay to the
Administrative Agent, for the account of the Administrative
Agent, the fees set forth in the Fee Letter as and when payment
of such fees is due as therein set forth.
SECTION 2.20.UNUSED COMMITMENT FEE. The Borrower shall pay
to the Administrative Agent for the account of the Lenders,
based upon their pro rata share of the Credit Extensions, a
--- ----
commitment fee (the "COMMITMENT FEE") computed by applying 0.30%
per annum (on the basis of actual days elapsed in a year of 360
days) to the average daily balance of the Unused Commitment for
each day commencing on and including the Closing Date and ending
on but excluding the Termination Date. Except as otherwise
provided herein, the Commitment Fee so accrued in any calendar
month shall be payable on the first Business Day of the
immediately succeeding calendar month, except that all
Commitment Fees so accrued as of the Termination Date shall be
payable on the Termination Date.
SECTION 2.21.LETTER OF CREDIT FEES. The Borrower shall pay
to the Administrative Agent for the account of the Lenders a
letter of credit fee (the "LETTER OF CREDIT FEE") computed by
applying 1.50% per annum (on the basis of actual days elapsed in
a year of 360 days) to the average daily balance of the maximum
amount that at any time is available for drawing or payment
under any and all outstanding Letters of Credit. The Letter of
Credit Fee so accrued in any calendar month shall be payable on
the first Business Day of the immediately succeeding calendar
month, except that all Letter of Credit Fees so accrued as of
the Termination Date shall be payable on the Termination Date.
SECTION 2.22.NATURE OF FEES. All Fees shall be paid on the
dates due, in immediately available funds, to the Administrative
Agent for the respective accounts of the Administrative Agent,
the Issuing Bank, the Agent and the Lenders, as provided herein
and in the Fee Letter. Once paid, all fees shall be
fully-earned and shall not be refundable under any circumstances.
SECTION 2.23.PRIORITY AND LIENS. The Borrower and each of
the Guarantors hereby covenants, represents and warrants that,
upon entry of the Order:
(a) Pursuant to Section 364(c)(1) of the
Bankruptcy Code, the Obligations of the Borrower and the
Guarantors hereunder and under the Loan Documents shall at all
times constitute allowed administrative expense claims having
priority over all administrative expenses of the kind specified
in Sections 503(b), 507(b), 364(c) of the Bankruptcy Code in the
Cases and any future Chapter 7 Case; and
(b) Pursuant to Section 364(c)(2) of the
Bankruptcy Code, the Obligations of the Borrower and the
Guarantors hereunder and under the Loan Documents shall at all
times be secured by a first priority Lien in all cash and cash
equivalents maintained in the Cash Collateral Account and any
direct investments of the funds contained therein; subject only
in the event of the occurrence and during the continuance of an
Event of Default, to the payment of (x)allowed and unpaid fees
and disbursements and any future fees and disbursements incurred
after the Event of Default by the professionals retained in the
Cases pursuant to Section 327 of the Bankruptcy Code, any
statutory committee appointed in the Cases and any trustee or
examiner appointed or elected in the Cases (including, without
limitation, in a superseding chapter 7 case) in an amount not in
excess of $5,000,000 in the aggregate and (y)fees pursuant to 28
U.S.C. Section 1930 ((x) and (y) collectively, the "CARVE-OUT"),
PROVIDED that following the Termination Date, the cash and cash
equivalents in the Cash Collateral Account and any direct
investments of the funds contained therein shall not be subject
to the Carve-Out.
Notwithstanding the foregoing, so long as a Default or
Event of Default shall not have occurred, (i)the Borrower and
the Guarantors shall be permitted to pay compensation and
reimbursement of expenses allowed and payable under Sections 330
and 331 of the Bankruptcy Code, as the same may be due and
payable, and (ii)such payments shall not be applied against the
Carve-Out. The foregoing shall not be construed as a consent to
the allowance of any fees and expenses and shall not affect the
rights of the Lenders to object to the allowance and payment of
any such amounts.
No Loans, including the Carve-Out, shall apply to or
be available for any fees or expenses incurred by the Borrower
or the Guarantors in connection with the initiation or
prosecution of any claims, causes of action, adversary
proceeding or other litigation against the Lenders, the Issuing
Bank, the Agent, the Co-Agents or the Administrative Agent for
the purpose of challenging the amount, validity, priority or
enforceability of, or asserting any defense, counterclaim or
offset to, the Obligations or the security interests and liens
of the Lenders, the Issuing Bank, the Agent, the Co-Agents or
the Administrative Agent.
SECTION 2.24.RIGHT OF SET-OFF.
(a) Subject to the provisions of Sections 7.01 and
2.13(h) and regardless of the adequacy of collateral, upon the
occurrence and during the continuance of any Event of Default,
the Administrative Agent, the Issuing Bank, the Agent, each
Co-Agent and each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law and
without further order of or application to the Bankruptcy Court,
to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Administrative Agent, the
Issuing Bank, the Agent, each such Co-Agent and each such Lender
to or for the credit or the account of the Borrower or any
Guarantor against any and all of the obligations of such
Borrower or Guarantor now or hereafter existing under the Loan
Documents, irrespective of whether or not such Lender shall have
made any demand under any Loan Document and although such
obligations may be unmatured. The rights of each Lender, the
Issuing Bank, the Agent, the Co-Agents and the Administrative
Agent under this Section are in addition to other rights and
remedies which such Lender, the Issuing Bank, the Agent, the
Co-Agents and the Administrative Agent may have upon the
occurrence and during the continuance of any Event of Default.
(b) The provisions of Section 2.24(a) shall not
qualify or limit the provisions of Sections 2.13 and 2.14.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇ INTEREST IN CASH COLLATERAL ACCOUNT.
Pursuant to Section 364(c)(2) of the Bankruptcy Code, the
Borrower and the Guarantors hereby assign and pledge to the
Administrative Agent, for its benefit and for the benefit of the
Issuing Bank, the Agent, the Co-Agents and the Lenders, and
hereby grant to the Administrative Agent, for its benefit and
for the benefit of the Issuing Bank, the Agent, the Co-Agents
and the Lenders, a first priority security interest, senior to
all other Liens, if any, in all of the Borrower's and the
Guarantors' right, title and interest in and to the Cash
Collateral Account and the Permitted Investments and other cash
equivalents of every type and description (other than the Escrow
Proceeds) and any direct investment of the funds contained in
such Cash Collateral Account. The Administrative Agent shall
have sole dominion and control over the Cash Collateral Account.
SECTION 2.26.PAYMENT OF OBLIGATIONS. Upon the maturity
(whether by acceleration or otherwise) of any Loans, Letter of
Credit reimbursement obligations or any other Obligations, the
Lenders shall be entitled to immediate payment of such Loans,
reimbursement obligations, liabilities and other Obligations,
without further application to or order of the Bankruptcy Court.
SECTION ▇.▇▇.▇▇ DISCHARGE; SURVIVAL OF CLAIMS. Each of the
Borrower and the Guarantors agrees that (i)its obligations under
this Agreement and under the Notes, including its liability for
the Obligations, shall not be discharged by the entry of an
order confirming a Plan of Reorganization (and each of the
Borrower and the Guarantors pursuant to Section 1141(d)(4) of
the Bankruptcy Code hereby waives any such discharge) and
(ii)the Superpriority Claim granted to the Administrative Agent,
the Issuing Bank, the Agent and the Lenders pursuant to the
Order and described in Section 2.23 and the Lien granted to the
Administrative Agent, the Issuing Bank, the Agent and the
Lenders pursuant to the Order and described in Section 2.23
shall not be affected in any manner by the entry of an order
confirming a Plan of Reorganization.
III. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and
participate in Letters of Credit and the Issuing Bank to issue
Letters of Credit, the Borrower and each of the Guarantors
jointly and severally represent and warrant as follows:
SECTION 3.01.ORGANIZATION AND AUTHORITY. Each of the
Borrower and the Guarantors (i) is a corporation duly organized
and validly existing under the laws of the State of its
incorporation and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on the financial
condition, operations, business, properties or assets of the
Borrower and the Guarantors taken as a whole; (ii) has the
requisite corporate power and authority to effect the
transactions contemplated hereby, and by the other Loan
Documents, and (iii) has all requisite corporate power and
authority and the legal right to own, pledge, mortgage and
operate its properties, and to conduct its business as now or
currently proposed to be conducted. Schedule 3.01 lists all
jurisdictions in which the Borrower and the Guarantors are
qualified to do business as of the Closing Date.
SECTION 3.02.DUE EXECUTION. The execution, delivery and
performance by each of the Borrower and the Guarantors of each
of the Loan Documents to which it is a party (i) are within the
respective corporate powers of each of the Borrower and the
Guarantors, have been duly authorized by all necessary corporate
action, including the consent of shareholders where required,
and do not (A) contravene the charter or by-laws of any of the
Borrower or the Guarantors, (B) violate any law (including,
without limitation, the Securities Exchange Act of 1934) or
regulation (including, without limitation, Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System),
or any order or decree of any court or governmental
instrumentality, (C) conflict with or result in a breach of, or
constitute a default under, any material indenture, mortgage or
deed of trust entered into after the Filing Date or any material
lease, agreement or other instrument entered into after the
Filing Date binding on the Borrower or the Guarantors or any of
their properties, or (D) result in or require the creation or
imposition of any Lien upon any of the property of any of the
Borrower or the Guarantors, other than the Liens granted
pursuant to this Agreement; and do not require the consent,
authorization by or approval of or notice to or filing or
registration with any Governmental Authority other than the
entry of the Order. This Agreement has been duly executed and
delivered by each of the Borrower and the Guarantors. This
Agreement is, and each of the other Loan Documents to which the
Borrower and each of the Guarantors is or will be a party, when
delivered hereunder or thereunder, will be, a legal, valid and
binding obligation of the Borrower and each Guarantor, as the
case may be, enforceable against the Borrower and the
Guarantors, as the case may be, in accordance with its terms.
SECTION 3.03.STATEMENTS MADE. The statements, written or
oral, which have been made by the Borrower or any of the
Guarantors to the Administrative Agent or to the Bankruptcy
Court in connection with any Loan Document, and any financial
statement delivered pursuant hereto or thereto (other than to
the extent that any such statements constitute projections),
taken as a whole and in light of the circumstances in which
made, contain no untrue statement of a material fact and do not
omit to state a material fact necessary to make such statements
not misleading; and, to the extent that any such written
statements constitute projections, such projections were
prepared in good faith on the basis of assumptions, methods,
data, tests and information believed by the Borrower or such
Guarantor to be valid and accurate at the time such projections
were furnished to the Lenders.
SECTION 3.04.OWNERSHIP. BAC is a wholly-owned Subsidiary
of BI. The Borrower is a wholly-owned Subsidiary of BAC. Each
of the Guarantors listed on Schedule 3.04 (other than BI and
BAC) is a wholly-owned Subsidiary of the Borrower, and the
Borrower owns no other Subsidiaries, whether directly or
indirectly, other than the Guarantors (other than BI and BAC).
No Subsidiary of the Borrower, BI or BAC exists which (i) has
not commenced a Case and (ii) is not a Guarantor (other than the
Borrower). The estate in the Cases commenced by the Borrower
and each Guarantor owns good title to all property of the
Borrower or such Guarantor that is identified as owned by it on
financial statements most recently delivered by it to the
Administrative Agent.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ STATEMENTS. The Borrower has
furnished the Administrative Agent, the Issuing Bank, the Agent
and the Lenders with copies of (i) the audited consolidated
financial statement and schedules of BI for the fiscal year
ended February 1, 1997 and (ii) the unaudited consolidated
financial statement and schedules of BI for the fiscal quarter
ended November 2, 1997. Such financial statements present
fairly the financial condition and results of operations of BI,
the Borrower and the other Guarantors on a consolidated basis as
of such dates and for such periods; such balance sheets and the
notes thereto disclose all liabilities, direct or contingent, of
BI, the Borrower and the other Guarantors as of the dates
thereof required to be disclosed by GAAP and such financial
statements were prepared in a manner consistent with GAAP,
subject (in the case of such fiscal quarter statement) to normal
year end adjustments. No material adverse change in the
financial condition, operations, business, properties or assets
of the Borrower and the Guarantors, taken as a whole, has
occurred from that set forth in BI's consolidated financial
statements for the fiscal year ended February 1, 1997 or the
fiscal quarter ended November 2, 1997.
SECTION 3.06.LIENS. There are (a) no Liens of any nature
whatsoever on any Inventory or Receivables of the Borrower or
any Guarantor and (b) no Liens of any nature whatsoever on any
other property of the Borrower or any Guarantor or the estates
in any of the Cases, except, in the case of this clause (b), (i)
Liens existing on the Filing Date as described on Schedule
3.06A, (ii) Liens created or perfected after the Filing Date and
set forth on Schedule 3.06B, (iii) Permitted Liens, (iv) pledges
of the capital stock of the Borrower, BAC and the Borrower's
Subsidiaries, pledges of unsecured intercompany Indebtedness
owing by the Borrower to BAC and BI, and Liens on trademarks and
tradenames, all securing BI's pre-petition revolving credit
indebtedness and (v) Liens in favor of the Administrative Agent,
the Issuing Bank, the Agent, the Co-Agents and the Lenders.
Neither the Borrower nor the Guarantors are parties to any
contract, agreement, lease or instrument the performance of
which, either unconditionally or upon the happening of an event,
will result in or require the creation of a Lien on any property
of the Borrower or any Guarantor or any property of the estates
in any of the Cases or otherwise result in a violation of this
Agreement other than the Liens granted to the Administrative
Agent, the Issuing Bank, the Agent, the Co-Agents and the
Lenders as provided for in this Agreement.
SECTION 3.07.COMPLIANCE WITH LAW.
