EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
Dated as of May 22, 2002
-------------
FLEET NATIONAL BANK,
as Administrative Agent
ING CAPITAL LLC,
as Documentation Agent
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent
AND
THE LENDING INSTITUTIONS PARTY TO THIS AGREEMENT
AND
FLEET SECURITIES, INC.
and
FIRST UNION SECURITIES, INC. (d/b/a WACHOVIA SECURITIES),
as Co-Arrangers
TABLE OF CONTENTS
Section Title Page
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SECTION I - DEFINITIONS
1.1 Definitions................................................................ 1
1.2 Terms of General Application............................................... 21
SECTION II - DESCRIPTION OF CREDIT
2 The Credit Facilities...................................................... 22
2.1 The Loans.................................................................. 22
2.2 Records; Notes............................................................. 26
2.3 Conversion................................................................. 26
2.4 Notice and Manner of Borrowing or
Conversion of Loans........................................................ 27
2.5 Fees....................................................................... 28
2.5.1 Fee Letter................................................................. 28
2.5.2 Commitment Fee............................................................. 28
2.5.3 Utilization Fee............................................................ 29
2.6 Reduction of Total Commitment.............................................. 29
2.7 Increases in Total Commitment.............................................. 29
2.8 Duration of Interest Periods............................................... 29
2.9 Interest Rates and Payments of Interest.................................... 30
2.10 Protective Provisions...................................................... 32
2.10.1 Inability to Determine Adjusted LIBOR Rate................................. 32
2.10.2 Illegality................................................................. 32
2.10.3 Additional Costs, etc...................................................... 33
2.10.4 Claims by Affected Banks;
Borrower's Rights to Replace Banks......................................... 34
2.11 Capital Requirements....................................................... 34
2.12 Payments and Prepayments of the Loans...................................... 35
2.13 Method of Payment; Withholding Tax Exemption............................... 37
2.14 Default Rate Interest, etc................................................. 39
2.15 Payments Not at End of Interest Period..................................... 39
2.16 Computation of Interest and Fees; Maximum Interest......................... 40
2.17 Letters of Credit.......................................................... 41
2.18 Letter of Credit Fees...................................................... 42
2.19 Extension of Revolving Credit Maturity Date................................ 42
2.20 Interdependence of Borrower Affiliated Group............................... 45
2.21 Interest Rate Protection Agreements........................................ 46
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SECTION III - CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Revolving Credit Loan...................... 46
3.1.1 Loan Documents............................................................. 46
3.1.2 Legality of Transactions................................................... 46
3.1.3 Representations and Warranties............................................. 46
3.1.4 Performance, Consents, No Defaults, Litigation, etc........................ 46
3.1.5 Certified Copies of Charter Documents...................................... 47
3.1.6 Proof of Entity Action..................................................... 47
3.1.7 Incumbency Certificate..................................................... 47
3.1.8 Proceedings and Documents.................................................. 48
3.1.9 Good Standing, etc......................................................... 48
3.1.10 Fees....................................................................... 48
3.1.11 Legal Opinion.............................................................. 48
3.1.12 Financial Condition........................................................ 48
3.1.13 Security Documents; U.C.C. Search Reports;
Insurance; Patents, Trademarks and Copyrights.............................. 48
3.1.14 Solvency................................................................... 49
3.1.15 Payoff and Release Letter.................................................. 49
3.2 Conditions Precedent to all Loans and Letters of Credit.................... 49
SECTION IV - REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification............................................. 50
4.2 Entity Authority........................................................... 50
4.3 Valid Obligations.......................................................... 51
4.4 Consents or Approvals...................................................... 51
4.5 Title to Properties; Absence of Encumbrances............................... 51
4.6 Material Contracts......................................................... 52
4.7 Financial Statements....................................................... 52
4.8 Changes.................................................................... 52
4.9 Defaults................................................................... 52
4.10 Taxes...................................................................... 52
4.11 Litigation................................................................. 53
4.12 Subsidiaries............................................................... 53
4.13 Investment Company Act..................................................... 53
4.14 Compliance with ERISA...................................................... 53
4.15 Environmental Matters...................................................... 53
4.16 Disclosure................................................................. 53
4.17 Solvency................................................................... 54
4.18 Compliance with Statutes, etc.............................................. 54
4.19 Capitalization............................................................. 54
4.20 Labor Relations............................................................ 54
4.21 Certain Transactions....................................................... 55
4.22 Restrictions on the Borrower Affiliated Group.............................. 55
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4.23 Leases..................................................................... 55
4.24 Franchises, Patents, Copyrights, etc....................................... 55
4.25 Collateral................................................................. 56
4.26 Senior Debt................................................................ 56
SECTION V - AFFIRMATIVE COVENANTS
5.1 Financial Statements and other Reporting Requirements...................... 56
5.2 Conduct of Business........................................................ 58
5.3 Maintenance of Properties and Insurance.................................... 59
5.4 Taxes...................................................................... 60
5.5 Inspection by the Administrative Agent..................................... 60
5.6 Maintenance of Books and Records........................................... 60
5.7 Use of Proceeds............................................................ 61
5.8 Pension Plans.............................................................. 61
5.9 Fiscal Year................................................................ 61
5.10 Further Assurances......................................................... 61
SECTION VI - NEGATIVE COVENANTS
6.1 Indebtedness............................................................... 62
6.2 Sale and Leaseback......................................................... 63
6.3 Encumbrances............................................................... 63
6.4 Merger; Consolidation; Sale or Lease of Assets;
Acquisitions............................................................... 65
6.5 Minimum Fixed Charge Coverage Ratio........................................ 66
6.6 Maximum Cash Flow Leverage Ratio........................................... 66
6.6A Maximum Adjusted Cash Flow Leverage Ratio.................................. 66
6.6B Maximum Ratio of Consolidated Total Funded Debt
to EBITDA........................................................... 67
6.7 Maximum Total Funded Debt to
Total Capitalization Ratio........................................... 67
6.8 Maximum Capital Expenditures............................................... 67
6.9 Restricted Payments........................................................ 67
6.10 Investments................................................................ 67
6.11 ERISA...................................................................... 68
6.12 Transactions with Affiliates............................................... 68
6.13 Loans...................................................................... 68
6.14 Total Commitment........................................................... 68
6.15 No Amendments to Certain Documents; No New
Agreements Requiring Breach of Loan Documents.............................. 68
SECTION VII - DEFAULTS
7.1 Events of Default.......................................................... 69
7.2 Remedies................................................................... 72
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SECTION VIII - CONCERNING THE ADMINISTRATIVE
AGENT AND THE BANKS
8.1 Appointment and Authorization.............................................. 73
8.2 Administrative Agent and Affiliates........................................ 73
8.3 Future Advances............................................................ 74
8.4 Delinquent Bank............................................................ 74
8.5 Payments................................................................... 75
8.6 Action by Administrative Agent............................................. 76
8.7 Notification of Defaults and Events of Default............................. 76
8.8 Consultation with Experts.................................................. 76
8.9 Liability of Administrative Agent.......................................... 77
8.10 Indemnification............................................................ 77
8.11 Independent Credit Decision................................................ 78
8.12 Successor Administrative Agent............................................. 78
8.13 Other Agents............................................................... 78
SECTION IX - MISCELLANEOUS
9.1 Notices.................................................................... 79
9.2 Expenses................................................................... 80
9.3 Indemnification............................................................ 80
9.4 Set-Off.................................................................... 81
9.5 Term of Agreement.......................................................... 81
9.6 No Waivers................................................................. 81
9.7 Governing Law.............................................................. 81
9.8 Amendments, Waivers, etc................................................... 81
9.9 Binding Effect of Agreement................................................ 82
9.10 Successors and Assigns..................................................... 82
9.11 Counterparts............................................................... 84
9.12 Partial Invalidity......................................................... 84
9.13 Captions................................................................... 84
9.14 Waiver of Jury Trial....................................................... 84
9.15 Waiver of Special Damages.................................................. 84
9.16 Entire Agreement........................................................... 85
9.17 Replacement of Loan Documents, etc......................................... 85
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EXHIBITS AND SCHEDULES
EXHIBIT A- Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Disclosure
EXHIBIT E - Form of Opinion of Counsel to the Borrower and the Guarantors, Etc.
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Assignment and Assumption
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Pledge Agreement
SCHEDULES
SCHEDULE 1 - Commitments and Commitment Percentages
SCHEDULE 2 - Carryover LCs
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REVOLVING CREDIT AGREEMENT
Dated as of May 22, 2002
THIS REVOLVING CREDIT AGREEMENT is made as of May 22, 2002, by and
among ▇▇▇▇▇▇ & Noble, Inc., a Delaware corporation having its principal place of
business and chief executive office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Borrower"), the lending institutions listed on Schedule 1 to this Agreement and
the other lending institutions which may become parties hereto pursuant to
Section 9.10 (individually, a "Bank" and collectively, the "Banks"), Fleet
National Bank, as administrative agent for itself and each other Bank (in such
capacity, the "Administrative Agent"), ING Capital LLC, as documentation agent,
Wachovia Bank, National Association, as syndication agent, and Fleet Securities,
Inc. and First Union Securities, Inc. (d/b/a Wachovia Securities), as
co-arrangers (the "Co-Arrangers").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
SECTION I
DEFINITIONS
1.1. Definitions.
All capitalized terms used in this Agreement or in any other Loan
Document (as such terms are defined below), or in any certificate, report or
other document made or delivered pursuant to this Agreement (unless otherwise
defined therein), shall have the respective meanings assigned to them below:
Account and/or Accounts Receivable. As defined in Section 9-102(a)(2)
of the Uniform Commercial Code as in effect from time to time in the State of
New York.