(a) The operations of the Borrower and each of the
Guarantors are not in violation of any applicable federal, state
or local environmental, health or safety statutes (including,
without limitation, the Occupational Health and Safety Act),
regulations, directions, ordinances, criteria or guidelines.
(b) Neither the Borrower nor any of the Guarantors
has received notice that any of the operations of the Borrower
or any of the Guarantors is the subject of any judicial or
administrative proceeding alleging the violation of any federal,
state or local environmental, health or safety statute,
regulation, direction, ordinance, criteria or guideline.
(c) None of the operations of the Borrower or any of
the Guarantors is the subject of any federal, state or local
investigation involving allegations or potential allegations
that the Borrower or any of the Guarantors disposed of any
hazardous or toxic waste, substance or constituent or other
pollutant, contaminant or substance (including, without
limitation, petroleum) at any site that may require remedial
action, or any federal, state or local investigation evaluating
whether any remedial action is needed to respond to a release or
threatened release of any hazardous or toxic waste, substance or
constituent, or other pollutant, contaminant or substance
(including, without limitation, petroleum) into the environment.
(d) Neither the Borrower nor any of the Guarantors has
filed any notice under any federal, state or local law
indicating past or present treatment, storage or disposal of a
hazardous waste or reporting a spill or release or threatened
release of a hazardous or toxic waste, substance or constituent,
or other pollutant, contaminant or substance (including, without
limitation, petroleum) into the environment.
(e) Neither the Borrower nor any of the Guarantors has
any contingent liability of which any of them has knowledge or
reasonably should have knowledge in connection with any release
or threatened release of any hazardous or toxic waste, substance
or constituent, or other pollutant, contaminant or substance
(including, without limitation, petroleum) into the environment,
nor has the Borrower or any of the Guarantors received any
notice, letter or other indication of potential liability
arising from the disposal of any hazardous or toxic waste,
substance or constituent or other pollutant, contaminant or
substance (including, without limitation, petroleum) into the
environment which, in any such case referred to in this Section
or in the aggregate, could have a material adverse effect on the
financial condition, operations, business, properties or assets
of the Borrower and the Guarantors taken as a whole.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇. All policies of insurance of any
kind or nature owned by or issued to the Borrower and the
Guarantors, including, without limitation, policies of life,
fire, theft, product liability, public liability, property
damage, other casualty, employee fidelity, workers'
compensation, employee health and welfare, title, property and
liability insurance, are in full force and effect and are of a
nature and provide such coverage as is sufficient and as is
customarily carried by companies of the size and character of
the Borrower and the Guarantors.
SECTION 3.09.THE ORDER. On the date of the making of the
initial Loans or the issuance of the initial Letters of Credit
hereunder, whichever first occurs, the Order will have been
entered and will not have been stayed, amended, vacated,
reversed or rescinded. On the date of the making of any Loan or
the issuance of any Letter of Credit, the Order will have been
entered and will not have been amended, stayed, vacated or
rescinded. Upon the maturity (whether by the acceleration or
otherwise) of any of the Obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents, the
Lenders shall, subject to the provisions of Section 7.01, be
entitled to immediate payment of such obligations, and to
enforce the remedies provided for hereunder, without further
application to or order by the Bankruptcy Court.
SECTION 3.10.USE OF PROCEEDS. The proceeds of the Loans
shall be used, first, to repay in full all loans, letter of
credit liabilities and other obligations outstanding under or in
respect of the Chase Credit Facility and thereafter may be used
to provide working capital for and to finance Inventory
purchases by the Borrower (as set forth herein and in the Order)
and otherwise for general corporate purposes and to make
Pre-Petition Claim Payments to the extent permitted by Section
6.01(b). The Borrower will not use the proceeds of any Loans or
any other property of the Borrower to make any intercompany or
Affiliate advances other than those intercompany or Affiliate
advances from the Borrower to its Subsidiaries, New Horizons of
▇▇▇▇▇▇▇▇, Inc., and New Horizons of Westbury,. Inc., acceptable
to the Administrative Agent to be used for real property
carrying costs of such Subsidiaries and not in excess of
$1,000,000 in the aggregate (it being understood that proceeds
of the Loans used for ordinary-course operating expenses of the
Bradlees stores located in Yonkers, New York, and North
Attleboro, Massachusetts (so long as such stores remain open)
shall be deemed to be a permitted use of proceeds hereunder).
SECTION ▇.▇▇.▇▇▇▇▇ LOCATIONS; BANK ACCOUNTS; INVENTORY.
(a) Set forth on Schedule 3.11(a) hereto is a
complete and accurate list of the names and addresses of all the
retail stores, warehouses and distribution centers operated by
the Borrower on the Closing Date, which are all locations where
any Inventory of the Borrower is maintained.
(b) Set forth on Schedule 3.11(b) hereto is a
complete and accurate list of all bank accounts, money market
accounts and other deposit or investment accounts for cash, cash
equivalents or investments maintained by the Borrower or any
Guarantor or in which the Borrower or any Guarantor has any
interest.
(c) No Guarantor owns any Inventory or operates any
retail stores, warehouses or distribution centers. No Guarantor
owns any other material assets other than as set forth on
Schedule 3.11(c) (which schedule also sets forth the Borrower's
good faith estimate of the book value of such assets).
(d) The assets of the Borrower (including, without
limitation, the Inventory and the Receivables) are substantially
in the amounts and of the quality previously represented to the
Administrative Agent in the most recent Borrowing Base
Certificate delivered to the Administrative Agent.
SECTION 3.12.LITIGATION. There are no actions, suits or
proceedings pending and unstayed or, to the knowledge of the
Borrower or the Guarantors, threatened against or affecting the
Borrower or the Guarantors or any of its properties, including
(without limitation) the Inventory, before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which is reasonably likely
to be determined adversely to the Borrower or the Guarantors
and, if so determined adversely to the Borrower or the
Guarantors would have a material adverse effect on the financial
condition, business, properties, operations or assets of the
Borrower and the Guarantors, taken as a whole.
SECTION 3.13.MATERIAL ADVERSE CHANGE. No event or series
of events have occurred since November 2, 1997 that has or have
materially and adversely affected (i) the assets, liabilities,
business, operations, condition (financial or otherwise) or
prospects of the Borrower or any Guarantor or (ii) the
enforceability of the Superpriority Claims, Liens, rights and
remedies of the Administrative Agent, the Issuing Bank, the
Agent, the Co-Agents and the Lenders under the Loan Documents,
or (iii) the ability of the Borrower or the Guarantors to pay
the Obligations when due and to perform their covenants and
agreements under the Loan Documents.
SECTION 3.14.PAYMENT OF TAXES AND POST-PETITION
OBLIGATIONS. Except as set forth on Schedule 3.14, the
Borrower and each Guarantor have paid when due all liabilities
for taxes accruing at any time after the Filing Date, all rents
reserved or accruing at any time after the Filing Date (except
rents accruing after the effective date approved by the
Bankruptcy Court for rejection of an unexpired lease) under any
unexpired lease to which the Borrower or any Guarantor is party
as lessee, all liabilities arising after the Filing Date under
any executory contract to which the Borrower or any Guarantor is
a party, all professional fees and expenses relating to the
Cases, and all other liabilities incurred by the Borrower or any
Guarantor or the estate in any of the Cases at any time after
the Filing Date.
SECTION 3.15. TAXES AND TAX RETURNS. Except as set forth
on Schedule 3.15, the Borrower and each Guarantor have filed or
caused to be filed all material tax returns which are required
to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of
its property and all other material taxes, fees or other charges
imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or the
Guarantor, as the case may be).
SECTION 3.16. FRANCHISES, LICENSES, PERMITS, LEASES,
PATENTS, COPYRIGHTS, TRADEMARKS, AND TRADE NAMES. The Borrower
and each of the Guarantors have obtained and hold in full force
and effect, all franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights
of way and other rights and approvals which are necessary or
advisable for the operation of its businesses as presently
conducted and as proposed to be conducted. Neither the Borrower
nor any of the Guarantors is in violation of the terms of any
such franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or
approval. The Borrower possesses or has the legal right to use
such assets, licenses, patents, patent applications, copyrights,
service marks, trademarks and trade names as are necessary or
advisable to continue to conduct its present and proposed
business activities and such assets, licenses, patents, patent
applications, copyrights, service marks, trademarks and trade
names are valid and in full force and effect.
SECTION 3.17. LABOR MATTERS.
(a) There are no controversies pending or, to the
best of the Borrower's knowledge after diligent inquiry,
threatened between the Borrower or any of the Guarantors, on the
one hand, and any of their respective employees, on the other
hand, which could have a material adverse effect on the
financial condition, operations, business, properties or assets
of the Borrower and the Guarantors taken as a whole.
(b) Neither the Borrower nor any of the Guarantors is
engaged in any unfair labor practice. There is (i)no unfair
labor practice complaint pending against the Borrower or any of
the Guarantors or, to the best knowledge of the Borrower,
threatened against any of them, before the National Labor
Relations Board, and no grievance or significant arbitration
proceeding arising out of or under collective bargaining
agreements is so pending against the Borrower or any of the
Guarantors or, to the best knowledge of the Borrower, threatened
against any of them, (ii)no strike, labor dispute, slowdown or
stoppage pending against either of the Borrower or any of the
Guarantors or, to the best knowledge of the Borrower, threatened
against any of them and (iii)no union representation question
with respect to the employees of the Borrower or any Guarantors
and no union organizing activities.
SECTION 3.18.ERISA. None of the Borrower, any Guarantor or
any ERISA Affiliate maintains or contributes to any Plan other
than those listed on Schedule3.18. Each Plan has been and is
being maintained and funded in accordance with its terms and in
compliance with all provisions of ERISA and the Code applicable
thereto. The Borrower, each of the Guarantors and each ERISA
Affiliate have fulfilled all obligations related to the minimum
funding standards of ERISA and the Code for each Plan, are in
compliance with the currently applicable provisions of ERISA and
of the Code and have not incurred any liability (other than
routine liability for premiums) under Title IV of ERISA. No
Termination Event has occurred nor has any other event occurred
that may result in a Termination Event. No event or events have
occurred in connection with which the Borrower, any of the
Subsidiaries, any ERISA Affiliate, any fiduciary of a Plan or
any Plan, directly or indirectly, could be subject to any
liability, individually or in the aggregate, under ERISA, the
Code or any other requirement of law or under any agreement,
instrument, statute, rule of law or regulation pursuant to or
under which any such entity has agreed to indemnify or is
required to indemnify any person against liability incurred
under, or for a violation or failure to satisfy the requirements
of, any such statute, regulation or order. The Borrower has
delivered or caused to be delivered to the Administrative Agent:
(i)a copy of each Plan (or, where any such plan is not in
writing, a complete description thereof) (and, if applicable,
related trust agreements or other funding instruments) and all
amendments thereto, all written interpretations thereof and
written descriptions thereof that have been distributed to
employees or former employees of the Borrower or the Guarantors;
(ii)the most recent determination letter issued by the Internal
Revenue Service with respect to each Plan; (iii)for the three
most recent plan years, Annual Reports on Form 5500 Series
required to be filed with any governmental agency for each Plan;
(iv)all actuarial reports prepared for the last three plan years
for each Plan; (v)a listing of all Multiemployer Plans, with the
aggregate amount of the most recent annual contributions
required to be made by the Borrower or any ERISA Affiliate to
each such plan and copies of the collective bargaining
agreements requiring such contributions; (vi)any information
that has been provided to the Borrower or any ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan; and
(vii)the aggregate amount of the most recent annual payments
made to former employees of the Borrower or any ERISA Affiliate
under any retiree health Plan.
SECTION 3.19.ACCOUNTS RECEIVABLE FINANCING. Neither the
Borrower nor any of the Guarantors is party to any accounts
receivable financing arrangements whereby sales of Inventory are
conducted through the use of an in-store credit card or through
the use of a credit card offered by a third party lender (it
being understood that the acceptance by the Borrower of credit
cards issued by Visa, Mastercard or similar processors that does
not entail an extension of credit by the Borrower to its own
customers (and is non-recourse to the Borrower (other than, with
respect to accounts financed under the Purchase and Service
Agreement, to the limited extent set forth therein)) shall not
be deemed to constitute such an accounts receivable financing
arrangement, even if the Borrower's name or imprint appears on
such Visa, Mastercard or similar credit cards).
IV. CONDITIONS OF LENDING
SECTION 4.01.CONDITIONS PRECEDENT TO INITIAL LOANS AND
INITIAL LETTERS OF CREDIT. The obligation of the Lenders to
make the initial Loans or the Issuing Bank to issue the initial
Letter of Credit, whichever may occur first, is subject to the
following conditions precedent:
(a) SUPPORTING DOCUMENTS. The Administrative Agent
shall have received for each of the Borrower and the Guarantors:
(i) a copy of such entity's certificate of
incorporation, as amended, certified as of a recent date by the
Secretary of State of the state of its incorporation or a senior
officer of such entity;
(ii) a certificate of such Secretary of State,
dated as of a recent date, as to the good standing of that
entity and as to the charter documents on file in the office of
such Secretary of State; and
(iii) a certificate of the Secretary or an
Assistant Secretary of that entity dated the date of the initial
Loans or the initial Letter of Credit hereunder, whichever first
occurs, and certifying (A)that attached thereto is a true and
complete copy of the by-laws of that entity as in effect on the
date of such certification, (B)that attached thereto is a true
and complete copy of resolutions adopted by the Board of
Directors of that entity authorizing the Borrowings and Letter
of Credit extensions hereunder, the execution, delivery and
performance in accordance with their respective terms of this
Agreement, the Notes to be executed by it, the Loan Documents
and any other documents required or contemplated hereunder or
thereunder and the granting of the security interest in the Cash
Collateral Account contemplated hereby, (C)that the certificate
of incorporation of that entity has not been amended since the
date of the last amendment thereto indicated on the certificate
of the Secretary of State furnished pursuant to clause (i) above
and (D)as to the incumbency and specimen signature of each
officer of that entity executing this Agreement, the Notes to be
executed by it and the Loan Documents or any other document
delivered by it in connection herewith or therewith (such
certificate to contain a certification by another officer of
that entity as to the incumbency and signature of the officer
signing the certificate referred to in this clause (iii)).