Additional Subordinated Debt. See Section 6.1(h).
Adjusted LIBOR Rate. For any Interest Period, a rate per annum as
determined on the basis of the offered rates for deposits in Dollars, for a
period of time comparable to such Interest Period which appears on the Telerate
page 3750 as of 11:00 a.m. (London time) on the day that is two Business Days
preceding the first day of such Interest Period; provided, however, if the rate
described above does not appear on the Telerate page 3750 on any applicable
interest determination date, LIBOR shall be the rate (rounded upwards, if
necessary, to the nearest one hundred thousandth of a percentage point)
determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to such Interest Period which are offered to the
Administrative Agent by four major banks in the London interbank market at
approximately 11:00 a.m. (London time), on the day that is two Business Days
preceding the first day of such Interest Period as selected by
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the Administrative Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its Dollar deposit
offered rate to the Administrative Agent. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that date
will be determined on the basis of the rates quoted for loans in Dollars to
leading European banks for a period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00 a.m. (New York
City time), on the day that is two Business Days preceding the first day of such
Interest Period. In the event that the Administrative Agent is unable to obtain
any such quotation as provided above, it will be deemed that the Adjusted LIBOR
Rate cannot be determined. The foregoing sentence shall not limit the ability of
the Administrative Agent and the Required Banks to otherwise determine that the
Adjusted LIBOR Rate cannot be determined pursuant to Section 2.10.1. In the
event that the Board of Governors of the Federal Reserve System shall impose a
Reserve Percentage with respect to LIBOR deposits of the Administrative Agent,
then for any period during which such Reserve Percentage shall apply, the
Adjusted LIBOR Rate shall be equal to the amount determined above divided by an
amount equal to one minus the Reserve Percentage.
Administrative Agent. Fleet National Bank, in its capacity as
Administrative Agent for the Banks under this Agreement and the other Loan
Documents, including (where the context so admits) any other Person or Persons
succeeding to the functions of the Administrative Agent pursuant to this
Agreement and the other Loan Documents.
Affected Bank. Any Bank that has suffered a loss or otherwise has a
claim for compensation from the Borrower or a right to be excused from
performing an obligation under any of Sections 2.10.2, 2.10.3, 2.11 or 2.13.
Affiliate. With reference to any Person, (i) any director or officer of
that Person, (ii) any other Person controlling, controlled by or under direct or
indirect common control with that Person (and if that Person is an individual,
any member of the immediate family (including parents, siblings, spouse,
children, stepchildren, nephews, nieces and grandchildren) of such individual
and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any such
member or trust), (iii) any other Person directly or indirectly holding 10% or
more of any class of the capital stock or other equity interests (including
options, warrants, convertible securities and similar rights) of that Person,
(iv) any other Person 10% or more of any class of whose capital stock or other
equity interests (including options, warrants, convertible securities and
similar rights) is held directly or indirectly by that Person, and (v) any other
Person that possesses, directly or indirectly, power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of that
Person.
Affiliated Subsidiaries. Collectively, (i) GameStop Corp., GameStop,
Inc., ▇▇▇▇▇▇▇▇.▇▇▇, inc., Sunrise Publications, Inc., Babbages Etc. LLC,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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inc., ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc (together with ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc., "B&▇.▇▇▇"),
Calendar Club L.L.C., ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., West Egg Communications LLC, enews,
inc., (ii) each other less than wholly-owned Subsidiary of the Borrower formed
or acquired after the Closing Date, and (iii) in the event that the Borrower
acquires ▇▇▇▇▇▇ & ▇▇▇▇▇ College Bookstores, Inc. ("B&N College") after the
Closing Date, B&N College.
Agreement. This Revolving Credit Agreement, as the same may be renewed,
extended, modified, supplemented or amended from time to time.
Applicable Authority. Any competent court or any governmental or other
regulatory body or official charged with the administration or the
interpretation of any law, treaty, statute, rule or regulation.
Applicable Base Rate Margin. The Applicable Base Rate Margin is set
forth in Section 2.9(c).
Applicable LIBOR Margin. The Applicable LIBOR Margin is set forth in
Section 2.9(c).
Arranger. Fleet Securities, Inc. First Union Securities, Inc. (d/b/a
Wachovia Securities)is a co-arranger with the Arranger.
Assignment and Assumption. See Section 9.10(ii).
Assuming Bank. See Section 2.19(c).
Availability. As at the date of determination, an amount equal to (a)
the Total Commitment then in effect, minus (b) the aggregate principal amount of
all Revolving Credit Loans then outstanding, minus (c) the aggregate amount of
all Swingline Loans then outstanding, minus (d) the aggregate Stated Amount of
Letters of Credit outstanding, minus (e) the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit (unless included as
Revolving Credit Loans under clause (b) above).
Banks. Collectively, (i) Fleet National Bank, and (ii) each of the
other Persons which may provide additional commitments and become a party to
this Agreement as a Bank hereunder, as shown on Schedule 1 as it may be updated
by the Administrative Agent from time to time.
B&N License. See Section 4.24.
Base Rate. The greater of (a) the rate of interest publicly announced
from time to time by the Administrative Agent at its head office as its Base
Rate, and (b) the Federal Funds Effective Rate plus 1/2 of 1% per annum
(rounded upwards, if necessary, to the next 1/16 of 1%).
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Base Rate Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Base Rate.
Borrower. See preamble.
Borrower Affiliated Group. Collectively, (i) the Borrower and (ii) each
of the Subsidiaries of the Borrower in existence from time to time other than
the Affiliated Subsidiaries and the Inactive Subsidiaries.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts and in New York, New York are open for the conduct of a
substantial part of their commercial banking business; and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, LIBOR Loans, any day that is a Business Day described in clause (i)
and that is also a day on which trading takes place between banks in United
States dollar deposits in the London interbank market.
Capital Expenditures. To the extent capitalized in accordance with
GAAP, any expenditure for fixed assets (both tangible and intangible), including
assets being constructed (whether or not completed), leasehold improvements,
capital leases under GAAP, installment purchases of machinery and equipment,
acquisitions of real estate and other similar expenditures including (i) in the
case of a purchase, the entire purchase price, whether or not paid during the
fiscal period in question, (ii) in the case of a Capitalized Lease, the
capitalized amount thereof (determined in accordance with GAAP) and (iii)
without duplication, expenditures in or from any construction-in-progress
account of any member of the Borrower Affiliated Group.
Capitalized Lease. Any lease of real property by a member of the
Borrower Affiliated Group as lessee which is shown as a liability on the
Consolidated balance sheet of the Borrower in accordance with GAAP.
Carryover LCs. Collectively, the standby letters of credit described on
Schedule 2 hereto issued by The Chase Manhattan Bank (now known as JPMorgan
Chase Bank) for the account of the Borrower.
Cash Flow Leverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) Consolidated Senior Funded Debt
on the last day of such period to (b) Consolidated EBITDA for such period.
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may from time to time be supplemented or
amended and remain in effect.
Change in Law. Any future applicable law or any change to any present
applicable law (which, in each case, includes treaties, statutes, rules and
regulations thereunder and
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the interpretation and application thereof by any Applicable Authority), or any
change in the interpretation or application of any present applicable law by any
Applicable Authority, and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Administrative Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law).
Change of Control. The occurrence of any of the following: (i) any
Person or "group" (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended) of Persons acting in concert as a partnership
or other group (other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, his spouse, lineal descendants and
trusts for the exclusive benefit of any such individuals or the executor or
administrator of the estate or legal representative of any such individuals or
any entity controlled by any of them) shall, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases or otherwise, have
become, after the date hereof, the "beneficial owner" (within the meaning of
such term under Rule 13d-3 under the Exchange Act) of securities of the Borrower
representing 40% or more of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors; or
(ii) during any period of 24 consecutive months, the board of directors of the
Borrower shall cease to consist of a majority of the individuals who constituted
the board of directors as of the first day of such 24-month period or who shall
have become a member thereof subsequent to the date hereof after having been
nominated, or otherwise approved in writing, by at least a majority of
individuals who constituted the board of directors of the Borrower as of the
first day of such 24-month period or whose election or nomination were so
approved.
Closing Date. May 22, 2002 or such other mutually agreeable date on
which all of the conditions set forth in Section 3.1 have been satisfied and any
Loans are to be made hereunder.
Co-Arrangers. See preamble.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
Collateral. Collectively, all of the agreements, instruments (including
promissory notes and the rights to payment thereunder), contracts, assets,
Accounts, Accounts Receivable, patents, trademarks, other Intellectual Property
Rights, capital stock (or other equity interests) and all of the income,
proceeds and products of any thereof, under or in respect of which the
Administrative Agent or any Bank or any of the nominees, agents or legal
representatives of the Administrative Agent or any Bank shall have at the
relevant time of reference to the term "Collateral," any rights or interest as
security for the payment or performance of all or any part of the Obligations.
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Commitment. At any time and with respect to any Bank, the amount set
forth for such Bank on Schedule 1 under the heading "Commitments," which amount
includes, without duplication, the aggregate of (a) the maximum amount of
Revolving Credit Loans that such Bank shall be committed to make to the
Borrower, (b) the maximum amount of Swingline Loans that such Bank shall be
committed to make to, or to participate in, in favor of the Borrower, and (c)
the maximum Stated Amount of Letters of Credit which such Bank shall be
committed to issue to, or to participate in, in favor of the Borrower. Schedule
1 shall be updated by the Administrative Agent from time to time to reflect any
Commitment or portion thereof which a Bank shall assume or relinquish upon an
assignment pursuant to Section 9.10(ii).