(b) NOTES. On or before the date of the initial
Loans or the issuance of the initial Letter of Credit hereunder,
whichever first occurs, the Administrative Agent shall have
received Notes executed on behalf of the Borrower, dated the
Closing Date, payable to the order of each of the Lenders, in
the form of Exhibit B-1, in an amount equal to such ▇▇▇▇▇▇'s
Commitment and in the form of ExhibitB-2 in an amount equal to
$15,000,000 to be delivered to the Administrative Agent for the
Agent Advances.
(c) THE ORDER. At the time of the making of the
initial Loans or at the time of the issuance of the initial
Letter of Credit, whichever first occurs, the Administrative
Agent, the Issuing Bank, the Agent and the Lenders shall have
received a certified copy of an order of the Bankruptcy Court in
the form attached hereto as Exhibit C (the "ORDER") approving
the Loan Documents and granting the Superpriority Claim status
and Liens described in Section 2.23 which (i)shall have been
entered upon an application of the Borrower satisfactory in form
and substance to the Administrative Agent, on no less than
fifteen (15) days' prior notice to those parties directed by the
Bankruptcy Court, (ii)shall be in full force and effect, and
(iii)shall not have been stayed, reversed, modified or amended
in any respect and, if the Order is the subject of a pending
appeal in any respect, neither the making of such Loans nor the
issuance of such Letter of Credit nor the performance by the
Borrower or any of the Guarantors of any of their respective
obligations hereunder or under the Loan Documents or under any
other instrument or agreement referred to herein shall be the
subject of a presently effective stay pending appeal.
(d) BUSINESS PLAN. The Borrower shall have delivered
to the Administrative Agent the Business Plan in form and
substance satisfactory to the Administrative Agent.
(e) OPINIONS OF COUNSEL TO THE BORROWER. The
Administrative Agent, the Issuing Bank, the Agent, the Co-Agents
and the Lenders shall have received the favorable written
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, counsel to the Borrower and the
Guarantors, and of such other counsel as is acceptable to the
Administrative Agent, in each case dated the date of the initial
Loans or the issuance of the initial Letter of Credit, whichever
first occurs, substantially in the forms attached as ExhibitD.
(f) PAYMENT OF FEES. Concurrent with the initial
Borrowing, the Borrower shall have paid to the Administrative
Agent, the Issuing Bank, the Agent and the Lenders the then
unpaid balance of all accrued and unpaid Fees owed under and
pursuant to this Agreement and the Fee Letter referred to in
Section 2.19.
(g) ASSETS; INVENTORY. The Administrative Agent
shall be satisfied that the assets of the Borrower and the
Guarantors are in the amounts and of the quality previously
represented by the Borrower to the Administrative Agent and the
Administrative Agent shall have received such valuations, credit
and background checks and other reports, material and
information concerning such assets as shall reasonably satisfy
the Administrative Agent in its sole and absolute discretion.
In addition, the Administrative Agent shall be reasonably
satisfied that the Inventory of the Borrower is located at such
places and is in the amounts and of the quality and value
previously represented by the Borrower to the Administrative
Agent, and the Administrative Agent shall have received such
reports, material and other information concerning the Inventory
and the Borrower's suppliers, as shall reasonably satisfy the
Administrative Agent in its sole and absolute discretion.
(h) CORPORATE AND JUDICIAL PROCEEDINGS. All
corporate and judicial proceedings and all instruments and
agreements in connection with the transactions among the
Borrower, the Guarantors, the Administrative Agent, the Issuing
Bank, the Agent, the Co-Agents and the Lenders contemplated by
this Agreement shall be reasonably satisfactory in form and
substance to the Administrative Agent, and the Administrative
Agent shall have received all information and copies of all
documents and papers, including records of corporate and
judicial proceedings, which the Administrative Agent may have
reasonably requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate,
governmental or judicial authorities.
(i) INFORMATION; SATISFACTORY DILIGENCE. In addition
to the foregoing, the Administrative Agent shall have (a)
received such other information (financial or otherwise) as may
be reasonably requested by the Administrative Agent, and (b)
completed its diligence to its satisfaction, as determined by
the Administrative Agent in its sole and absolute discretion,
including satisfactory results of an inventory analysis
conducted by an inventory liquidation analysis firm and a
follow-up review of the Borrower's books and records conducted
by a commercial finance audit firm.
(j) LIEN SEARCHES. On or before the date of the
entry of the Order, the Administrative Agent shall have received
the results of UCC-1 and other Lien searches conducted in State
and county levels in jurisdictions in which the Borrower and the
Guarantors conduct business and in the United States Patent and
Trademark Office, which searches shall reflect the absence of
Liens on the assets (including Inventory and Receivables) of the
Borrower and the Guarantors, other than Liens that are
satisfactory to the Required Lenders (in each case dated as of a
date reasonably satisfactory to the Administrative Agent) or are
otherwise permitted pursuant to this Agreement, or for which
termination statements and releases reasonably satisfactory to
the Administrative Agent have been tendered prior to or
concurrently with the initial Credit Extension.
(k) ENVIRONMENTAL COMPLIANCE. The Borrower and the
Guarantors shall have granted the Administrative Agent access to
and the right to inspect all reports, audits and other internal
information of the Borrower and the Guarantors relating to
environmental matters, and any third party verification of
certain matters relating to compliance with environmental laws
and regulations requested by the Administrative Agent, and the
Administrative Agent shall be satisfied that the Borrower and
the Guarantors are in compliance in all material respects with
all applicable environmental laws and regulations and be
satisfied with the costs of maintaining such compliance.
(l) ACCOUNTS RECEIVABLE FINANCING. Neither the
Borrower nor any of the Guarantors shall be party to any
accounts receivable financing arrangements whereby sales of
Inventory are conducted through the use of an in-store credit
card or through the use of a credit card offered by a third
party lender (it being understood that the acceptance by the
Borrower of credit cards issued by Visa, Mastercard or similar
processors that does not entail an extension of credit by the
Borrower to its own customers (and is non-recourse to the
Borrower (other than, with respect to accounts financed under
the Purchase and Service Agreement, to the limited extent set
forth therein)) shall not be deemed to constitute such an
accounts receivable financing arrangement, even if the
Borrower's name or imprint appears on such Visa, Mastercard or
similar credit cards).
(m) CASH MANAGEMENT SYSTEM. The cash management
system required to be established as of the date hereof pursuant
to Sections 2.13 and 2.14 shall be substantially implemented in
all material respects, as determined by the Administrative Agent
in its sole and absolute discretion.
(n) PAYOUT OF CHASE CREDIT FACILITY. The
Administrative Agent shall have received (i)a letter from Chase
in form and substance satisfactory to the Administrative Agent,
duly completed so as to set forth the amount (the "PAYOFF
AMOUNT") which, if paid to Chase on the Closing Date, shall
discharge all claims against the Borrower and Guarantors and all
Liens securing any Indebtedness or other obligations outstanding
under the Chase Credit Facility (other than letters of credit
issued under the Chase Credit Facility that have been fully
collateralized or backed by Letters of Credit hereunder and
except that Chase may reserve claims for unliquidated and
contingent indemnification obligations if such claims are
unsecured and expressly subordinated by Chase, in right of
payment, to the prior payment in full of all of the
Obligations), (ii)the Borrower's request for a Borrowing in an
amount which both (x)is permitted under Section 2.01(a), and
(y)is at least equal to the Payoff Amount, and (iii)the
Borrower's and Guarantors' express instructions to remit to
Chase, from the proceeds of such Borrowing, the Payoff Amount.
(o) CONSENTS AND APPROVALS. The Administrative Agent
shall be satisfied in its sole discretion that all insurance,
Blocked Account Agreements, Payment Direction Agreements and
other consents and approvals required or necessary hereunder
have been received and are in full force and effect.
(p) OPENING AVAILABILITY. After giving effect to
retirement and discharge of the Chase Credit Facility, both the
Borrowing Base and the aggregate amount of the Commitments shall
be at least $50,000,000 greater than the aggregate Credit
Extensions that would be outstanding after giving effect to all
Loans and Letters of Credit that are then being made, issued or
entered into or that have then been requested by the Borrower.
(q) NO MATERIAL ADVERSE CHANGE. No event or series
of events shall have occurred at any time after November 2,
1997, which the Required Lenders in good faith determine to
constitute a material adverse change in (i)the assets,
liabilities, business, operations, condition (financial or
otherwise) or prospects of the Borrower or any Guarantor, or
(ii)the enforceability of the Superpriority Claims, Liens,
rights and remedies of the Administrative Agent, the Issuing
Bank, the Agent, the Co-Agents and the Lenders under the Loan
Documents, (iii)the ability of the Borrower or the Guarantors to
pay the Obligations when due and to perform their covenants and
agreements under the Loan Documents, or (iv)the value of the
assets of the Borrower and the Guarantors.
(r) ACCESS AGREEMENTS. The Administrative Agent
shall be reasonably satisfied that the Borrower has used its
best efforts to obtain and deliver to the Administrative Agent
Access Agreements duly-executed by the Borrower and each of the
landlords of the Borrower's warehouses located in Braintree,
Massachusetts and Edison, New Jersey.
(s) OTHER CLOSING DOCUMENTS. The Administrative
Agent shall have received all other documents, certificates and
instruments required to be delivered to it pursuant to this
Agreement and on the Closing Documents List and such documents
shall be satisfactory in form and substance to the
Administrative Agent.
(t) CLOSING DATE. The initial Credit Extension
hereunder shall occur on or prior to December 31, 1997, and, in
any event, within three (3) Business Days of the entry of the
Order.
SECTION 4.02.CONDITIONS PRECEDENT TO EACH LOAN AND EACH
LETTER OF CREDIT. The obligation of the Lenders to make each
Loan and of the Issuing Bank to issue each Letter of Credit,
including the initial Loan and the initial Letter of Credit, is
subject to the following conditions precedent:
(a) NOTICE. The Administrative Agent shall have
received a notice with respect to such borrowing or issuance, as
the case may be, as required by Article II.
(b) REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement and
the other Loan Documents or otherwise made in writing in
connection herewith or therewith shall be true and correct in
all material respects on and as of the date of each Borrowing or
the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date, other than
representations and warranties that relate solely to an earlier
date.
(c) NO DEFAULT. On the date of each Borrowing
hereunder and the issuance of each Letter of Credit, the
Borrower and Guarantors shall be in compliance with all of the
terms and provisions set forth herein to be observed or
performed and no Default or Event of Default shall have occurred
and be continuing.
(d) ORDER. The Order shall be in full force and
effect and shall not have been stayed, reversed, modified or
amended in any respect.
(e) BORROWING BASE CERTIFICATE. The Administrative
Agent shall have received the timely delivery of the most recent
Borrowing Base Certificate (dated no more than seven days prior
to the making of a Loan or the issuance of a Letter of Credit)
required to be delivered hereunder.
(f) PAYMENT OF FEES. The Borrower shall have paid to
the Administrative Agent the then unpaid balance of all accrued
and unpaid Fees then payable under and pursuant to this
Agreement and the Fee Letter.
The request by the Borrower for, and the acceptance by the
Borrower of, each extension of credit hereunder shall be deemed
to be a representation and warranty by the Borrower that the
conditions specified in this Section 4.02 have been satisfied at
that time and that after giving effect to such extension of
credit the Borrower shall continue to be in compliance with the
Borrowing Base.
V. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Loan, Letter of Credit or other Obligation
shall remain outstanding (unless such Letter of Credit is fully
collateralized to the satisfaction of the Administrative Agent),
the Borrower and each of the Guarantors agree that, unless the
Required Lenders shall otherwise consent in writing, the
Borrower and each Guarantor will:
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇ STATEMENTS, REPORTS, ETC. In the
case of the Borrower and the Guarantors, (i) deliver to the
Administrative Agent, the Issuing Bank, the Agent and each of
the Lenders:
(a) Within 90 days after the end of each fiscal year
of BI, BI's consolidated and the Borrower's consolidated balance
sheet and related statement of income and cash flows, showing
the financial condition of BI, the Borrower and the Guarantors
on a consolidated basis and the Borrower on a consolidated basis
as of the close of such fiscal year and the results of their
respective operations during such year, to be audited by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or other independent public accountants of recognized
national standing acceptable to the Required Lenders and
accompanied by an opinion of such accountants (which shall not
be qualified in any material respect other than with respect to
the Cases) and to be certified by a Financial Officer of the
Borrower to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of BI, the Borrower and the Guarantors on a
consolidated basis and the Borrower on a consolidated in
accordance with GAAP consistently applied;
(b) Within 45 days after the end of the first three
fiscal quarters of BI (commencing with the fiscal quarter ending
on or about April 30, 1998) and within 60 days after the end of
the fourth fiscal quarter of each fiscal year of BI, BI's
consolidated and the Borrower's consolidated balance sheets and
related statements of income and cash flows, showing the
financial condition of BI, the Borrower, and the Guarantors on a
consolidated basis and the Borrower on a consolidated basis as
of the close of such fiscal quarter and the results of their
respective operations during such fiscal quarter and the then
elapsed portion of the fiscal year, each certified by a
Financial Officer as fairly presenting the financial condition
and results of operations of BI, the Borrower and the Guarantors
on a consolidated basis and the Borrower on a consolidated basis
in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments;
(c) Concurrently with any delivery of financial
statements under (a) or (b) above, a certificate of the
accounting firm or a Financial Officer, as the case may be,
opining on or certifying such statements (i) certifying that no
Default or Event of Default has occurred, or, if such a Default
or Event of Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth computations
in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the provisions of Sections 6.04,
6.05 and 6.06 hereof;
(d) Within 30 days of the end of each fiscal month of
BI (commencing with the fiscal month ending on or about December
31, 1997) (or 45 days with respect to the fiscal month ending at
the end of each fiscal quarter of BI), the unaudited monthly
income statement, balance sheet and cash flow report of BI, the
Borrower and the Guarantors on a consolidated basis and the
Borrower on a consolidated basis as of the close of such fiscal
month and the results of their respective operations during such
fiscal period and the then elapsed portion of the fiscal year
(and such other cash flow reports and operating statements as
the Administrative Agent, the Issuing Bank, the Agent or any
Lender may reasonably request), all certified by a Financial
Officer as fairly presenting the results of operations of BI,
the Borrower and the Guarantors on a consolidated basis and the
Borrower on a consolidated basis, subject to normal year-end
audit adjustments;
(e) To the extent not otherwise required under this
Section 5.01, those additional reports listed on Schedule
5.01(e) hereto;
(f) Promptly after the same become publicly
available, copies of all periodic and other reports, proxy
statements and other materials filed by it with the Securities
and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or
with any national securities exchange, as the case may be;
(g) As soon as available and in any event (A) within
30 days after the Borrower or any of its ERISA Affiliates knows
or has reason to know that any Termination Event described in
clause (i) of the definition of Termination Event with respect
to any Single Employer Plan of the Borrower or such ERISA
Affiliate has occurred and (B) within 10 days after the Borrower
or any of its ERISA Affiliates knows or has reason to know that
any other Termination Event with respect to any such Plan has
occurred, a statement of a Financial Officer describing such
Termination Event and the action, if any, which the Borrower or
such ERISA Affiliate proposes to take with respect thereto;
(h) Promptly and in any event within 10 days after
receipt thereof by the Borrower or any of its ERISA Affiliates
from the PBGC copies of each notice received by the Borrower or
any such ERISA Affiliate of the PBGC's intention to terminate
any Single Employer Plan of the Borrower or such ERISA Affiliate
or to have a trustee appointed to administer any such Plan;
(i) Promptly and in any event within 30 days after
the filing thereof with the Internal Revenue Service, copies of
each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Single Employer Plan of
the Borrower or any of its ERISA Affiliates;
(j) Within 10 days after notice is given or required
to be given to the PBGC under Section 302(f)(4)(A) of ERISA of
the failure of the Borrower or any of its ERISA Affiliates to
make timely payments to a Plan, a copy of any such notice filed
and a statement of a Financial Officer of the Borrower setting
forth (A) sufficient information necessary to determine the
amount of the lien under Section 302(f)(3), (B) the reason for
the failure to make the required payments and (C) the action, if
any, which the Borrower or any of its ERISA Affiliates proposed
to take with respect thereto;
(k) Promptly and in any event within 10 days after
receipt thereof by the Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor, a copy of each notice received by
the Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability by a Multiemployer Plan, (B)
the determination that a Multiemployer Plan is, or is expected
to be, in reorganization within the meaning of Title IV of
ERISA, (C) the termination of a Multiemployer Plan within the
meaning of Title IV of ERISA, or (D) the amount of liability
incurred, or which may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause (A),
(B) or (C) above; and
(l) Promptly, from time to time, such other
information regarding the operations, business affairs and
financial condition of the Borrower or any Guarantor, or
compliance with the terms of any material loan or financing
agreements as the Administrative Agent, the Issuing Bank, the
Agent or any Lender may reasonably request.
(ii) Furnish to the Administrative Agent and its counsel
promptly after the same is available, copies of all pleadings,
motions, applications, judicial information, financial
information and other documents filed by or on behalf of the
Borrower or any of the Guarantors with the Bankruptcy Court in
the Cases or distributed by or on behalf of the Borrower or any
of the Guarantors to any official committee appointed in the
Cases or served upon the Borrower or any Guarantor in any of the
Cases.
SECTION 5.02.CORPORATE EXISTENCE. Do or cause to be done
and cause each of the Guarantors to do or cause to be done all
things necessary to preserve, renew and keep in full force and
effect its corporate existence, material rights, licenses,
permits and franchises and comply in all material respects with
all laws and regulations applicable to it.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇.
(a) Keep its insurable properties insured at all
times, against such risks, including fire and other risks
insured against by extended coverage, as is customary with
companies of the same or similar size in the same or similar
businesses in amounts and coverages reasonably satisfactory to
the Administrative Agent in its sole discretion.
(b) Maintain in full force and effect public
liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by
the Borrower or any Subsidiary, as the case may be, in such
amounts and with such deductibles as are customary with
companies of the same or similar size in the same or similar
businesses and in the same geographic area in amounts and
coverages reasonably satisfactory to the Administrative Agent in
its sole discretion.
(c) Maintain such other insurance as may be required
by law.
(d) Maintain the Administrative Agent, the Issuing
Bank, the Agent, the Co-Agents, BSI and the Lenders as
additional insureds on all liability policies of the Borrower
and the Guarantors.
SECTION 5.04.OBLIGATIONS AND TAXES. With respect to the
Borrower and each Guarantor, pay all its material obligations
arising after the Filing Date promptly and in accordance with
their terms and pay and discharge promptly all material taxes,
assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property
arising after the Filing Date, before the same shall become in
default, as well as all material lawful claims for labor,
materials and supplies or otherwise arising after the Filing
Date which, if unpaid, might become a Lien or charge upon such
properties or any part thereof; PROVIDED, HOWEVER, that the
Borrower and each Guarantor shall not be required to pay and
discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate
proceedings (if the Borrower and the Guarantors shall have set
aside on their books adequate reserves therefor).
SECTION 5.05.NOTICE OF EVENT OF DEFAULT, ETC. Promptly
give to the Administrative Agent, the Issuing Bank, the Agent
and each Lender notice in writing of any Default or Event of
Default.
SECTION 5.06.BORROWING BASE CERTIFICATE. Furnish to the
Administrative Agent as soon as available and in any event on or
before Thursday of each week a Borrowing Base Certificate for
the week ending on the immediately preceding Saturday,
substantially in the form of Exhibit A-1 or A-2, as the case may
be.
SECTION 5.07.ACCESS TO BOOKS AND RECORDS; INSPECTIONS.
(a) Maintain or cause to be maintained at all times
true and complete books and records of the financial operations
of the Borrower and the Guarantors.
(b) Provide the Administrative Agent, the Issuing
Bank, the Agent, the Lenders and their representatives access to
all such books and records (to the extent not covered by a legal
privilege and if any such materials are so privileged, subject
to the Administrative Agent's ability to discuss with the
Borrower, the Guarantors and their professional advisors the
matters contained in such privileged materials and otherwise be
satisfied with respect thereto, as determined by the
Administrative Agent) during regular business hours, in order
that they may examine and make abstracts or copies from such
books, accounts, records and other papers (including, but not
limited to, pertaining to Inventory and Receivables included in
the Borrowing Base) for the purpose of verifying the accuracy of
any information delivered by the Borrower or the Guarantors to
the Administrative Agent, the Issuing Bank, the Agent or the
Lenders pursuant to this Agreement or for any other purpose
reasonably related to this Agreement.
(c) At any reasonable time and from time to time
during regular business hours, permit the Administrative Agent,
the Issuing Bank, the Agent, either Co-Agent, any Lender or any
representatives of the Administrative Agent, the Issuing Bank,
the Agent, either Co-Agent or any such Lender (including,
without limitation, examiners, appraisers and consultants)
thereof to visit and/or inspect the properties and assets
(whether owned, leased or rented), systems and procedures
(including those relating to cash management) of the Borrower
and the Guarantors, to conduct Inventory and Receivables
examinations and verify the components of the Borrowing Base and
to discuss the assets, liabilities, business, operations,
systems, procedures, conditions or prospects of the Borrower or
any Guarantor with its directors, officers, employees, advisors
and consultants.
(d) Permit the Administrative Agent, the Issuing
Bank, the Agent, any Lender or any representatives thereof to
discuss directly with the Borrower's independent certified
public accountants the business, financial condition and other
affairs of the Borrower.
SECTION 5.08.FEES. In addition to the other Fees and
expenses due hereunder, pay on demand all reasonable fees and
expenses of any consultants, appraisers and advisors retained by
the Administrative Agent in connection herewith or any other
Loan Document.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇ PLAN; PROJECTIONS. As soon as
practicable, but in no event later than 30 days prior to each
fiscal year end, furnish to the Administrative Agent the
Borrower's preliminary business plan and financial projections
for the 12-month fiscal period ending on or about January 31 in
the next succeeding year (with the corresponding final business
plan to follow within 30 days after the end of such fiscal
year), in each case in form and substance satisfactory to the
Administrative Agent, and make a Financial Officer available to
meet and discuss the same with the Administrative Agent, the
Issuing Bank, the Agent, the Co-Agents and the Lenders.
SECTION 5.10.ERISA. The Borrower shall establish, maintain
and operate all Plans to comply in all material respects with
the provisions of ERISA, the Code, and all other requirements of
Law, other than to the extent that the Borrower is in good faith
contesting by appropriate proceedings and with adequate reserves
the validity or application of any such provision, law, rule,
regulation or interpretation.
SECTION 5.11.ENVIRONMENTAL AND OTHER MATTERS. The Borrower
and its Guarantors will conduct their businesses so as to comply
in all material respects with all applicable federal, state and
local laws, regulations, directions, ordinances, criteria and
guidelines, including, without limitation, environmental, land
use, occupational safety and health laws, regulations,
directions, ordinances, criteria, guidelines, requirements and
permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that the
Borrower or any of the Guarantors are contesting, in good faith
by appropriate legal proceedings, any such law, regulation,
direction, ordinance, criteria, guideline or interpretation
thereof or application thereof; PROVIDED, FURTHER, that the
Borrower and each of the Guarantors shall comply with the order
of any court or other Governmental Authority relating to such
laws unless the Borrower or the Guarantors shall currently be
prosecuting an appeal or proceedings for review and shall have
secured a stay of enforcement or execution postponing
enforcement or execution pending such appeal or proceedings for
review. The Borrower shall promptly take all actions necessary
to prevent the imposition of any Liens on any of its properties
arising out of or related to any environmental matters or
otherwise. At the request of the Administrative Agent, and at
the sole cost and expense of the Borrower, the Borrower shall
provide the Administrative Agent with any additional information
or reports relating to environmental matters and any potential
related liability resulting therefrom as the Administrative
Agent may reasonably request. In addition, the Borrower shall
provide the Administrative Agent, at the Borrower's sole cost
and expense, with copies of any environmental audits, surveys or
reports conducted in connection with the purchase or sale by the
Borrower of any real property.
SECTION 5.12.ACCESS AGREEMENTS. Until such time as the
Administrative Agent otherwise notifies the Borrower in writing,
the Borrower shall use its best efforts to obtain and deliver to
the Administrative Agent Access Agreements duly-executed by the
Borrower and each of the landlords of the Borrower's warehouses
located in Braintree, Massachusetts and Edison, New Jersey.
VI. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment
shall be in effect or any Loan, Letter of Credit, or other
Obligation shall remain outstanding unless such Letter of Credit
is fully collateralized to the satisfaction of the
Administrative Agent, the Borrower and each of the Guarantors
agree that, unless the Required Lenders shall otherwise consent
in writing, the Borrower and each of the Guarantors will not
(and will not apply to the Bankruptcy Court for authority to):
SECTION 6.01.LIENS AND PRE-PETITION CLAIM PAYMENTS.
(a) Incur, create, assume or suffer to exist any Lien
on any property of the Borrower or the Guarantors or the estate
in any of the Cases whether now owned or hereafter acquired by
the Borrower or apply to the Bankruptcy Court for authority so
to do, other than (i) Liens existing on the Filing Date as
described on Schedule 3.06A, (ii) Liens created or perfected
after the Filing Date and set forth on Schedule 3.06B, (iii)
Permitted Liens, (iv) pledges of the capital stock of the
Borrower, BAC and the Borrower's Subsidiaries, pledges of
unsecured intercompany Indebtedness owing by the Borrower to BAC
and BI, and Liens on trademarks and tradenames, all securing
BI's pre-petition revolving credit indebtedness and (v) Liens in
favor of the Administrative Agent, the Issuing Bank, the Agent,
the Co-Agents and the Lenders.
(b) Make any Pre-Petition Claim Payments that have
not been authorized by the Bankruptcy Court; or make any
Pre-Petition Claim Payments in an amount exceeding, cumulatively
and in the aggregate in any year (beginning with the year ending
one year after the Closing Date), (i) $3,600,000, with respect
to payments due to Bankers Trust Company, as agent, pursuant to
that certain Agreed Order Regarding Adequate Protection of the
Senior Bank Group's Interest and Related Relief, dated October
24, 1995, attached hereto as Exhibit F (the "BT STIPULATION")
(PROVIDED that such $3,600,000 amount shall be reduced PRO RATA
for any partial year of the Credit Agreement ending on the
Termination Date) and (ii) $2,400,000 with respect to all other
such Pre-Petition Claim Payments (whether or not such excess
Pre-Petition Claim Payments were authorized by the Bankruptcy
Court) (PROVIDED that such $2,400,000 amount shall be reduced
PRO RATA for any partial year of the Credit Agreement ending on
the Termination Date).
SECTION 6.02.MERGER, ETC. Consolidate or merge with or
into another Person (other than with Subsidiaries or BI so long
as the Borrower is the surviving entity), enter into any stock
or asset acquisitions or apply to the Bankruptcy Court for
authority so to do.
SECTION 6.03.INDEBTEDNESS. Contract, create, incur,
assume or suffer to exist any Indebtedness, or apply to the
Bankruptcy Court for authority so to do, except for (i)
Indebtedness under this Agreement; (ii) Indebtedness incurred
prior to the Filing Date to be discharged pursuant to a plan of
reorganization on the effective date thereof; and (iii)
Indebtedness incurred subsequent to the Filing Date secured by
purchase money Liens and Capitalized Leases in an aggregate
amount not to exceed $10,000,000.
SECTION ▇.▇▇.▇▇▇▇▇▇▇ EXPENDITURES. Make Capital
Expenditures in any fiscal year in excess of $20,000,000;
PROVIDED, that, so long as there is no Default or Event of
Default, if, as of the end of the Borrower's fiscal year, the
Borrower's EBITDA for the previous 12-month period exceeds
$40,000,000, the Borrower may increase its Capital Expenditures
above $20,000,000 for the next fiscal year by the lesser of (x)
50% of the EBITDA in excess of $40,000,000, and (y) $10,000,000.
SECTION 6.05.EBITDA. Permit EBITDA for the 12-month period
ending on the date specified below to be less than the amount
specified opposite such date:
Minimum
Date EBITDA
---- -------
fiscal quarter of the Borrower $ - 0 -
ending on or about July 31, 1998
fiscal quarter of the Borrower $5,000,000
ending on or about October 31, 1998
fiscal quarter of the Borrower $10,000,000
ending on or about January 31, 1999
and every fiscal quarter thereafter
SECTION 6.06.ACCOUNTS PAYABLE TO INVENTORY RATIO. Permit
the ratio of the amount of Accounts Payable to the value of
Inventory of the Borrower (valued on a first in - first out
basis at the lower of cost or market calculated on the retail
method in accordance with GAAP and shown on the Borrower's
financial statements), expressed as a percentage, at the end of
each month in any year set forth below to be less than the
percentage specified opposite such month:
Month Minimum Percentage
----- ------------------
January 32.5%
February 37.5%
March 37.5%
April 37.5%
May 37.5%
June 37.5%
July 37.5%
August 42.5%
September 42.5%
October 42.5%
November 42.5%
December 37.5%
SECTION 6.07.GUARANTEES AND OTHER LIABILITIES. Purchase or
repurchase (or agree, contingently or otherwise, so to do) the
Indebtedness of, or assume, guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment
or performance of any obligation or capability of so doing, or
otherwise), endorse or otherwise become liable, directly or
indirectly, in connection with the obligations, stock or
dividends of any Person, or permit any Subsidiary or Guarantor
so to do, or apply to the Bankruptcy Court for authority so to
do, except (i) for the Guaranty of the Guarantors hereunder and
(ii) to the extent existing as of the date hereof and described
on Schedule 6.07.
SECTION 6.08.CHAPTER 11 CLAIMS. Incur, create, assume,
suffer to exist or permit any other superpriority claim or other
claim which is pari passu with or senior to the claims of the
---- -----
Administrative Agent, the Issuing Bank, the Agent and the
Lenders against the Borrower or the Guarantors hereunder, or
apply to the Bankruptcy Court for authority so to do, except for
the Carve-Out.
SECTION 6.09.DIVIDENDS; CAPITAL STOCK. Declare or pay,
directly or indirectly, any dividends or make any other
distribution or payment, whether in cash, property, securities
or a combination thereof, with respect to (whether by reduction
of capital or otherwise) any shares of capital stock (or any
options, warrants, rights or other equity securities or
agreements relating to any capital stock), or set apart any sum
for the aforesaid purposes; PROVIDED that any subsidiary of the
Borrower may pay dividends to the Borrower.
SECTION 6.10.TRANSACTIONS WITH AFFILIATES. Sell or
transfer any property or assets to, or otherwise engage in any
other transactions with, any of its shareholders or Affiliates,
except that the Borrower or any Guarantor may engage in any of
the foregoing transactions in the ordinary course of business at
prices and on terms and conditions not less favorable to the
Borrower or such Guarantor than could be obtained on an
arm's-length basis from unrelated third parties and which are
consistent with past practices. Notwithstanding the foregoing,
the Borrower may not transfer any assets to any Guarantor except
for proceeds of the loans to the extent provided in Section
3.10.
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇▇▇▇, LOANS AND ADVANCES. Purchase,
hold or acquire any capital stock, evidences of indebtedness or
other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any
other interest in, any other Person (all of the foregoing,
"INVESTMENTS"), except for (i) ownership of the capital stock of
BAC by BI, the Borrower by BAC and each of the Guarantors listed
on Schedule 3.04 (other than BI and BAC) by the Borrower, (ii)
relocation or similar type loans or advances to new employees
not in excess of $750,000 in the aggregate during the term of
the Credit Agreement, (iii) Permitted Investments and (iv) as
provided in Section 3.10.
SECTION 6.12.DISPOSITION OF ASSETS. Sell or otherwise
dispose of any assets (including, without limitation, the
capital stock of any Subsidiary), except for (a)sales of
Inventory in arm's-length transactions in the ordinary course of
business, (b) (i) sales of Inventory, furniture, fixtures and
equipment located in, and the leases with respect to, the retail
stores set forth on Schedule 6.12 that are closed or otherwise
disposed of or (ii) the sale of obsolete or worn out equipment
disposed of in the ordinary course of business, (c) the
Specified Location Sales in accordance with the provisions of
Section 2.13(c) and (d) the assets listed on Schedule 7.01(f);
PROVIDED that the return to vendors of out-of-season, defective,
damaged or nonconforming Inventory or negotiated returns for
credit shall not be deemed prohibited by this Agreement.
SECTION 6.13.NATURE OF BUSINESS.
(a) Modify or alter in any material manner the nature and
type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted.
(b) Change, in any material respect, any of its inventory
or sales accounting, invoicing or billing practices or
management information or reporting systems except for the
change of the Borrower's Inventory tracking and accounting
system previously disclosed to the Administrative Agent
(PROVIDED that, after such
change, the Borrower continues to use accounting and tracking
methodologies consistent with those currently used by the
Borrower).
(c) Close any retail store, except as projected in the
Business Plan.
(d) Move Inventory from other than the locations listed on
Schedule 3.10A.
SECTION 6.14.CONFLICTING AGREEMENTS, ORDERS OR ACTIONS.
Enter into any stipulation or agreement, request or permit or
suffer itself or any Guarantor to become subject to any order
entered in any of the Cases, or take or permit any other Person
to take any other action which does or could conflict or
materially interfere with any of the rights, privileges,
benefits or remedies of the Administrative Agent, the Issuing
Bank, the Agent, the Co-Agents or any of the Lenders under any
of the Loan Documents, or materially diminish or impair the
practical realization of any such right, privilege, benefit or
remedy, including, without limitation, permit an order
dismissing the Case unless the Obligations have been repaid in
full in cash or fully collateralized pursuant to a first
priority, perfected security interest in assets of the Borrower,
to the satisfaction of the Administrative Agent in its sole and
absolute discretion.
VII. EVENTS OF DEFAULT
SECTION ▇.▇▇.▇▇▇▇▇▇ OF DEFAULT. If any of the following
events (each, an "EVENT OF DEFAULT") occurs:
(a) any material representation or warranty made by the
Borrower or any Guarantor in this Agreement or in any Loan
Document or in connection with this Agreement or with the
execution and delivery of the Notes or the credit extensions
hereunder or any material statement or representation made in
any report, financial statement, certificate or other document
furnished by the Borrower or any Guarantors to the
Administrative Agent, the Issuing Bank, the Agent or any of the
Lenders under or in connection with this Agreement or any other
Loan Document, shall prove to have been false or misleading in
any material respect when made or delivered; or
(b) default shall be made in the payment of any (i) Fees
or interest on the Loans when due, and such default shall
continue unremedied for more than three (3) Business Days or
(ii) principal of the Loans or other amounts payable by the
Borrower hereunder (including, without limitation, reimbursement
obligations or cash collateralization in respect of Letters of
Credit), when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise; or
(c) default shall be made by the Borrower or any Guarantor
in the due observance or performance of any covenant, condition
or agreement contained in Article VI hereof; or
(d) default shall be made by the Borrower or any Guarantor
in the due observance or performance of any other covenant,
condition or agreement to be observed or performed pursuant to
the terms of this Agreement or any of the other Loan Documents
and, with respect to Sections 5.01, 5.02 or 5.10, such default
shall continue unremedied for more than five (5) Business Days;
or
(e) the Borrower's or any Guarantor's Case shall be
dismissed or converted to a case under Chapter 7 of the
Bankruptcy Code; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code (or any Person having powers similar to a
trustee) shall be appointed in any of the Cases and the order
appointing such trustee shall not be reversed or vacated within
thirty (30) days after the entry thereof; or an application
shall be filed by the Borrower or any Guarantor for the approval
of any other superpriority claim (other than the Carve-Out) in
any of the Cases which is pari passu with or senior to the
claims of the
---- -----
Administrative Agent, the Issuing Bank, the Agent and the
Lenders against the Borrower or the Guarantors hereunder or
there shall arise any such pari passu or senior superpriority
claim or other
---- -----
claim; or the Order shall be stayed, modified, reversed or
vacated; or
(f) the Bankruptcy Court shall enter an order or orders
granting relief from the automatic stay applicable under Section
362 of the Bankruptcy Code to the holder or holders of any
security interest to permit foreclosure (or the granting of a
deed in lieu of foreclosure or the like) in any assets of the
Borrower or any of the Guarantors (other than those assets
listed on Schedule 7.01(f)) which have a value in excess of
$1,000,000 in the aggregate; or
(g) the Borrower shall fail to have retained and
thereafter maintained (with Bankruptcy Court approval) ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any other accounting firm of similar stature and
reputation reasonably acceptable to the Administrative Agent to
audit the financial statements of the Borrower and the
Guarantors and to perform related financial services; or
(h) failure of (i) ▇▇▇▇▇ ▇▇▇▇▇▇▇ or some other person
reasonably acceptable to the Administrative Agent, to
participate in the affairs of the Borrower and Guarantors as
Chairman of the Board of Directors and Chief Executive Officer
with no diminution in the present responsibilities and authority
related to this executive management position and (ii) ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, III or some other person reasonably acceptable to the
Administrative Agent, to act as Senior Vice President and Chief
Financial Officer, with no diminution in the present
responsibilities and authority related to this executive
management position; or
(i) any material provision of any Loan Document shall, for
any reason, cease to be valid and binding on the Borrower or any
of the Guarantors, or the Borrower or any of the Guarantors
shall so assert in any pleading filed in any court; or
(j) an order of the Bankruptcy Court shall be entered in
any of the Cases appointing an examiner with enlarged powers
relating to the operation of the business (powers beyond those
set forth in Section 1106(a)(3) and 1106(a)(4) of the Bankruptcy
Code) under Section 1106(b) of the Bankruptcy Code (other than
the appointment of an examiner or mediator as a result of the
reversal of the Bankruptcy Court's Memorandum Decision and Order
dated June 4, 1997, with powers limited to the intercompany
indebtedness issue to which such Decision and Order relates); or
(k) greater than fifty percent (50%) of the Borrower's
stores close for more than seven (7) consecutive days, unless
such closures are covered by business interruption insurance; or
(l) any one or more judgments or orders as to a
post-petition liability or debt for the payment of money in
excess of $6,000,000 in the aggregate shall be rendered against
the Borrower or any of the Guarantors and either (i)enforcement
proceedings shall have been commenced and shall be continuing by
any creditor upon such judgment or order or (ii)there shall be
any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal, payment or otherwise, shall not be in effect; or
(m) any non-monetary judgment or order with respect to a
post-petition event shall be rendered against the Borrower or
any of the Guarantors which does or would reasonably be expected
to (i) cause a material adverse change in the financial
condition, business, operations or assets of the Borrower and
the Guarantors taken as a whole on a consolidated basis, (ii)
have a material adverse effect on the ability of the Borrower or
any of the Guarantors to perform their respective obligations
under any Loan Document, or (iii) have a material adverse effect
on the rights and remedies of the Administrative Agent, the
Issuing Bank, the Agent, the Co-Agents or any Lender under any
Loan Document, and there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(n) the Borrower or the Guarantors shall (i) make any
Pre-Petition Claim Payments in an aggregate amount, counted
cumulatively from the Closing Date, in excess of (a) $3,600,000
per annum with respect to payments due to Bankers Trust Company,
as agent, pursuant to the BT Stipulation (PROVIDED that such
$3,600,000 amount shall be reduced pro rata for any partial year
--- ----
of the Credit Agreement ending on the Termination Date) and (b)
$2,400,000 per annum with respect to all other such Pre-Petition
Claim Payments, beginning with the year ending one year after
the Closing Date (PROVIDED that such $2,400,000 amount shall be
reduced pro rata for any partial year of the Credit Agreement
--- ----
ending on the Termination Date); or
(o) any Termination Event described in clauses (iii) or
(iv) of the definition of such term shall have occurred and
shall continue unremedied for more than 10 days and the sum
(determined as of the date of occurrence of such Termination
Event) of the Insufficiency of the Plan in respect of which such
Termination Event shall have occurred and be continuing and the
Insufficiency of any and all other Plans with respect to which
such a Termination Event (described in such clauses (iii) or
(iv)) shall have occurred and then exist is equal to or greater
than $5,000,000; or
(p) (i) the Borrower or any ERISA Affiliate thereof shall
have been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer Plan,
(ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds to contest such Withdrawal Liability and is
not in fact contesting such Withdrawal Liability in a timely and
appropriate manner, and (iii) the amount of such Withdrawal
Liability specified in such notice, when aggregated with all
other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the
date of such notification), exceeds $5,000,000 allocable to
post-petition obligations or requires payments exceeding
$500,000 per annum, in excess of the annual payments made with
respect to such MultiEmployer Plans by the Borrower or such
ERISA Affiliate for the plan year immediately preceding the plan
year in which such notification is received; or
(q) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions
of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years that include the date
hereof by an amount exceeding $5,000,000; or
(r) the Borrower or any ERISA Affiliate shall have
committed a failure described in Section 302(f) (1) of ERISA
(other than the failure to make any contribution accrued and
unpaid as of the Filing Date) and the amount determined under
Section 302 (f) (3) of ERISA is equal to or greater than
$5,000,000; or
(s) it shall be determined (whether by the Bankruptcy
Court or by any other judicial or administrative forum) that the
Borrower is liable for the payment of claims arising out of any
failure to comply (or to have complied) with applicable
environmental laws or regulations the payment of which will have
a material adverse effect on the financial condition, business,
properties, operations or assets of the Borrower or the Borrower
and/or the Guarantors, taken as a whole; or
(t) any Person or group (as defined in the Securities
Exchange Act of 1934, as amended), other than the holders of
voting stock of BI as of the Filing Date, shall acquire for the
first time the direct or indirect ownership (constructive or
otherwise), or the direct or indirect power to vote more than
fifty percent (50%) of the outstanding voting stock of BI; or
(u) The Purchase and Service Agreement shall be terminated,
or any other event shall occur thereunder which, in either case,
(i) would obligate the Borrower to purchase from the purchaser
and servicer thereunder any material portion of the receivables
then exiting thereunder (unless there is a simultaneous resale
of such receivables to a third-party for fair value on a
non-recourse basis) or to (ii) would cause the Borrower to pay
"collect-out fees" thereunder in excess of $7,000,000 in the
aggregate;
then, and in every such event and at any time thereafter during
the continuance of such event, and without further order of or
application to the Bankruptcy Court, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice
(a "DEFAULT NOTICE") to the Borrower (with a copy to counsel for
the Official Creditors' Committee appointed in the Cases) take
one or more of the following actions, at the same or different
times: (i) terminate forthwith all obligations of the Lenders
and the Issuing Bank to extend credit under this Agreement,
including any and all obligations to make Loans or to issue
Letters of Credit; (ii)declare the Loans then outstanding to be
forthwith due and payable, whereupon the principal of all
outstanding Loans together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document shall become
forthwith due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby
expressly waived by the Borrower and the Guarantors, anything
contained herein or in any other Loan Document to the contrary
notwithstanding; (iii) require the Borrower and the Guarantors
to deposit in the Cash Collateral Account, no later than the
first Business Day after such Default Notice is given, cash in
an amount equal to the sum of 105% of the aggregate amounts that
then are or thereafter may become available for drawing or
payment under all outstanding Letters of Credit and (without
limiting or restricting any application permitted under Sections
2.13 and 2.14) to the extent the Borrower and the Guarantors
shall fail to furnish such funds as demanded by the
Administrative Agent, the Administrative Agent shall be
authorized to debit the accounts of the Borrower and the
Guarantors maintained with the Administrative Agent in such
amount; (iv) set-off amounts in the Cash Collateral Account or
any other accounts maintained by the Administrative Agent
(except as provided in Section 2.13(h) and apply such amounts to
the obligations of the Borrower and the Guarantors hereunder and
in the other Loan Documents (but this clause (iv) shall not
limit or restrict any application permitted under Sections 2.13
and 2.14); and (v)exercise any and all remedies under the Loan
Documents and applicable law available to the Administrative
Agent, the Issuing Bank, the Agent, the Co-Agents and the
Lenders.