Commitment Fee. See Section 2.5.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate Total
Commitment. Schedule 1 shall be updated by the Administrative Agent from time to
time to reflect any changes to the Commitment Percentages.
Consenting Bank. See Section 2.19(b).
Consolidated. The term "Consolidated" shall have the meaning ascribed
to such term under GAAP, provided that, in relation to the Borrower Affiliated
Group, the Affiliated Subsidiaries shall be excluded from any Consolidated
financial tests, whether or not they would be Consolidated under GAAP.
Consolidated Rent Expense. For any period, the aggregate rental
expenses payable by the Borrower Affiliated Group on a Consolidated basis for
such period (including percentage rent) under any operating Lease classified as
such under GAAP (including on a pro forma basis for the applicable period any
such operating Lease acquired by a member of the Borrower Affiliated Group in
connection with a Permitted Acquisition or a Qualified Investment described in
clause (viii) of the definition thereof) but not including any amount included
in the definition of "Consolidated Total Interest Expense."
Consolidated Senior Funded Debt. As at any date of determination, on a
Consolidated basis for the Borrower Affiliated Group, and without duplication,
the sum of (i) the Loans outstanding on such date, plus (ii) the aggregate
amount of any other Indebtedness for borrowed money (including Capital Leases)
outstanding on such date (excluding the Senior Subordinated Debt), plus (iii)
the Stated Amount of all outstanding Letters of Credit, plus (iv) all Guaranties
of Indebtedness for borrowed money or Capital Leases of the Borrower Affiliated
Group outstanding on such date.
Consolidated Tangible Net Worth. As at any date of determination,
Stockholders' Equity less any intangible assets, with intangible assets defined
as goodwill, patents, trademarks, tradenames, lease rights, capitalized
pre-opening costs, franchises, organization costs and property rights.
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Consolidated Total Funded Debt to Total Capitalization. At any date of
determination, the ratio of (i) Consolidated Total Funded Debt on such date, to
(ii) Total Capitalization on such date.
Consolidated Total Funded Debt. As at any date of determination, on a
Consolidated basis for the Borrower Affiliated Group, and without duplication,
the sum of (i) the aggregate amount of Indebtedness for borrowed money
outstanding on such date (including, without limitation, the Loans outstanding
on such date), plus (ii) the Stated Amount of all outstanding Letters of Credit,
plus (iii) all Guaranties of Indebtedness for borrowed money or Capitalized
Leases of the Borrower Affiliated Group outstanding on such date.
Consolidated Total Interest Expense. For any period, all interest and
all amortization of debt discount and expense (including commitment fees, letter
of credit fees, balance deficiency fees and similar expenses) on all
Indebtedness of the Borrower Affiliated Group on a Consolidated basis (including
outstanding letters of credit and including, in connection with any Permitted
Acquisition or any Qualified Investment described in clause (viii) of the
definition thereof which is financed, the Indebtedness incurred by a member of
the Borrower Affiliated Group on a pro forma basis for the applicable period),
paid or required to be paid, all as determined in accordance with GAAP, together
with all interest expense of the Borrower Affiliated Group on a Consolidated
basis under Synthetic Leases. Computations of interest on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated at the rate in
effect on the date of any determination.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower or any other
member of the Borrower Affiliated Group, are treated as a single employer under
Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.
Covered Taxes. See Section 2.13(a)
Cumulative Excess Cash Flow. On any date of determination, the Excess
Cash Flow of the Borrower for the period commencing on February 3, 2002 and
ending on the last day of the most recently completed fiscal quarter of the
Borrower.
Default. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
Delinquent Bank. See Section 8.4.
Dollar or $. Dollars in lawful currency of the United States of
America.
Domestic Subsidiary. Any Subsidiary of the Borrower organized under the
laws of any jurisdiction of the United States of America.
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EBITDA. In relation to the Borrower Affiliated Group on a Consolidated
basis for any period, an amount equal to (a) the net income of the Borrower
Affiliated Group on a Consolidated basis after deduction of all expenses, taxes
and other proper charges, determined in accordance with GAAP for such period,
but, in determining such Consolidated net income, any GAAP extraordinary gains
shall be excluded from such calculation, plus (b) the following to the extent
deducted in computing such Consolidated net income for such period: (i)
Consolidated Total Interest Expense for such period, (ii) Consolidated taxes on
income for such period, (iii) Consolidated depreciation for such period, (iv)
Consolidated amortization for such period, (v) extraordinary non-cash losses
and, without duplication, nonrecurring non-cash losses, in each case to the
extent such losses have not been and will not become cash losses in a later
fiscal period, (vi) Net Proceeds to the Borrower Affiliated Group during such
period upon exercise of any rights in respect of Equity Securities issued to
directors, officers or employees of any member of the Borrower Affiliated Group,
and (vii) in connection with any Permitted Acquisition or any Qualified
Investment described in clause (viii) of the definition thereof during such
period, the EBITDA of the acquired Person (so long as such Person is a member of
the Borrower Affiliated Group and is not an Affiliated Subsidiary) for such
period.
EBITDAR. In relation to the Borrower Affiliated Group for any period,
an amount equal to EBITDA for such period, plus Consolidated Rent Expense for
such period.
Eligible Assignee. Any of:
(a) a commercial bank or other financial institution organized
under the laws of the United States, or any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000;
(b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, or the
central bank of any country which is a member of the OECD, and having total
assets in excess of $5,000,000,000 and a combined capital and surplus of at
least $1,000,000,000;
(c) any Bank, any successor to any Bank, and any Affiliate of
a Bank, so long as any such successor or Affiliate meet the requirements of
clause (a) or (b) above; and
(d) any other Person consented to in writing by the
Administrative Agent and the Borrower;
provided, in each case, that such bank (i) is acting through a
branch or agency located in the United States and (ii) has delivered to the
Administrative Agent, on the date on which the Assignment and Assumption to
which such Eligible Assignee is a party becomes effective, the forms referred to
in Section 2.13(b) hereof.
-8-
Encumbrances. See Section 6.3.
Environmental Claims. All claims, however asserted, alleging potential
liability or responsibility for violation of any Environmental Laws or for
release of Hazardous Materials or injury to the environment.
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, ordinances,
policies and or common law (whether now existing or hereafter enacted or
promulgated), of all federal, state, local or other governmental authorities,
agencies, commissions, boards, bureaus or departments which may now or hereafter
have jurisdiction over the Borrower, any other member of the Borrower Affiliated
Group or any landlord under any real estate Lease under which the Borrower or
such other member of the Borrower Affiliated Group is a tenant, and all
applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances, pollutants or
contaminants whether solid, liquid or gaseous in nature, into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
Equity Securities. As to any Person, any shares of any class of Capital
Stock or other equity interests of such Person, voting or non-voting, or any
options, warrants or similar rights with respect to any such shares or other
equity interests.
Event of Default. Any event described in Section 7.1.
Excess Cash Flow. In relation to the Borrower Affiliated Group on a
Consolidated basis for any period, the EBITDA of the Borrower Affiliated Group
for such period, minus (i) Capital Expenditures paid in cash during such period,
(ii) cash taxes paid in such period, and (iii) Interest Expense paid in such
period.
Executive Officer. Any of the chief executive officer, president, chief
financial officer, treasurer or any other financial officer and any other
officer having substantially the same authority and responsibility of any of the
foregoing officers.
Extension Date. May 22, 2003.
-9-
Fair Market Value. With respect to any Equity Security of Gamestop
Corp., the price a seller of such Equity Security would have received for such
Equity Security if such seller sold the Equity Security at an equivalent price
on a per security basis to the price paid by a buyer in the most recent
transaction completed and contemplated by Section 2.12(c)(2), so long as such
transaction was an arm's length transaction between an informed and willing
buyer under no compulsion to buy and informed and willing seller under no
compulsion to sell. In the event the Fair Market Value cannot be determined in
accordance with the previous sentence, the Fair Market Value of such Equity
Security shall be determined by taking the arithmetic average of the reported
last sales prices of such Equity Security for the 20 consecutive trading days
before the date of determination of the Fair Market Value. The reported last
sales price of such Equity Security for each trading day shall be (i) the
reported last sales price as reported on the New York Stock Exchange or (ii) if
the Equity Security is not listed on the New York Stock Exchange at such time,
in the principal consolidated or composite transaction reporting system on the
principal national securities exchange on which the Equity Security is listed or
admitted to trading.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
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 so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
Fee Letter. The letter agreement dated as of the date hereof among
Fleet National Bank, Fleet Securities, Inc., and the Borrower.
Fixed Charge Coverage Ratio. As of any date of calculation, for the
twelve-month period then ended, the ratio of (a) an amount equal to EBITDAR for
such period, to (b) the sum of Consolidated Total Interest Expense plus
Consolidated Rent Expense for such period.
Foreign Bank. See Section 2.13(b).
Foreign Subsidiary. Any Subsidiary of the Borrower organized under the
laws of a jurisdiction outside the United States of America.
GAAP. Generally accepted accounting principles in the United States of
America, consistently applied.
Guaranties. As applied to any Person, without duplication, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on such Person's Consolidated
balance sheet, including any obligation to furnish funds, directly or indirectly
(whether by virtue of partnership
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arrangements, by agreement to keep-well or otherwise), through the purchase of
goods, supplies or services, or by way of stock purchase, capital contribution,
advance or loan, or to enter into a contract for any of the foregoing, for the
purpose of payment of obligations of any other Person, but excluding
endorsements for collection or deposit in the ordinary course of business.