SECTION 7.02.WHEN CONTINUING. For all purposes under this
Agreement, each Default that has occurred and each Event of
Default that has occurred shall be deemed to be continuing at
all times thereafter unless it either (a) is cured or corrected
to the reasonable written satisfaction of the Required Lenders
or (b) is waived in writing by the Required Lenders.
VIII. THE ADMINISTRATIVE AGENT AND THE AGENT
SECTION 8.01.ADMINISTRATION BY ADMINISTRATIVE AGENT. The
general administration of the Loan Documents shall be by the
Administrative Agent. The Lenders, the Agent and the Issuing
Bank each hereby irrevocably authorizes the Administrative
Agent, at its discretion, to take or refrain from taking such
actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Loan Documents and the Notes as
are delegated by the terms hereof or thereof, as appropriate,
together with all powers reasonably incidental thereto. The
Administrative Agent shall have no duties or responsibilities
except as set forth in this Agreement and the remaining Loan
Documents. The Co-Agents shall have no responsibilities
hereunder other than as ▇▇▇▇▇▇▇.
SECTION 8.02.ADVANCES AND PAYMENTS.
(a) On the date of each Loan, the Administrative
Agent shall be authorized (but not obligated) to advance, for
the account of each of the Lenders, the amount of the Loan to be
made by it in accordance with its Commitment hereunder. Should
the Administrative Agent do so, each of the Lenders agrees
forthwith to reimburse the Administrative Agent in immediately
available funds for the amount so advanced on its behalf by the
Administrative Agent, together with interest at the Federal
Funds Effective Rate if not so reimbursed on the date due from
and including such date but not including the date of
reimbursement.
(b) Any amounts received by the Administrative Agent
in connection with this Agreement or the other Loan Documents
(other than amounts to which the Administrative Agent is
entitled pursuant to Sections 2.19, 5.08, 8.06, 10.05 and
10.06), the application of which is not otherwise provided for
in this Agreement shall be applied in the order of priority set
forth in Sections 2.14(a) and (b). All amounts to be paid to a
Lender, the Agent, either Co-Agent or the Issuing Bank by the
Administrative Agent shall be credited to that Lender, the
Agent, such Co-Agent or the Issuing Bank, as applicable, after
collection by the Administrative Agent, in immediately available
funds either by wire transfer or deposit in the correspondent
account of that ▇▇▇▇▇▇, the Agent, such Co-Agent or the Issuing
Bank with the Administrative Agent, as such Lender, the Agent,
such Co-Agent or the Issuing Bank and the Administrative Agent
shall from time to time agree.
SECTION 8.03.SHARING OF EXCESS PAYMENTS. Each of the
Lenders, the Agent, each Co-Agent and the Issuing Bank agrees
that if it shall, through the exercise of a right of banker's
lien, setoff or counterclaim against the Borrower or any
Guarantor, including, but not limited to, a secured claim under
Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim and received by
such Lender, the Agent, such Co-Agent or the Issuing Bank under
any applicable bankruptcy, insolvency or other similar law, or
otherwise, obtain payment in respect of its Obligations owed it
(an "EXCESS PAYMENT") as a result of which such Lender, the
Agent, such Co-Agent or the Issuing Bank has received payment of
any Loans or other Obligations outstanding to it in excess of
the amount that it would have received if all payments at any
time applied to the Loans and other Obligations had been applied
in the order of priority set forth in Section 2.14, then such
Lender, the Agent, such Co-Agent or the Issuing Bank shall
promptly purchase at par (and shall be deemed to have thereupon
purchased) from the other Lenders, the Agent, each Co-Agent and
the Issuing Bank, as applicable, a participation in the Loans
and Obligations outstanding to such other Persons, in an amount
determined by the Administrative Agent in good faith as the
amount necessary to ensure that the economic benefit of such
excess payment is reallocated in such manner as to cause such
excess payment and all other payments at any time applied to the
Loans and other Obligations to be effectively applied in the
order of priority set forth in Section 2.14; PROVIDED, that if
any such excess payment is thereafter recovered or otherwise set
aside such purchase of participations shall be correspondingly
rescinded (without interest). The Borrower expressly consents
to the foregoing arrangements and agrees that any Lender, the
Agent, any Co-Agent or the Issuing Bank holding (or deemed to be
holding) a participation in any Loan or other Obligation may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the
Borrower to such Lender, the Agent, such Co-Agent or the Issuing
Bank as fully as if such Lender, the Agent, such Co-Agent or the
Issuing Bank held a Note and was the original obligee thereon,
in the amount of such participation.
SECTION 8.04.AGREEMENT OF REQUIRED LENDERS. Upon any
occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of the Required Lenders,
action shall be taken by the Administrative Agent or the Agent
for and on behalf or for the benefit of all Lenders upon the
direction of the Required Lenders, and any such action shall be
binding on all Lenders. No amendment, modification, consent, or
waiver shall be effective except in accordance with the
provisions of Section 10.10.
SECTION 8.05.LIABILITY OF ADMINISTRATIVE AGENT AND THE AGENT.
(a) The Administrative Agent and the Agent, when
acting on behalf of the Lenders and the Issuing Bank, may
execute any of their respective duties under this Agreement by
or through any of their respective officers, agents and
employees, and neither the Administrative Agent, the Agent, nor
their respective directors, officers, agents or employees shall
be liable to the Lenders, the Co-Agents or the Issuing Bank or
any of them for any action taken or omitted to be taken in good
faith, or be responsible to the Lenders, the Co-Agents or the
Issuing Bank or to any of them for the consequences of any
oversight or error of judgment, or for any loss, except to the
extent of any liability imposed by law by reason of the
Administrative Agent's or the Agent's own gross negligence or
willful misconduct. The Administrative Agent, the Agent and
their respective directors, officers, agents and employees shall
in no event be liable to the Lenders, the Co-Agents or the
Issuing Bank or to any of them for any action taken or omitted
to be taken by them pursuant to instructions received by them
from the Required Lenders or in reliance upon the advice of
counsel selected by them. Without limiting the foregoing,
neither the Administrative Agent or the Agent, nor any of their
respective directors, officers, employees, or agents shall be
responsible to any Lender, the Co-Agents or the Issuing Bank for
the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement,
warranty or representation in, this Agreement, any Loan Document
or any related agreement, document or order, or shall be
required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or any Guarantor of
any of the terms, conditions, covenants, or agreements of this
Agreement or any of the Loan Documents.
(b) Neither the Administrative Agent or the Agent,
nor any of their respective directors, officers, employees, or
agents shall have any responsibility to the Borrower or the
Guarantors on account of the failure or delay in performance or
breach by any Lender, any Co-Agent or the Issuing Bank or by the
Borrower or the Guarantors of any of their respective
obligations under this Agreement or the Notes or any of the Loan
Documents or in connection herewith or therewith.
(c) The Administrative Agent and the Agent, in such
capacities hereunder, shall be entitled to rely on any
communication, instrument, or document reasonably believed by
such person to be genuine or correct and to have been signed or
sent by a person or persons believed by such person to be the
proper person or persons, and, such person shall be entitled to
rely on advice of legal counsel, independent public accountants,
and other professional advisers and experts selected by such
person.
SECTION 8.06.REIMBURSEMENT AND INDEMNIFICATION. Each
Lender agrees (i)to reimburse (x)the Administrative Agent and
the Agent for such ▇▇▇▇▇▇'s Commitment Percentage of any
expenses and fees incurred for the benefit of the Lenders, the
Co-Agents or the Issuing Bank under this Agreement, the Notes
and any of the Loan Documents, including, without limitation,
counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, the Co-Agents or the
Issuing Bank, and any other expense incurred in connection with
the operations or enforcement thereof not reimbursed by the
Borrower or the Guarantors and (y)the Administrative Agent and
the Agent for such ▇▇▇▇▇▇'s Commitment Percentage of any
expenses of the Administrative Agent and the Agent incurred for
the benefit of the Lenders, the Co-Agents or the Issuing Bank
that the Borrower has agreed to reimburse pursuant to Section
10.05 and has failed to so reimburse and (ii)to indemnify and
hold harmless the Administrative Agent, the Agent and any of
their directors, officers, employees, or agents, on demand, in
the amount of such ▇▇▇▇▇▇'s Commitment Percentage, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against it or any of them
in any way relating to or arising out of this Agreement, the
Notes or any of the Loan Documents or any action taken or
omitted by them or any of them under this Agreement, the Notes
or any of the Loan Documents to the extent not reimbursed by the
Borrower or the Guarantors (except such as shall result from
their respective gross negligence or willful misconduct).
SECTION 8.07.RIGHTS OF ADMINISTRATIVE AGENT AND AGENT. It
is understood and agreed that each of BBNA and BBRF shall have
the same rights and powers hereunder (including the right to
give such instructions) as the other Lenders and may exercise
such rights and powers, as well as its rights and powers under
other agreements and instruments to which it is or may be party,
and engage in other transactions with the Borrower or any
Guarantor, as though it were not the Administrative Agent or the
Agent, respectively, of the Lenders under this Agreement.
SECTION 8.08.INDEPENDENT LENDERS AND ISSUING BANK. The
Lenders and the Issuing Bank each acknowledges that it has
decided to enter into this Agreement and to make the Loans or
issue the Letters of Credit hereunder based on its own analysis
of the transactions contemplated hereby and of the
creditworthiness of the Borrower and the Guarantors and agrees
that the Administrative Agent and the Agent shall bear no
responsibility therefor.
SECTION 8.09.NOTICE OF TRANSFER. The Administrative Agent
and the Agent may deem and treat a Lender party to this
Agreement as the owner of such ▇▇▇▇▇▇'s portion of the Loans for
all purposes, unless and until, and except to the extent, an
Assignment and Acceptance shall have become effective as set
forth in Section 10.03(b).
SECTION 8.10.SUCCESSOR ADMINISTRATIVE AGENT OR AGENT. The
Administrative Agent or the Agent may resign at any time by
giving five (5) Business Days' written notice thereof to the
Lenders, the Issuing Bank, the Agent and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent or Agent, as the case
may be, which shall be reasonably satisfactory to the Borrower.
If no successor Administrative Agent or Agent shall have been so
appointed by the Required Lenders and shall have accepted such
appointment, within 30 days after the retiring Administrative
Agent's or Agent's giving of notice of resignation, the retiring
Administrative Agent or Agent, as the case may be, may, on
behalf of the Lenders, the Agent and the Issuing Bank, appoint a
successor Administrative Agent or Agent, as the case may be,
which shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and having a
combined capital and surplus of a least $100,000,000, which, so
long as there is no Default or Event of Default, shall be
reasonably satisfactory to the Borrower. Upon the acceptance of
any appointment as Administrative Agent or Agent hereunder by a
successor Administrative Agent or Agent, as the case may be,
such successor Administrative Agent or Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent or
Agent, as the case may be, and the retiring Administrative Agent
or Agent, as the case may be, shall be discharged from its
duties and obligations under this Agreement. After any retiring
Administrative Agent's or Agent's resignation hereunder as
Administrative Agent or Agent, the provisions of this Article
VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent or
Agent under this Agreement.
SECTION 8.11.REPORTS AND FINANCIAL STATEMENTS. Promptly
after receipt thereof from the Borrower, the Administrative
Agent shall remit to each Lender, the Agent and the Issuing Bank
copies of all financial statements and reports required to be
delivered by the Borrower hereunder.
IX. GUARANTY
SECTION 9.01.GUARANTY.
(a) Each of the Guarantors unconditionally and
irrevocably guarantees the due and punctual payment and
performance by the Borrower of the Obligations. Each of the
Guarantors further agrees that the Obligations may be extended
or renewed, in whole or in part, without notice to or further
assent from it, and it will remain bound upon this guaranty
notwithstanding any extension or renewal of any of the
Obligations. The Obligations of the Guarantors shall be joint
and several.
(b) Each of the Guarantors waives presentation to,
demand for payment from and protest to the Borrower or any other
Guarantor, and also waives notice of protest for nonpayment.
The obligations of the Guarantors hereunder shall not be
affected by (i)the failure of the Administrative Agent, the
Agent, the Issuing Bank, either Co-Agent or a Lender to assert
any claim or demand or to enforce any right or remedy against
the Borrower or any other Guarantor under the provisions of this
Agreement or any other Loan Document or otherwise; (ii)any
extension or renewal of any provision hereof or thereof;
(iii)any rescission, waiver, compromise, acceleration, amendment
or modification of any of the terms or provisions of any of the
Loan Documents; (iv)the release, exchange, waiver or foreclosure
of any security held by the Administrative Agent for the
Obligations or any of them; (v)the failure of the Administrative
Agent, the Issuing Bank, the Agent, either Co-Agent or a Lender
to exercise any right or remedy against any other Guarantor; or
(vi)the release or substitution of any Guarantor or any other
Guarantor.
(c) Each of the Guarantors further agrees that this
guaranty constitutes a guaranty of performance and of payment
when due and not just of collection, and waives any right to
require that any resort be had by the Administrative Agent, the
Issuing Bank, the Agent, either Co-Agent or a Lender to any
security held for payment of the Obligations or to any balance
of any deposit, account or credit on the books of the
Administrative Agent, the Issuing Bank, the Agent, either
Co-Agent or a Lender in favor of the Borrower or any other
Guarantor, or to any other Person.
(d) Each of the Guarantors hereby waives any defense
that it might have based on a failure to remain informed of the
financial condition of the Borrower and of any other Guarantor
and any circumstances affecting the ability of the Borrower to
perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected
by the genuineness, validity, regularity or enforceability of
the obligations, the Notes or any other instrument evidencing
any Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor or by any other
circumstance relating to the obligations which might otherwise
constitute a defense to this Guaranty. None of the
Administrative Agent, the Issuing Bank, the Agent, either
Co-Agent or any of the Lenders makes any representation or
warranty in respect to any such circumstances or shall have any
duty or responsibility whatsoever to any Guarantor in respect of
the management and maintenance of the obligations.
(f) Subject to the provisions of Section 7.01, upon
the Obligations becoming due and payable (by acceleration or
otherwise), the Lenders, the Issuing Bank, the Agent, the
Co-Agents and the Administrative Agent shall be entitled to
immediate payment of such obligations by the Guarantors upon
written demand by the Administrative Agent, without further
application to or order of the Bankruptcy Court.
SECTION ▇.▇▇.▇▇ IMPAIRMENT OF GUARANTY. The obligations of
the Guarantors hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment, or termination
whatsoever by reason of the invalidity, illegality or
unenforceability of the obligations. Without limiting the
generality of the obligations of the Guarantors hereunder shall
not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent, the Issuing Bank, the
Agent, either Co-Agent or a Lender to assert any claim or demand
or to enforce any remedy under this Agreement or any other
agreement, by any waiver or modification of any provision
thereof, by any default, failure or delay, willful or otherwise,
in the performance of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which
may or might in any manner or to any extent vary the risk of the
Guarantors or would otherwise operate as a discharge of the
Guarantors as a matter of law, unless and until the obligations
are paid in full.
SECTION 9.03.SUBROGATION. Upon payment by any Guarantor of
any sums to the Administrative Agent, the Issuing Bank, the
Agent, either Co-Agent or a Lender hereunder, all rights of such
Guarantor against the Borrower arising as a result thereof by
way of right of subrogation or otherwise, shall in all respects
be subordinate and junior in right of payment to the prior final
and indefeasible payment in full of all the Obligations. If any
amount shall be paid to such Guarantor for the account of the
Borrower, such amount shall be held in trust for the benefit of
the Administrative Agent, the Issuing Bank, the Agent, the
Co-Agents and the Lenders and shall forthwith be paid to the
Administrative Agent, the Issuing Bank, the Agent, the Co-Agents
and the Lenders to be credited and applied to the Obligations,
whether matured or unmatured.
SECTION ▇.▇▇.▇▇▇▇▇▇ AGREEMENT. Each of the Guarantors
acknowledges that it has read the Loan Documents and agrees to
perform and observe all the of the terms and provisions herein
and therein applicable thereto.
X. MISCELLANEOUS
SECTION 10.01.NOTICES. Notices and other communications
provided for herein shall be in writing (including telegraphic,
telex, facsimile or cable communication) and shall be mailed,
telegraphed, telexed, telecopied, transmitted, cabled or
delivered to the Borrower or any Guarantor at One Bradlees
Circle, P.O. Box 859051, Braintree, MA 02185-9051, Attention:
Chief Financial Officer (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), and
to a Lender, the Issuing Bank, the Agent, either Co-Agent or the
Administrative Agent to it at its address set forth on the
signature pages of this Agreement, or such other address as such
party may from time to time designate by giving written notice
to the other parties hereunder. All notices and other
communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given
on the fifth Business Day after the date when sent by registered
or certified mail, postage prepaid, return receipt requested, if
by mail; or when delivered to the telegraph company, charges
prepaid, if by telegram; or when receipt is acknowledged, if by
any telegraphic communications or facsimile equipment of the
sender; in each case addressed to such party as provided in this
Section 10.01 or in accordance with the latest unrevoked written
direction from such party; PROVIDED, HOWEVER, that in the case
of notices to the Administrative Agent notices pursuant to the
preceding sentence and pursuant to Article II shall be effective
only when received by the Administrative Agent. Copies of all
notices and other communications given to the Borrower shall go
to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
SECTION 10.02. SURVIVAL OF AGREEMENT, REPRESENTATIONS AND
WARRANTIES, ETC. All warranties, representations and covenants
made by the Borrower or any Guarantor herein or in any
certificate or other instrument delivered by it or on its behalf
in connection with this Agreement shall be considered to have
been relied upon by the Lenders, the Issuing Bank, the Agent,
the Co-Agents and the Administrative Agent and shall survive the
making of the Loans and the issuance of Letters of Credit herein
contemplated and the issuance and delivery of the Notes and the
Letters of Credit, regardless of any investigation made by any
Lender, the Issuing Bank, the Agent, either Co-Agent and the
Administrative Agent or on its behalf and shall continue in full
force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid and so long as the
Commitments have not been terminated. All statements in any
such certificate or other instrument shall constitute
representations and warranties by the Borrower and the
Guarantors hereunder with respect to the Borrower.
SECTION 10.03.SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, the
Issuing Bank, the Agent, the Co-Agents and the Lenders and their
respective successors and assigns. Neither the Borrower nor any
of the Guarantors may assign or transfer any of their rights or
obligations hereunder without the prior written consent of all
of the Lenders, the Issuing Bank, the Agent, the Co-Agents and
the Administrative Agent. Each Lender may sell participations
to any Person in all or part of any Loan, or all or part of its
Note or Commitment, in which event, without limiting the
foregoing, the provisions of Section 2.15 and 2.18 shall inure
to the benefit of each purchaser of a participation (PROVIDED
that such participant shall look solely to the seller of such
participation for such benefits and the Borrower's and the
Guarantors' liability, if any, under Sections 2.15 and 2.18
shall not be increased as a result of the sale of any such
participation) and the treatment of payments pursuant to Section
2.17, shall be determined as if such Lender had not sold such
participation. In the event any Lender shall sell any
participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower and
each of the Guarantors relating to the Loans, including, without
limitation, the right to approve any amendment, modification or
waiver of any provision of this Agreement other than amendments,
modifications or waivers which (i)reduce any Fees payable
hereunder to the Lenders, (ii)reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of
any Loan or the rate of interest payable hereunder or
(iii)extend the maturity of the Borrower's obligations
hereunder. The sale of any such participation, shall not alter
the rights and obligations of the Lender selling such
participation hereunder with respect to the Borrower.
(b) Each Lender may assign to one or more Lenders or
Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement; PROVIDED, HOWEVER, that
(i)other than in the case of an assignment to a Person at least
50% owned by the assignor Lender, or by a common parent of both,
or to another Lender, the Administrative Agent and the Issuing
Bank must give their prior written consent, which consent will
not be unreasonably withheld, (ii)the aggregate amount of the
Commitment and/or Loans held by each of the assigning and
assignee Lenders subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent and after
giving effect to such assignment) shall, unless otherwise agreed
to in writing by the Borrower (so long as there is no Event of
Default) and the Administrative Agent, in no event be less than
$7,500,000 (unless the assigning Lender assigns its entire
remaining Commitment, in which case such assigning Lender's
Commitment shall be $0), and (iii)the parties to each such
assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance with blanks
appropriately completed, together with any Note subject to such
assignment and a processing and recordation fee of $3,000. Upon
such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and
Acceptance, which effective date shall be within ten Business
Days after the execution thereof (unless otherwise agreed to in
writing by the Administrative Agent), (A)the assignee thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a
Lender hereunder and (B)the Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto).
The Borrower shall have no liability for the $3,000 processing
and recordation fee, but shall be responsible for its own
expenses and the expenses of the Administrative Agent.
Notwithstanding the foregoing, unless and until an Event of
Default has occurred, BBNA and BBRF agree to hold, between them,
Commitments totalling at least $25,000,000 in the aggregate;
PROVIDED that, if BBNA and BBRF's combined Commitment or, if
greater, the aggregate amount of their Loans outstanding, is
reduced below the lesser of (x) 2.5% of the then Total
Commitments or total Loans outstanding, as applicable, or (y)
$5,000,000 after the occurrence of an Event of Default, BBNA
will, upon the request of the Required ▇▇▇▇▇▇▇, resign as
Administrative Agent hereunder pursuant to Section 8.10.
(c) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i)other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, such Lender assignor makes no representation or warranty
and assumes no responsibility with respect to any statements
warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the other Loan Documents;
(ii)such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of the Borrower or any Guarantor or the performance or
observance by the Borrower or any Guarantor of any of its
obligations under this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant
hereto; (iii)such assignee confirms that it has received a copy
of this Agreement and the other Loan Documents, together with
copies of the financial statements referred to in Section 3.04
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv)such assignee
will, independently and without reliance upon the Administrative
Agent, such ▇▇▇▇▇▇ assignor or any other Lender and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v)such assignee
appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by
the terms thereto, together with such powers as are reasonably
incidental thereto; and (vi)such assignee agrees that it will
perform in accordance with their terms all obligations that by
the terms of this Agreement are required to be performed by it
as a Lender.
(d) The Administrative Agent shall maintain at its
office a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "REGISTER").
The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrower, the Guarantors, the
Administrative Agent, the Issuing Bank, the Agent, the Co-Agents
and the Lenders shall treat each Person the name of which is
recorded in the Register as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee thereunder
together with any Note subject to such assignment and the fee
payable in respect thereto, the Administrative Agent shall, if
such Assignment and Acceptance has been completed with blanks
appropriately filled, (i)accept such Assignment and Acceptance,
(ii)record the information contained therein in the Register and
(iii)give prompt written notice thereof to the Borrower
(together with a copy thereof). Within five Business Days after
receipt of notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for
the surrendered Note a new Note to the order of such assignee in
an amount equal to the Commitment and/or Loans assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained Commitments and/or Loans hereunder, a new
Note to the order of the assigning Lender in an amount equal to
the Commitment and/or Loans retained by it hereunder. Such new
Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note, shall be
dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the surrendered
Note. Thereafter, such surrendered Note shall be marked
canceled and returned to the Borrower.
(f) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation
pursuant to this Section 10.03, disclose to the assignee or
participant or proposed assignee or participant, any information
relating to the Borrower or any of the Guarantors furnished to
such Lender by or on behalf of the Borrower or any of the
Guarantors; PROVIDED that prior to any such disclosure, each
such assignee or participant or proposed assignee or participant
shall agree in writing to be bound by the provisions of Section
10.04.
(g) The Borrower hereby agrees to actively assist and
cooperate with the Administrative Agent in the Administrative
Agent's efforts to sell participations herein (as set forth in
Section 10.03(a)) and assign to one or more Lenders or Eligible
Assignees a portion of its interests, rights and obligations as
a Lender under this Agreement (as set forth in Section 10.03(b)).
(h) Notwithstanding the provisions of this Section
10.03, each Lender may at any time pledge or assign its interest
in any Loans or other Obligations to any Reserve Bank in the
Federal Reserve System.