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, CERCLA, and any applicable
local statutes and the regulations promulgated thereunder; (iii) which is toxic,
explosive, corrosive, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is or becomes regulated by any governmental authority,
agency, department, commission, board or instrumentality of any foreign country,
the United States, any state of the United States, or any political subdivision
thereof to the extent any of the foregoing has or had jurisdiction over the
Borrower or any other member of the Borrower Affiliated Group or any Real
Property leased by the Borrower or any other member of the Borrower Affiliated
Group; or (iv) without limitation, which contains gasoline, diesel fuel or other
petroleum products, asbestos, asbestos containing materials ("ACM"),
polychlorinated biphenyls ("PCB's") or radioactive material.
Inactive Subsidiaries. Collectively, (i) Marboro Books Corp., (ii) B&N
Sub Corp., (iii) B&N Member Corp. and (iv) Vendamerica, Inc.
Income Taxes. Any franchise taxes, net income taxes or any other taxes
imposed on the net income of any Bank or the Administrative Agent, including
branch profits tax, minimum tax and other taxes imposed in lieu of net income
tax.
Increase. See Section 2.7.
Increase Conditions. The satisfaction of each of the following:
(a) The Borrower first shall have offered the applicable
Increase to existing Banks, with each Bank having the right, but not the
obligation, to commit to at least its pro rata percentage of the proposed
Increase and one or more such Bank(s) shall have signed an instrument agreeing
to such increased Commitment(s), and if no such Bank or Banks commit to the full
amount of the proposed Increase, the Borrower then shall have offered such
Increase (or the remaining portion thereof) to a third party financial
institution or institutions acceptable to the Administrative Agent and each such
institution shall have signed a counterpart signature page becoming a party to
this Agreement and a "Bank" hereunder; and
(b) no Default or Event of Default shall have occurred and be
continuing (both before and after giving effect to the Increase).
-11-
Indebtedness. As applied to any Person (but without duplication), (i)
all obligations for borrowed money or other extensions of credit whether secured
or unsecured, absolute or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or Guaranties issued
for the account of or on behalf of such Person, and all obligations representing
the deferred purchase price of property, other than accounts payable arising,
and accrued expenses incurred, in the ordinary course of business, (ii) all
obligations evidenced by bonds, notes, debentures or other similar instruments,
(iii) all obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by such Person, whether or not the
obligations secured thereby shall have been assumed, (iv) all obligations
arising under Capitalized Leases and Synthetic Leases, (v) all Guaranties, (vi)
all obligations to redeem or repurchase capital stock or other equity of any
Person if such redemptions or repurchases are required to occur prior to the
Revolving Credit Maturity Date, and (vii) all obligations that are immediately
due and payable out of the proceeds of or production from property now or
hereafter owned or acquired by such Person.
Initial Financial Statements. See Section 4.7.
Insolvent or Insolvency. The occurrence of one or more of the following
events with respect to a Person: death; dissolution; termination of existence;
insolvency within the meaning of the United States Bankruptcy Code or other
foreign or domestic applicable statutes; such Person's inability to pay its
debts as they come due; appointment of a receiver of any part of the property
of, execution of a trust mortgage or an assignment for the benefit of creditors
by, or the entry of an order for relief or the filing of a petition in
bankruptcy or the commencement of any proceedings under any bankruptcy or
insolvency laws, or any laws relating to the relief of debtors, readjustment of
indebtedness or reorganization of debtors, or the offering as debtor of a plan
to creditors for composition or extension, except for an involuntary proceeding
as debtor commenced against such Person which is dismissed within 60 days after
the commencement thereof without the entry or an order for relief or the
appointment of a trustee.
Intellectual Property Rights. See Section 4.24.
Interest Period. With respect to each LIBOR Loan, the period commencing
on the date of the making or continuation of or conversion to such LIBOR Loan
and ending one week or one, two, three or six months thereafter, subject to
availability, as the Borrower may elect in the applicable Notice of Borrowing or
Conversion; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (c) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day;
-12-
(b) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Business Day in the appropriate subsequent
calendar month;
(c) any Interest Period applicable to Revolving Credit Loans
that would otherwise end after the Revolving Credit Maturity Date shall end on
said Revolving Credit Maturity Date; and
(d) notwithstanding clause (c) above, no Interest Period shall
have a duration of less than one week; and if any Interest Period would be for a
shorter period, such Loan shall not be available hereunder for such period.
Interest Rate Protection Agreement. As applied to any Person, a swap,
cap, collar, or option agreement or similar arrangement between such Person and
one or more financial institutions providing for the transfer or mitigation of
interest rate or other risks either generally or under specific contingencies
(including, without limitation, any such agreement or arrangement existing with
any Bank prior to the Closing Date).
Investment. As applied to any Person, (i) the purchase or acquisition
of any share of capital stock, partnership interest, limited liability company
membership interest, evidence of indebtedness or other equity security of any
other Person, (ii) any loan, advance or extension of credit to, or contribution
to the capital of (including in exchange for any Equity Securities), any other
Person (excluding any such loan, advance or extension of credit having a term
not exceeding 150 days representing the purchase price of inventory or supplies
sold by such Person in the ordinary course of business), (iii) any real estate
held for sale or investment, (iv) any commodities futures contracts held other
than in connection with bona fide hedging transactions, (v) any other investment
in any other Person, (vi) the making of any commitment or acquisition of any
option to perform any of the acts specified in clauses (i) through (v) of this
definition, and (vii) the entering into of any Interest Rate Protection
Agreement.
Issuing Bank. Fleet National Bank in its capacity as the issuer of
Letters of Credit hereunder, together with any such other Bank as may, with the
written consent of the Borrower and the Administrative Agent, become an Issuing
Bank hereunder.
L/C Availability. As of any date, an amount equal to (a) or (b) below,
whichever is less:
(a) the Maximum L/C Sublimit minus the Stated Amount of all
Letters of Credit outstanding (including any requested Letters of Credit), minus
the aggregate amount of all unreimbursed draws under outstanding Letters of
Credit; or
(b) the Total Commitment minus the outstanding principal
amount of the Revolving Credit Loans then outstanding, minus the outstanding
principal amount of the Swingline Loans then outstanding, minus the Stated
Amount of all Letters of Credit
-13-
outstanding (including any requested Letters of Credit), minus the aggregate
amount of all unreimbursed draws under outstanding Letters of Credit.
Leases or Lease. See Section 4.23.
Letters of Credit. Letters of credit in the form customarily issued by
the Issuing Bank as standby Letters of Credit or documentary Letters of Credit,
as the case may be, issued or to be issued for the account of the Borrower by
the Issuing Bank, under the joint responsibilities of the Banks, upon the terms
and subject to the conditions contained in this Agreement.
LIBOR Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Adjusted LIBOR Rate.
Loan. A Revolving Credit Loan or Swingline Loan made to the Borrower by
any Bank pursuant to Section II of this Agreement, and "Loans" means all such
Revolving Credit Loans and Swingline Loans, collectively.
Loan Account. The account or accounts on the books of the
Administrative Agent in which will be recorded Loans and advances (including
issued and outstanding Letters of Credit) made by the Banks to the Borrower
pursuant to this Agreement, payments made on such Loans and other appropriate
debits and credits as provided by this Agreement.
Loan Documents. Collectively, this Agreement (including, without
limitation, the agreements and other instruments listed or described in Section
III), the Notes, if any, the Letters of Credit (and related documentation and
agreements, including any letter of credit application), the Security
Agreements, the Patent and Trademark Security Agreements, the Pledge Agreements,
the Subsidiary Guaranty, all other Subsidiary Security Documents and other
Security Documents, the Fee Letter and the Solvency Certificates, together with
all agreements and other instruments contemplated thereby (other than the
Interest Rate Protection Agreements), all certificates delivered in connection
therewith from time to time and all schedules, exhibits and annexes thereto, as
any of the foregoing may from time to time be amended and in effect.
Mandatory Prepayments. See Section 2.12(c).
Material Adverse Effect. Any (a) material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower Affiliated Group taken as a whole, (b)
material impairment of the ability of the Borrower Affiliated Group, taken as a
whole, to perform their obligations under the Loan Documents, or (c) material
impairment of the Administrative Agent's or the Banks' ability to enforce the
Obligations.
Maximum L/C Sublimit. $100,000,000.
-14-
Minimum Specified Percentage. See Section 2.19(a).
Net Proceeds. With respect to the sale, transfer or other disposition
by the Borrower or any other member of the Borrower Affiliated Group of any
asset or group of assets (other than inventory wholly in the ordinary course of
business, but including, without limitation, any sale (whether through a public
offering, private placement or otherwise) of Equity Securities to any Person not
a member of the Borrower Affiliated Group), means the amount of cash (freely
convertible into Dollars) received by the Borrower or such other member of the
Borrower Affiliated Group, from such sale or other disposition (including,
without limitation, any tax refund or tax benefit resulting from a loss on such
sale or other disposition as and when such tax benefit is realized), after (i)
provision for all income or other taxes of the Borrower Affiliated Group
measured by or resulting from such sale or other disposition, (ii) payment of
all reasonable third party brokerage commissions and other reasonable
out-of-pocket fees and expenses to third parties related to such sale or other
disposition, and (iii) deduction of appropriate amounts to be provided by the
Borrower or such other member of the Borrower Affiliated Group as a reserve, in
accordance with GAAP, against any liabilities associated with such sale,
transfer or other disposition and retained by the Borrower or such other member
of the Borrower Affiliated Group after such sale or other disposition.
Non-Consenting Bank. See Section 2.19(b).
Notes. Collectively, the promissory notes, if any, delivered by the
Borrower upon the request of any Banks or the Swingline Lender pursuant to
Section 2.2(d).
Notice of Borrowing or Conversion. See Section 2.4(a).
Obligations. Any and all obligations of the Borrower Affiliated Group
to the Administrative Agent, any Bank, or the Arranger under the Loan Documents
of every kind and description (including obligations in respect of Letters of
Credit, the Fee Letter and fees under each thereof), direct or indirect,
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising, regardless of how they arise or by what agreement or
instrument, if any, and including obligations to perform acts and refrain from
taking action as well as obligations to pay money. The Obligations shall also
include any obligations of any member of the Borrower Affiliated Group to any
Bank in connection with any Interest Rate Protection Agreement.
Participant. See Section 9.10(i).
Patent and Trademark Security Agreements. The Patent and Trademark
Security Agreements dated as of the date hereof and executed and delivered by
the Borrower and each Domestic Subsidiary who is a member of the Borrower
Affiliated Group to the Administrative Agent for the ratable benefit of the
Banks.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
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PCB. See definition of Hazardous Material.
Permitted Acquisition. Any acquisition by the Borrower or any other
member of the Borrower Affiliated Group that meets each of the following
criteria: (i) the capital stock (or other equity interests) or assets acquired
in such acquisition relates to a line of business similar or complementary to
the business in which the Borrower Affiliated Group is engaged on the Closing
Date, (ii) the board of directors and, if required by applicable law, the
shareholders or the equivalent thereof, of such other Person has approved such
acquisition, it being the intent that the acquisition be non-hostile in nature,
(iii) in the case of a merger between the Borrower and another Person, the
Borrower shall be the surviving entity, or in the case of a merger between
another Person and a member of the Borrower Affiliated Group (other than the
Borrower), upon consummation of such merger, the surviving entity shall be a
direct or indirect Subsidiary of the Borrower, (iv) the Borrower shall provide
the Administrative Agent with written notice of each such acquisition as soon as
practicable, but in no event more than 5 days after the closing thereof and such
information relating thereto as the Administrative Agent may reasonably request
promptly after the request therefor, (v) no Default or Event of Default shall
exist, in each case both before and after giving effect to such acquisition,
(vi) the properties and assets acquired by the Borrower or other member of the
Borrower Affiliated Group in connection with such proposed acquisition shall be
free from all liens, charges and encumbrances whatsoever, other than Permitted
Encumbrances, (vii) as soon as practicable, but in no event more than 10
Business Days after the consummation of an acquisition (x) which results in a
new, direct or indirect wholly-owned Domestic Subsidiary of the Borrower, the
Administrative Agent shall have a valid, perfected, first-priority security
interest in the Accounts Receivable and Intellectual Property Rights and related
assets of the Person being acquired (consistent with the security interests in
favor of the Administrative Agent on the Closing Date) by the Borrower or other
member of the Borrower Affiliated Group (subject to Permitted Encumbrances) and
such Domestic Subsidiary shall become a party to the Subsidiary Security
Documents, and (y) which is an acquisition of the Equity Securities in another
Person, the Administrative Agent shall have a valid, perfected, first-priority
pledge of the Equity Securities so acquired pursuant to a Pledge Agreement,
provided that in connection with acquisition of minority interests in any one or
more Persons, the Borrower Affiliated Group shall not be required to pledge the
Equity Securities of any such Person or Persons having total assets of less than
$25,000,000 in the aggregate, and (viii) the aggregate consideration (including
all cash and non-cash consideration and any assumption of Indebtedness, but
excluding any Equity Securities of the Borrower) for such acquisitions which do
not constitute Investments, together with all Investments made pursuant to
clause (viii) of the definition of Qualified Investments (but not any other
provision of such definition), from and after the Closing Date shall not exceed,
when made, the sum of $225,000,000 plus 50% of the Borrower's Cumulative Excess
Cash Flow.
Permitted Encumbrances. See Section 6.3.
Person or person. An individual, a company, a corporation, an
association, a partnership, a joint venture, a limited liability company or
partnership, an unincorporated
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trade or business enterprise, a trust, an estate, or a government (national,
regional or local) or an agency, instrumentality or official thereof.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower, any member
of the Borrower Affiliated Group or any member of the Controlled Group for
employees of the Borrower or any member of the Controlled Group or (ii) if such
Plan is established or maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer makes contributions
and to which the Borrower or any member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
Plan years made contributions.
Pledge Agreements. (a) The Pledge Agreements dated as of the date
hereof and executed and delivered by each of the Borrower and certain of its
Subsidiaries to the Administrative Agent, for the ratable benefit of the Banks
and the Administrative Agent, pursuant to which, without limitation, (i) all of
the issued and outstanding capital stock of all Subsidiaries (or, in the case of
Foreign Subsidiaries, 65%), other than Affiliated Subsidiaries, is pledged to
the Administrative Agent, and (ii) all of the issued and outstanding capital
stock of the Affiliated Subsidiaries and the capital stock or other equity of
minority-owned Persons, in each case which is directly owned by the Borrower or
any other member of the Borrower Affiliated Group, is pledged to the
Administrative Agent, and (b) all Pledge Agreements to be delivered by the
Borrower from time to time in accordance with Section 5.2(d) and the definition
of Permitted Acquisitions.
Prohibited Transaction. A transaction prohibited by Section 4975 of the
Code or Section 406 of ERISA, for which no statutory or administrative exemption
applies.
Qualified Investments. As applied to any member of the Borrower
Affiliated Group, investments in (i) notes, bonds or other obligations of the
United States of America or any agency thereof that as to principal and interest
constitute direct obligations of or are guaranteed by the United States of
America, (ii) certificates of deposit or other deposit instruments or accounts
of banks or trust companies organized under the laws of the United States or any
state thereof that have capital and surplus of at least $100,000,000, (iii)
commercial paper that is rated not less than prime-one or A-1 or their
equivalents by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or their successors, (iv) any repurchase agreement secured by any
one or more of the foregoing, (v) Investments in wholly-owned Subsidiaries
(other than any Affiliated Subsidiary); provided, however, that the aggregate
amount of Investments in Foreign Subsidiaries may not at any time exceed 10% of
the Borrower's Consolidated Tangible Net Worth determined as of the end of the
most recently completed fiscal quarter of the Borrower, (vi) loans permitted by
Section 6.13, (vii) Investments described in clause (ii) of the definition of
Investments after the date hereof in B&▇.▇▇▇ in an aggregate amount outstanding
not to exceed when made the sum of $75,000,000 plus 10% of the Borrower's
Cumulative Excess Cash Flow; provided, however that, in no event shall the
aggregate outstanding amount of such Investments exceed $100,000,000
-17-
at any time, (viii) in addition to all of the foregoing, Investments described
in clause (i) of the definition of Investments in connection with Permitted
Acquisitions; provided, however, that the aggregate consideration (including all
cash and non-cash consideration and any assumption of Indebtedness, but
excluding any Equity Securities of the Borrower) for such Investments, together
with all such consideration paid in connection with Permitted Acquisitions not
constituting Investments, from and after the Closing Date shall not exceed, when
made, the sum of $225,000,000 plus 50% of the Borrower's Cumulative Excess Cash
Flow, (ix) Investments in Affiliated Subsidiaries and Investments in other
minority-owned Persons made prior to the date hereof and disclosed on Exhibit D
hereto, and (x) Interest Rate Protection Agreements for an aggregate notional
amount not to exceed $300,000,000 at any time outstanding.
Rate Period. The period beginning on the third Business Day following
delivery to the Administrative Agent of the annual or quarterly financial
statements required to be delivered pursuant to Section 5.1(a) or Section 5.1(b)
and ending on the second Business Day after the day on which the next such
quarterly (or annual, as applicable) financial statements are delivered to the
Administrative Agent.
Real Property or Real Properties. Collectively, those parcels of land
together with the improvements now or hereafter located thereon which are owned
by any member of the Borrower Affiliated Group.
Reportable Event. With respect to any Plan, a reportable event as
described in Section 4043(c) of ERISA for which notice to the PBGC has not been
waived.
Required Banks. Any two or more Banks whose aggregate Commitment
Percentages constitute more than 50% at the relevant time of reference, or if
the Commitments have been terminated, any two or more Banks whose aggregate
Loans and Letters of Credit outstanding constitute more than 50% of the
aggregate Loans and Letters of Credit outstanding at the relevant time of
reference.
Reserve Percentage. For any Interest Period, the rate (expressed as a
decimal) applicable to the Administrative Agent during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency or marginal
reserve requirement) of the Administrative Agent with respect to "Eurocurrency
liabilities" as that term is defined under such regulations.
Restricted Payment. (i) Any cash or property dividend, distribution or
payment, direct or indirect, by the Borrower or any of its Subsidiaries in
respect of its capital stock or other equity interests, to any Person who now
holds, or who in the future holds, an equity interest in the Borrower or any of
its Subsidiaries, whether evidenced by a security or not, other than regular
compensation and bonuses paid to employees of the Borrower and its Subsidiaries
in the ordinary course of business and consistent with past practices, and other
than dividends payable solely in shares of any class of capital stock (or other
equity), (ii) any payment on account of the purchase, redemption, retirement or
other
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acquisition for value of any capital stock of the Borrower or its Subsidiaries,
or any other payment or distribution made in respect thereof, either directly or
indirectly, and (iii) any management or similar fees paid or payable by the
Borrower or any of its Subsidiaries to any Person who now holds, or in the
future holds, directly or indirectly, an equity interest in the Borrower or any
of its Subsidiaries, provided that the spin-off of the stock of any Affiliated
Subsidiary shall not be a Restricted Payment.