SECTION 10.04.CONFIDENTIALITY. Each Lender agrees to keep,
and to cause its agents, attorneys and financial advisors to
keep, any information delivered or made available by the
Borrower or any of the Guarantors to it confidential from anyone
other than persons employed or retained by such Lender who are
or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; PROVIDED that nothing
herein shall prevent any Lender from disclosing such information
(i)to any other Lender, (ii)to any other person if reasonably
incidental to the administration of the Loans, (iii)upon the
order of any court or administrative agency, (iv)upon the
request or demand of any regulatory agency or authority,
(v)which has been publicly disclosed other than as a result of a
disclosure by the Administrative Agent or any Lender which is
not permitted by this Agreement, (vi)in connection with any
litigation to which the Administrative Agent, the Agent, any
Lender, the Issuing Bank, either Co-Agent or their respective
Affiliates may be a party, (vii)to the extent reasonably
required in connection with the exercise of any remedy
hereunder, (viii)to such ▇▇▇▇▇▇'s legal counsel and independent
auditors, (ix)to any actual or proposed participant or assignee
of all or part of its rights hereunder subject to the proviso in
Section 10.03(f) and (x) to the extent required by law.
SECTION 10.05.EXPENSES; DOCUMENTARY TAXES. Whether or not
the transactions hereby contemplated shall be consummated, the
Borrower and the Guarantors jointly and severally agree to pay
all reasonable out-of-pocket expenses incurred by the
Administrative Agent and the Agent (including but not limited to
the reasonable fees and disbursements of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special counsel for the Administrative Agent and the Agent, and
any other replacement counsel that the Administrative Agent and
the Agent shall retain) in connection with the preparation,
execution, delivery and administration of this Agreement, the
Notes and the other Loan Documents, the making of the Loans and
the issuance of the Letters of Credit, the syndication of the
transactions contemplated hereby, the reasonable costs, fees and
expenses of the Administrative Agent and the Agent (including
but not limited to the reasonable fees and disbursements of
internal and third-party consultants and auditors) in connection
with their periodic field audits and appraisals, monitoring and
valuation of collateral (including, without limitation,
Inventory and Receivables) and reasonable syndication expenses
of the Administrative Agent, and all reasonable out-of-pocket
expenses incurred by the Lenders, the Issuing Bank, the Agent,
the Co-Agents and the Administrative Agent in the enforcement or
protection of the rights of any one or more of the Lenders, the
Issuing Bank, the Agent, the Co-Agents or the Administrative
Agent in connection with this Agreement, the Notes or the other
Loan Documents, including but not limited to the reasonable fees
and disbursements of any counsel for the Lenders, the Issuing
Bank, the Agent, the Co-Agents or the Administrative Agent.
Such payments shall be made on the date of entry of the Order
and thereafter on demand. Whether or not the transactions
hereby contemplated shall be consummated, the Borrower and the
Guarantors agree to reimburse the Administrative Agent, the
Issuing Bank, the Agent, the Co-Agents and the Lenders for the
Fees and expenses required by the Fee Letter and the
reimbursement provisions thereof are hereby incorporated herein
by reference. The obligations of the Borrower and the
Guarantors under this Section 10.05 shall survive the
termination of this Agreement and/or the payment of the Loans
and/or the reimbursement of the Letters of Credit. The fees and
expenses payable hereunder are in addition to those payable by
the Borrower or the Guarantors under any other Loan Document.
SECTION 10.06.INDEMNITY. The Borrower and each of the
Guarantors jointly and severally agree to defend, indemnify and
hold harmless the Administrative Agent, the Issuing Bank, the
Agent, BSI, BBNA, BBRF, the Co-Agents and each Lender and their
respective Affiliates and each of their respective directors,
officers, employees, attorneys, partners, beneficiaries,
trustees and agents (each an "INDEMNIFIED PARTY") from and
against any and all losses, claims, damages, liabilities, costs
and expenses (whether or not suit is brought) incurred by such
Indemnified Party arising out of claims made by any Person in
any way relating to the transactions contemplated hereby or by
the other Loan Documents or any litigation, investigation or
proceeding related hereto or thereto but excluding therefrom, in
the case of an Indemnified Party, all losses, claims, damages,
liabilities, costs and expenses arising out of or resulting from
conduct to the extent determined by final order of a court of
competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Party.
SECTION 10.07. CHOICE OF LAW. THIS AGREEMENT, THE NOTES
AND THE OTHER LOAN DOCUMENTS SHALL IN ALL RESPECTS BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE.
SECTION ▇▇.▇▇.▇▇ WAIVER. No failure on the part of the
Administrative Agent, the Issuing Bank, the Agent, either
Co-Agent or any of the Lenders to exercise, and no delay in
exercising, any right, power or remedy hereunder or under the
Notes or any of the other Loan Documents shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 10.09. EXTENSION OF MATURITY. Except as otherwise
set forth in the definition of "Interest Period," if any payment
of principal of or interest on the Notes or any other amount due
hereunder becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest
shall be payable thereon at the rate herein specified during
such extension.
SECTION 10.10.AMENDMENTS, ETC.
(a) No modification, amendment or waiver of any
provision of this Agreement, and no consent to any departure by
the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for
which given; PROVIDED, HOWEVER, that:
(1) No such modification, amendment or waiver
shall without the written consent of all of the Lenders (i)amend
or modify any provision of this Agreement which provides for the
unanimous consent or approval of the Lenders, (ii)amend this
Section 10.10 or the definition of Required Lenders, (iii)amend
or modify the Superpriority Claim status of the Lenders
contemplated by Section 2.23 or otherwise modify or amend
Section 6.08 or waive any Event of Default relating thereto,
(iv)amend Section6.01 so as to permit any Lien on any assets of
the Borrower or the Guarantors not otherwise permitted on the
Closing Date, (v)increase the Commitment of a Lender (it being
understood that a waiver of an Event of Default shall not
constitute an increase in the Commitment of a Lender),
(vi)reduce the principal amount of any Loan or the rate of
interest payable thereon, (vii)extend any date for the payment
of interest hereunder, (viii)reduce any Fees payable hereunder,
(ix)extend the Maturity Date, (x) increase advance rates above
the level in effect on the Closing Date, (xi) increase the
Overadvance Amount or (xii) permit the sale of a material
portion of the assets of the Borrower and the Guarantors.
(2) No such amendment, modification or waiver
may adversely affect the rights and obligations of the
Administrative Agent, the Agent, either Co-Agent or the Issuing
Bank hereunder without its prior written consent.
(3) No notice to or demand on the Borrower or
any Guarantor shall entitle the Borrower or any Guarantor to any
other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any
amendment, modification, waiver or consent authorized as
provided herein, whether or not a Note shall have been marked to
indicate such amendment, modification, waiver or consent and any
consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is
so marked. No amendment to this Agreement shall be effective
against the Borrower or any Guarantor unless signed by the
Borrower or such Guarantor, as the case may be.
(b) Notwithstanding anything to the contrary
contained in Section 10.10(a), in the event that the Borrower
requests that this Agreement be modified, amended or waived in a
manner which would require the unanimous consent of all of the
Lenders and such amendment is approved by the Required Lenders,
but not unanimously by the Lenders, the Borrower and the
Required Lenders shall be permitted to amend this Agreement
without the consent of the Lender or Lenders which did not agree
to the modification or amendment requested by the Borrower (such
Lender or Lenders, collectively the "MINORITY LENDERS") to
provide for (w)the termination of the Commitment of each of the
Minority Lenders, (x)the addition to this Agreement of one or
more other financial institutions (each of which shall be an
Eligible Assignee), or an increase in the Commitment of one or
more of the Required Lenders, so that the Total Commitment after
giving effect to such amendment shall be in the same amount as
the Total Commitment immediately before giving effect to such
amendment, (y)if any Loans are outstanding at the time of such
amendment, the making of such additional Loans by such new or
increasing Lender or Lenders, as the case may be, as may be
necessary to repay in full the outstanding Loans of the Minority
Lenders immediately before giving effect to such amendment and
(z)such other modifications to this Credit Agreement as may be
appropriate.
SECTION 10.11.EXIT FINANCING. Subject to the satisfaction
(or waiver by the Administrative Agent, the Agent, the Lenders
and the Issuing Bank) of each condition precedent to
effectiveness contained therein, and provided that there is not
then existing any Default or Event of Default hereunder, on the
Termination Date the Borrower may utilize the Exit Facility (i)
to make borrowings thereunder to repay the Obligations and (ii)
to convert Letters of Credit outstanding hereunder to Letters of
Credit outstanding under the Exit Facility (notwithstanding the
provisions of Sections 2.02(b) and 2.10(b) hereof); PROVIDED
that, in the case of clauses (i) and (ii) above, all of the
conditions to such borrowings or the issuance of such Letters of
Credit, as applicable, under the Exit Facility are otherwise
satisfied. For the avoidance of doubt, the Borrower and the
Guarantors hereby agree that their obligations to repay all
Obligations owing hereunder are absolute and unconditional and
not subject to or conditioned upon the closing of the Exit
Facility or the making of any loans thereunder.
SECTION 10.12.SEVERABILITY. Any provision of this
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 10.13.HEADINGS. Section headings used herein are
for convenience only and are not to affect the construction of
or be taken into consideration in interpreting this Agreement.
SECTION 10.14.EXECUTION IN COUNTERPARTS. This Agreement
may be executed in any number of counterparts, each of which
shall constitute an original, but all of which taken together
shall constitute one and the same instrument.
SECTION 10.15.PRIOR AGREEMENTS. This Agreement and the
other Loan Documents represent the entire agreement of the
parties with regard to the subject matter hereof and thereof and
the terms of any letters and other documentation entered into
between the Borrower or a Guarantor and any Lender, the Issuing
Bank, the Agent, the Co-Agents or the Administrative Agent prior
to the execution of this Agreement which relate to Loans or
Letters of Credit to be made or issued hereunder shall be
replaced by the terms of this Agreement.
SECTION 10.16.FURTHER ASSURANCES. Whenever and so often as
reasonably requested by the Administrative Agent, the Borrower
and the Guarantors will promptly execute and deliver or cause to
be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause
to be done all such other and further things as may be necessary
and reasonably required in order to further and more fully vest
in the Administrative Agent, the Issuing Bank, the Agent, the
Co-Agents and the Lenders, as applicable, all rights,
Superpriority Claims, Liens, interests, powers, benefits,
privileges and advantages conferred or intended to be conferred
by this Agreement and the other Loan Documents.
SECTION 10.17.WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE GUARANTORS, THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE
AGENT, THE CO-AGENTS AND EACH LENDER HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this
Revolving Credit and Guaranty Agreement to be duly executed as
of the day and the year first, written.
BRADLEES STORES, INC.,
as debtor and as debtor-in-possession
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
GUARANTORS:
BRADLEES, INC.
BRADLEES ADMINISTRATIVE CO., INC.
DOSTRA REALTY CO., INC.
MAXIMEDIA SERVICES, INC.
NEW HORIZONS OF ▇▇▇▇▇▇▇▇, INC.
NEW HORIZONS OF WESTBURY, INC.
NEW HORIZONS OF YONKERS, INC.,
each as debtor and as debtor-in-possession
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
BANKBOSTON, N.A.,
as Administrative Agent, as Issuing Bank
and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ Floor
Boston, MA 02110
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON NEXT PAGE]
BANKBOSTON RETAIL FINANCE, INC.,
as Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Boston, MA 02109
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SIGNATURES CONTINUED ON NEXT PAGE]
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Co-Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
New York, NY 10036
[SIGNATURES CONTINUED ON NEXT PAGE]
CONGRESS FINANCIAL CORPORATION (NEW ENGLAND),
as Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
New York, NY 010036
[SIGNATURES CONTINUED ON NEXT PAGE]
AT&T COMMERCIAL FINANCE CORPORATION,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Address: ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Parsippany, NY 07054
[SIGNATURES CONTINUED ON NEXT PAGE]
FIRSTRUST BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Credit Officer
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ardmore, PA 19003
[SIGNATURES CONTINUED ON NEXT PAGE]
FLEET NATIONAL BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
MA0F0046
Boston, MA 02110
[SIGNATURES CONTINUED ON NEXT PAGE]
FREMONT FINANCIAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
Suite 600
Santa Monica, CA 90404
[SIGNATURES CONTINUED ON NEXT PAGE]
GREEN TREE FINANCIAL SERVICING CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, General Manager
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Suite 200
Alpharetta, GA 30202
[SIGNATURES CONTINUED ON NEXT PAGE]
▇▇▇▇▇▇ FINANCIAL, INC.
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
New York, NY 10017
[SIGNATURES CONTINUED ON NEXT PAGE]
NATIONAL CITY COMMERCIAL FINANCE, INC.
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: 1965 ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Suite 400
Cleveland, OH 44114
[SIGNATURES CONTINUED ON NEXT PAGE]
LASALLE NATIONAL BANK,
as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Loan Officer
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Chicago, IL 60603
ANNEX A TO
REVOLVING CREDIT
AND
GUARANTY AGREEMENT
-------------------
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of December 23, 1997
------------------------------
Name of Commitment Commitment
Lender Amount Percentage
------- ---------- ----------
BankBoston, N.A. $55,000,000 22%
The CIT Group/Business Credit, Inc. $25,000,000 10%
Congress Financial Corporation $40,000,000 16%
(New England)
First Trust Bank $10,000,000 4%
AT&T Commercial Finance Corporation $15,000,000 6%
Green Tree Financial $20,000,000 8%
▇▇▇▇▇▇ Financial, Inc. $20,000,000 8%
Fremont Financial Corporation $15,000,000 6%
Fleet National Bank $15,000,000 6%
National City Commercial Finance, Inc. $15,000,000 6%
LaSalle National Bank $20,000,000 8%
------------ ----
Total $250,000,000 100%
=====