Revolving Credit Loans. Collectively, the loans in the maximum
aggregate principal amount of the Total Commitment in effect from time to time
made or to be made to the Borrower by the Banks pursuant to this Agreement
(including Section 2.1(a) hereof) and subject to the limitations contained
herein.
Revolving Credit Maturity Date. May 22, 2005, or such earlier date on
which the Loans become due and payable pursuant to Section 7.2. The Revolving
Credit Maturity Date may subsequently be extended in accordance with the terms
of Section 2.19.
Security Agreements. The Security Agreements dated as of the date
hereof and executed and delivered by the Borrower and each Domestic Subsidiary
who is a member of the Borrower Affiliated Group to the Administrative Agent,
for the ratable benefit of the Banks and the Administrative Agent.
Security Documents. Collectively, (i) the Security Agreements, the
Patent and Trademark Security Agreements, the Pledge Agreements, the Subsidiary
Guaranty and all other Subsidiary Security Documents, and (ii) all other
agreements, instruments or contracts by which any of the Obligations shall be
evidenced or under or in respect of which the Administrative Agent, any Bank or
any of their respective nominees, agents, or representatives shall have, at such
time, any rights or interests as security for the payment or performance of all
or any part of the Obligations.
Senior Subordinated Debt. The Indebtedness of the Borrower in respect
of the 5.25% Convertible Subordinated Notes Due March 15, 2009, issued under an
Indenture dated as of March 14, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Trust Company of New York, as Trustee, and any refinancings, refundings,
extensions or renewals thereof in accordance with Section 6.1(g).
Solvency Certificates. Collectively, the separate solvency certificates
dated as of the date hereof and executed and delivered by the chief financial
officer of each member of the Borrower Affiliated Group to the Administrative
Agent, for the ratable benefit of the Banks and the Administrative Agent.
Stated Amount. With respect to each Letter of Credit outstanding at any
time, the maximum amount then available to be drawn thereunder (without regard
to whether any conditions to drawing could then be met).
Stockholders' Equity. The amount reported as "stockholders' equity" on
the Borrower's Consolidated balance sheet and determined in accordance with GAAP
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(exclusive of any amount reported as "stockholders' equity" relating to the
Affiliated Subsidiaries).
Subsidiary. With respect to the Borrower, any corporation, association,
joint stock company, business trust or other similar organization of which more
than 50% of the ordinary voting power for the election of a majority of the
members of the board of directors or other governing body of such entity is held
or controlled by the Borrower or a Subsidiary of the Borrower; or any other such
organization the management of which is directly or indirectly controlled by the
Borrower or a Subsidiary of the Borrower through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which the
Borrower has more than a 50% ownership interest.
Subsidiary Guaranty. The Subsidiary Guaranty Agreement dated as of the
date hereof and executed and delivered by all Domestic Subsidiaries who are
members of the Borrower Affiliated Group to the Administrative Agent, for the
ratable benefit of the Banks and the Administrative Agent, which shall be in the
form of Exhibit H hereto.
Subsidiary Security Documents. Collectively, (a) with respect to each
Domestic Subsidiary who is a member of the Borrower Affiliated Group in
existence as of the date hereof, the Subsidiary Guaranty, the Security Agreement
executed by such Domestic Subsidiary, and the Patent and Trademark Security
Agreement executed by such Domestic Subsidiary, in each case executed and
delivered by such Domestic Subsidiaries in connection with the Closing or
pursuant to Section 5.11, (b) with respect to each Domestic Subsidiary who is a
member of the Borrower Affiliated Group formed after the date hereof, a
Subsidiary Guaranty, a Security Agreement, a Patent and Trademark Security
Agreement, each to be executed and delivered by such new Domestic Subsidiary and
each to be in substantially the form of the respective documents delivered by
existing Domestic Subsidiaries under the foregoing clause (a), and (c) each
Pledge Agreement required to be delivered by any Subsidiary of the Borrower
pursuant to the terms hereof.
Swingline Commitment. The obligation of the Swingline Lender to make
Swingline Loans to the Borrower in a maximum principal amount not exceeding at
any time the amount set forth opposite the Swingline Lender's name on Schedule 1
hereto. On the Closing Date, the Swingline Commitment shall be $50,000,000 and
shall not be less than that amount through the Revolving Credit Maturity Date or
earlier acceleration of the Obligations.
Swingline Lender. Fleet, in its capacity as swingline lender hereunder,
or any Eligible Assignee of Fleet who executes an Assignment and Assumption
assuming Fleet's obligations as Swingline Lender.
Swingline Loans. Collectively, the loans in the maximum aggregate
principal amount of the Swingline Commitment made or to be made by the Swingline
Lender to the Borrower pursuant to Section 2.1(b) of this Agreement and subject
to the limitations contained herein.
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Swingline Termination Date. The Revolving Credit Maturity Date.
Synthetic Lease. Any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money Indebtedness for tax purposes but is
classified as an operating lease under GAAP.
Total Capitalization. As at any date of determination, an amount equal
to the sum of (i) Consolidated Total Funded Debt on such date, plus (ii)
Stockholders' Equity on such date.
Total Commitment. As of any date, the sum of the then-current
Commitments of the Banks. As of the date of this Agreement, the Total Commitment
(including the Swingline Commitment) is $500,000,000. After the date of this
Agreement, the aggregate amount of the Total Commitment may be increased to an
amount not exceeding $600,000,000 in accordance with the provisions of Section
2.7.
Uniform Commercial Code. The Uniform Commercial Code as in effect from
time to time in any applicable jurisdiction.
United States Bankruptcy Code. 11 U.S.C. Sections 101-1330.
Utilization. For any day, the aggregate principal amount of all
Revolving Credit Loans and Swingline Loans outstanding on such day, but
excluding outstanding Letters of Credit.
Utilization Fee. The utilization fee payable by the Borrower to the
Administrative Agent for the ratable accounts of the Banks pursuant to Section
2.5.3.
Wachovia Securities. Wachovia Securities is the trade name under which
Wachovia Corporation conducts its investment banking, capital markets and
institutional securities business through First Union Securities, Inc., Member
NYSE, NASD, SIPC, and through other bank and non-bank and broker-dealer
subsidiaries of Wachovia Corporation.
1.2. Terms of General Application. For all purposes of this Agreement
and the other Loan Documents, except as otherwise expressly provided herein or
therein or unless the context otherwise requires:
(a) references to any Person defined in this Agreement refer
to such Person and its successor in title and permitted assigns or, for natural
persons, such Person's successors, heirs, executors, administrators and other
legal representatives;
(b) references to any agreement, instrument or document
defined in this Agreement refer to such document as originally executed, or if
subsequently varied, extended, renewed, modified, amended, restated or
supplemented from time to time, as so
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varied, extended, renewed, modified, amended, restated or supplemented and in
effect at the relevant time of reference thereto;
(c) words importing the singular only shall include the plural
and vice versa, and the words importing the masculine gender shall include the
feminine gender and vice versa, and all references to dollars, $, U.S. Dollars
or United States Dollars, shall be to Dollars;
(d) accounting terms not otherwise defined in this Agreement
or any of the other Loan Documents have the meanings assigned to them in
accordance with GAAP, on a basis consistent with the financial statements
referred to in Section 4.7 of this Agreement;
(e) all financial statements and other financial information
provided by the Borrower and each other member of the Borrower Affiliated Group
to the Administrative Agent or any Bank shall be provided with reference to
Dollars;
(f) this Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others, the
Borrower Affiliated Group and the Administrative Agent and are the product of
discussions and negotiations among all parties. Accordingly, this Agreement and
the other Loan Documents are not intended to be construed against the
Administrative Agent or any of the Banks merely on account of the Administrative
Agent's or any Bank's involvement in the preparation of such documents; and
(g) all references to a time of day shall mean the time then
prevailing in New York, New York, unless otherwise indicated.
SECTION II
DESCRIPTION OF CREDIT
2. The Credit Facilities.
2.1. The Loans.
(a) Revolving Credit Loans. Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally agrees to
lend to the Borrower and the Borrower may borrow (and may repay and reborrow)
from time to time between the Closing Date and the Revolving Credit Maturity
Date, such amounts as are requested by the Borrower up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts requested and
the payment or prepayment of outstanding Loans or unreimbursed draws on Letters
of Credit with the proceeds of such borrowing) at any one time equal to such
Bank's Commitment; provided, however, that (without duplication) the maximum
aggregate principal amount of all Revolving Credit Loans outstanding
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(after giving effect to the amounts requested and the payment or prepayment of
outstanding Loans or unreimbursed draws on Letters of Credit with the proceeds
of such borrowing), plus the aggregate principal amount of all Swingline Loans
outstanding, plus the aggregate Stated Amount of Letters of Credit outstanding
at such time, plus the aggregate amount of all unreimbursed draws under
outstanding Letters of Credit, shall not at any time exceed the Total Commitment
in effect at such time, and provided, further, that at the time the Borrower
requests a Revolving Credit Loan and after giving effect to the making thereof,
no Default or Event of Default has occurred and is continuing.
The Revolving Credit Loans (but not the Swingline Loans) shall be made
pro rata among the Banks in accordance with the Commitment Percentage of each
Bank. If the aggregate principal amount of Revolving Credit Loans outstanding at
any time, plus the aggregate principal amount of Swingline Loans outstanding at
such time, plus the aggregate Stated Amount of Letters of Credit outstanding at
such time, plus the aggregate amount of any unreimbursed draws under outstanding
Letters of Credit shall at any time exceed the Total Commitment in effect at
such time, the Borrower shall immediately pay to the Administrative Agent for
the respective accounts of the Banks the amount of such excess. Any such payment
shall be applied first to outstanding Swingline Loans, and any remainder shall
be applied to outstanding Revolving Credit Loans. Failure to make such payment
on demand shall be an Event of Default hereunder.
(b) Swingline Loans.
(i) Availability. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time from the Closing Date through, but not including, the
Swingline Termination Date; provided, that the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to any amount requested and the
payment or prepayment of outstanding Loans or unreimbursed draws on Letters of
Credit with the proceeds of such borrowing) at any time, shall not exceed the
lesser of (x) the Total Commitment in effect at such time less the sum of (A)
all outstanding Loans at such time, (B) the aggregate Stated Amount of Letters
of Credit outstanding at such time, and (C) the aggregate amount of all
unreimbursed draws under outstanding Letters of Credit at such time, and (y) the
Swingline Commitment at such time, and provided further that after the Swingline
Lender has received written notice from any Bank that a Default or Event of
Default has occurred and stating that no new Swingline Loans are to be made
during the continuance of such Default or Event of Default, the Swingline Lender
shall not make any Swingline Loans until such Default or Event of Default has
been cured or waived in accordance with the provisions of this Agreement.
Swingline Loans hereunder may be used in anticipation of borrowing Revolving
Credit Loans and for other short-term requirements and may be requested for a
period of up to seven (7) days and shall be repaid and may be reborrowed in
accordance with the terms hereof. Each Swingline Loan must be for an amount
equal to at least $250,000. The Swingline Lender shall initiate the transfer of
funds representing the Swingline Loan to the Borrower by 4:00 p.m. on the
Business Day
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of the requested borrowing, so long as the Swingline Loan has been requested by
the Borrower no later than 3:00 p.m. on such Business Day.
(ii) Repayment. The Borrower hereby absolutely and
unconditionally promises to repay the outstanding principal amount of each
Swingline Loan on the earliest to occur of: (x) the eighth day after the date on
which such Swingline Loan was made, (y) the Swingline Termination Date or (z)
demand by the Swingline Lender.
(iii) Refunding and Conversion of Swingline Loans to Revolving
Credit Loans.
(A) So long as the conditions of Section 3.2 (other
than Section 3.2(b)) have been met, on the maturity of each Swingline Loan
(which shall be no longer than seven (7) days after the making of such Swingline
Loan), the Borrower shall be deemed to have requested on such date a Revolving
Credit Loan comprised solely of Base Rate Loans in the principal amount of such
Swingline Loan. Such refundings of the Swingline Loan through the funding of
such Revolving Credit Loans shall be made by the Banks in accordance with their
respective Commitment Percentages applicable to Revolving Credit Loans and shall
thereafter be reflected as Revolving Credit Loans of the Banks on the books and
records of the Administrative Agent (including the Loan Account).
(B) If an Event of Default has occurred and is
continuing, Swingline Loans shall be refunded by the Banks on demand by the
Swingline Lender, in which case the Borrower shall be deemed to have requested
on such date of demand a Revolving Credit Loan comprised solely of Base Rate
Loans in the principal amount of such Swingline Loan. Such refundings of the
Swingline Loan through the funding of such Revolving Credit Loans shall be made
by the Banks in accordance with their respective Commitment Percentages
applicable to Revolving Credit Loans and shall thereafter be reflected as
Revolving Credit Loans of the Banks on the books and records of the
Administrative Agent (including the Loan Account). Each Bank shall fund its
respective Commitment Percentage of Revolving Credit Loans as required to repay
Swingline Loans outstanding to the Swingline Lender upon such demand by the
Swingline Lender but in no event later than 2:00 p.m. on the next succeeding
Business Day after such demand is made. No Bank's obligation to fund its
respective Commitment Percentage of the repayment of a Swingline Loan shall be
affected by any other Bank's failure to fund its Commitment Percentage of such
repayment, nor shall any Bank's Commitment Percentage be increased as a result
of any such failure of any other Bank to fund its Commitment Percentage. To the
extent any Bank does not fund its respective Commitment Percentage of any
Revolving Credit Loan deemed to be made to the Borrower pursuant to this
Section, such Bank shall be deemed a Delinquent Bank and the Borrower shall
repay such amounts to the Swingline Lender in accordance with the provisions of
Section 8.3(c) as if such Loan were a Revolving Credit Loan for which a Bank did
not advance its share to the Administrative Agent.
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(C) The Borrower hereby authorizes the Administrative
Agent to charge any account maintained with the Swingline Lender (up to the
amount available therein) in order to immediately pay the Swingline Lender the
amount of any Swingline Loans when due (x) to the extent amounts received from
the Banks are not sufficient to repay in full the outstanding Swingline Loans
required to be refunded pursuant to Section 2.1(b)(iii)(B), and (y) to satisfy
the Borrower's obligations pursuant to clause (D) below. If any portion of any
such amount paid to the Swingline Lender shall be recovered by or on behalf of
the Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of
the amount so recovered shall be ratably shared among all the Banks.
(D) If at any time the Borrower receives notice from
the Swingline Lender that the aggregate principal amount of all Revolving Credit
Loans outstanding, plus the aggregate principal amount of all Swingline Loans
outstanding (including the Swingline Loan for which demand for payment is then
made by the Swingline Lender pursuant to this subsection), plus the aggregate
Stated Amount of Letters of Credit outstanding at such time, plus the aggregate
of all unreimbursed draws under outstanding Letters of Credit, equals or exceeds
the Total Commitment at such time, the Borrower shall repay the amount of such
excess upon demand by the Swingline Lender, which payment shall be applied first
to the Swingline Loans and thereafter to the other Obligations.
(E) Each Bank acknowledges and agrees that its
obligation to refund Swingline Loans with Revolving Credit Loans in accordance
with the terms of this Section 2.1(b) is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, in any event,
non-satisfaction of the conditions set forth in Section 2.1(a) or Article III.
Further, each Bank having a Revolving Credit Commitment agrees and acknowledges
that if, prior to the refunding of any outstanding Swingline Loans pursuant to
this Section 2.1(b), one of the events described in Section 7.1(f) or (g) shall
have occurred, each Bank will, on the date the applicable Revolving Credit Loan
would have been made pursuant to Section 2.1(b)(iii) hereof, purchase an
undivided participating interest in the Swingline Loan to be refunded in an
amount equal to its Commitment Percentage (applicable to Revolving Credit Loans)
of the aggregate amount of such Swingline Loan. Each Bank will immediately
transfer to the Swingline Lender, in immediately available funds, the amount of
its participation. Whenever, at any time after the Swingline Lender has received
from any Bank such Bank's participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Bank's participating interest was outstanding and
funded).
(F) Each Bank's Commitment Percentage applicable to
any Swingline Loan shall be identical to its Commitment Percentage applicable to
Revolving Credit Loans.
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(c) Loan Account. The Administrative Agent shall enter Loans
and advances made by the Banks to the Borrower pursuant to this Agreement
(including, without limitation, on account of any Letters of Credit) as debits
in the Loan Account. The Administrative Agent shall also record in the Loan
Account all payments made by the Borrower on account of the Loans and may also
record therein, in accordance with customary accounting practices, other debits
and credits, including customary banking charges and all interest, fees, charges
and expenses chargeable to the Borrower under this Agreement. The debit balance
of the Loan Account shall reflect the amount of the Borrower's Obligations
hereunder and shall be considered correct absent manifest error.
2.2. Records; Notes.
(a) Banks' Records. Each Bank will note (manually or
electronically) on its records with respect to each Loan made by it (i) the date
and amount of such Loan, (ii) whether such Loan is a Revolving Credit Loan or a
Swingline Loan, (iii) the interest rate and Interest Period, if any, applicable
to such Loan, and (iv) each payment and prepayment of the principal thereof.
(b) Administrative Agent's Records. The Administrative Agent
shall keep records regarding the Loans, the Letters of Credit and this Agreement
in accordance with its customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable law, be prima facie evidence of the existence and
amount of the obligations of the Banks and Borrower recorded therein; provided,
however, that the failure of the Administrative Agent or any Bank, as the case
may be, to make any notation on its records shall not affect the Borrower's
obligations in respect of the Loans, the Letters of Credit or this Agreement.
(d) Notes. Upon the request of any Bank (including the
Swingline Lender) to the Administrative Agent and the Borrower, the Borrower
agrees, at its expense, to execute and deliver to the Administrative Agent for
the account of such Bank one or more promissory notes evidencing the Loan or
Loans of such Bank to the Borrower, in substantially the form of Exhibit A
attached hereto.
2.3. Conversion. Provided that no Default or Event of Default shall
have occurred and be continuing, and subject to and in accordance with the
provisions of Section 2.4(a), the Borrower may convert all or any part (in an
amount equal to at least $5,000,000 and additional increments of $1,000,000) of
any outstanding Loan (other than Swingline Loans) into a Loan of the other type
provided for in this Agreement in the same aggregate principal amount, on any
Business Day (provided, that, in the case of a conversion of a LIBOR Loan on a
day other than the last day of the Interest Period applicable to such LIBOR
Loan, the Borrower pay any amounts due under Section 2.15). The Borrower shall
give the Administrative Agent and the Banks prior notice of each such conversion
(which notice shall be effective upon receipt) in accordance with
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Section 2.4. All such conversions shall be made pro rata in accordance with each
Bank's Commitment Percentage applicable to the type of Loan being converted.
2.4. Notice and Manner of Borrowing or Conversion of Loans.
(a) Whenever the Borrower desires to obtain or continue a
Revolving Credit Loan or Swingline Loan hereunder or convert an outstanding Loan
into a Loan of the other type provided for in this Agreement, the Borrower shall
notify the Administrative Agent (which notice shall be irrevocable) by telecopy
or telephone (i) with respect to Base Rate Loans, received no later than 1:00
p.m. on the date on which the requested Loan is to be made or continued as or
converted to a Base Rate Loan, (ii) with respect to Swingline Loans, received no
later than 3:00 p.m. on the day on which a Swingline Loan is to be made, and
(iii) with respect to LIBOR Loans, received no later than 1:00 p.m. on the date
that is three (3) Business Days before the day on which the requested Loan is to
be made or continued as or converted to a LIBOR Loan, provided that no more than
10 LIBOR Loans may be outstanding at any one time. Such notice by the Borrower
shall specify (i) the effective date and amount of each Loan to be obtained,
continued or converted (or portion thereof to be continued or converted, as the
case may be), subject to the limitations set forth in Section 2.1, (ii) the
interest rate option to be applicable thereto, and (iii) the duration of the
applicable Interest Period, if any (subject to the provisions of the definition
of Interest Period and Section 2.9). Each LIBOR Loan must be for an amount equal
to at least $5,000,000 and in additional increments of $1,000,000. Each such
notification by telephone pursuant to Section 2.3 or this Section 2.4(a) (a
"Notice of Borrowing or Conversion") shall be immediately followed by a written
confirmation thereof by the Borrower in substantially the form of Exhibit B
hereto, provided that if such written confirmation differs in any material
respect from the action taken by the Administrative Agent, the records of the
Administrative Agent shall be conclusive absent manifest error.
(b) Subject to the terms and conditions hereof, (i) each Bank
shall make available to the Administrative Agent, in immediately available
funds, no later than 2:00 p.m. on the date upon which any Base Rate Loan or
LIBOR Loan is to be made, such Bank's Commitment Percentage of the requested
Loan, and (ii) the Swingline Lender shall make available to the Administrative
Agent, in immediately available funds, no later than 4:00 p.m. on the date on
which any Swingline Loan is to be made, the amount of such Swingline Loan to be
made on such date. The Administrative Agent shall, in turn, make each Loan on
the effective date specified therefor by crediting the amount of such Loan to
the Borrower's demand deposit account with the Administrative Agent. In no event
shall the Administrative Agent (in its capacity as Administrative Agent) have
any obligation to make any funding or shall any Bank be obligated to fund more
than its Commitment Percentage of the requested Base Rate Loan or LIBOR Loan.
Revolving Credit Loans to be made for the purpose of refunding Swingline Loans
shall be made by the Banks as provided in Section 2.1(b).
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2.5. Fees.
2.5.1. Fee Letter. The Borrower shall pay to the Administrative Agent
fees in the amounts and at the times outlined in the Fee Letter.
2.5.2. Commitment Fee. The Borrower shall pay to the Administrative
Agent for the accounts of the Banks in accordance with their respective
Commitment Percentages a commitment fee (the "Commitment Fee") computed at a
rate per annum on the average daily aggregate amount, during each calendar
quarter or portion thereof, of the unborrowed portion of the Total Commitment in
effect at such time, which rate shall be not less than (A) 0.250%, from the
Closing Date through the second Business Day after the date on which the
financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(c), respectively, for the fiscal quarter of
the Borrower Affiliated Group ending August 3, 2002 is delivered to the
Administrative Agent (provided that it could be more than 0.250% based upon the
financial statements received by the Administrative Agent for the fiscal quarter
of the Borrower ending May 4, 2002), and (B) thereafter, for each Rate Period,
the percentage determined by reference to the Fixed Charge Coverage Ratio for
the most recent four fiscal quarter period of the Borrower Affiliated Group, as
set forth in the table below (provided that if the Borrower has failed for more
than 5 days to deliver the financial statements and compliance certificate
required to be delivered pursuant to Sections 5.1(b) and 5.1(c), respectively,
the Commitment Fee in effect at the applicable time of reference shall
automatically be increased by .25% until such financial statements and
compliance certificate are delivered):
Fixed Charge Coverage Ratio Commitment Fee
--------------------------- --------------
Level I. equal to or less than 1.65 to 1.00 0.500%
Level II. greater than 1.65 to 1.00 and equal to or 0.375%
less than 1.80 to 1.00
Level III. greater than 1.80 to 1.00 and equal to or 0.250%
less than 2.50 to 1.00
Level IV. greater than 2.50 to 1.00 0.200%
Commitment fees shall be payable quarterly in arrears on the last Business Day
of each fiscal quarter beginning on August 3, 2002 (with the first such payment
being calculated from the Closing Date not the first day of the quarter) and on
the Revolving Credit Maturity Date. For purposes of calculating the Commitment
Fee, outstanding Revolving Credit Loans, outstanding Swingline Loans,
outstanding Letters of Credit and unreimbursed draws under Letters of Credit
shall be included, without duplication, in determining the borrowed portion of
the Total Commitment.
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2.5.3. Utilization Fee. For each day on which Utilization is (i)
greater than or equal to 33% of the Total Commitment as in effect on such day,
but less than 66% of the Total Commitment as in effect on such day, there shall
be a utilization fee (the "Utilization Fee") payable to the Administrative Agent
for the ratable account of the Banks, on the aggregate amount of all Revolving
Credit Loans and Swingline Loans outstanding on such day, which Utilization Fee
will be computed for each such day at the rate of 0.125% per annum, and (ii)
greater than or equal to 66% of the Total Commitment as in effect on such day,
there shall be a Utilization Fee payable to the Administrative Agent for the
ratable account of the Banks, on the aggregate amount of all Revolving Credit
Loans and Swingline Loans outstanding on such day, which Utilization Fee will be
computed for each such day at the rate of 0.250% per annum. The Utilization Fee
shall be payable quarterly in arrears on the last Business Day of each fiscal
quarter beginning on August 3, 2002 and on the Revolving Credit Maturity Date.
2.6. Reduction of Total Commitment. The Borrower may from time to time
by written notice delivered to the Administrative Agent at least one Business
Day prior to the date of the requested reduction, reduce by a minimum amount of
$5,000,000, and in additional increments of $1,000,000, any unborrowed portion
of the Total Commitment. No reduction of the Total Commitment shall be subject
to reinstatement.
2.7. Increases in Total Commitment. The Borrower, with the consent of
the Administrative Agent and each Bank whose Commitment Amount will be
increasing, shall have the right to cause the Total Commitment to increase by an
amount not at any time exceeding $100,000,000 (the "Increase"), in which event
the Administrative Agent will amend Schedule 1 to reflect the increased
Commitment of each Bank that has agreed in writing to an increase and to add any
third party financial institution that may have become a party to, and a "Bank"
under, this Agreement in connection with the Increase; provided, however, that
it shall be a condition precedent to the effectiveness of the Increase that the
Increase Conditions shall have been satisfied. In the event that the Increase
results in any change to the Commitment Percentages of any Banks, then on the
effective date of such Increase in the Total Commitment (i) any new Bank, and
any existing Bank whose Commitment has increased, shall pay to the
Administrative Agent such amounts as are necessary to fund its new or increased
Commitment Percentages of all existing Loans, (ii) the Administrative Agent will
use the proceeds thereof to pay to all Banks whose Commitment Percentage is
decreasing such amounts as are necessary so that each such Bank's participation
in existing Revolving Credit Loans will be equal to its adjusted Commitment
Percentage, and (iii) if the effective date of such Increase in the Total
Commitment occurs on a date other than the last day of an Interest Period
applicable to any outstanding LIBOR Loan, the Borrower will be responsible for
any amounts payable pursuant to Section 2.15 on account of the payments made
pursuant to clause (ii) above.
2.8. Duration of Interest Periods.
(a) Subject to the provisions of the definition of "Interest
Period," the duration of each Interest Period applicable to a LIBOR Loan shall
be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to
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elect a subsequent Interest Period to be applicable to such Loan by giving
notice of such election to the Bank received no later than 10:00 a.m. on the
date that is 3 Business Days before the end of the then applicable Interest
Period if such Loan is to be continued as or converted to a LIBOR Loan.
(b) If the Administrative Agent does not receive a notice of
election of duration of an Interest Period for a LIBOR Loan pursuant to
subsection (a) above within the applicable time limits specified therein, or if,
when such notice must be given, an Event of Default exists, the Borrower shall
be deemed to have elected to convert such Loan in whole into a Base Rate Loan on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Revolving Credit Maturity Date.
2.9. Interest Rates and Payments of Interest.
(a) (i) Each Revolving Credit Loan which is a Base Rate Loan
shall bear interest on the outstanding principal amount thereof at a rate per
annum equal to the Base Rate plus the Applicable Base Rate Margin, which rate
shall change contemporaneously with any change in the Base Rate. Such interest
shall be payable on the last Business Day of any fiscal quarter in which a Base
Rate Loan is outstanding hereunder, and when such Loan is due (whether at
maturity, by reason of acceleration or otherwise).
(ii) Each Swingline Loan shall bear interest at a fixed
rate quoted to the Borrower by the Swingline Lender in its discretion, provided
that such quoted rate shall not exceed the Base Rate in effect on the day of
quotation. Interest on Swingline Loans shall be payable, and the Borrower hereby
absolutely and unconditionally promises to pay such interest, when such
Swingline Loan is due and payable, or when such Swingline Loan is actually paid,
if earlier.
(b) Each Revolving Credit Loan which is a LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the Adjusted LIBOR Rate
plus the Applicable LIBOR Margin. Such interest (including any adjustments made
in the Administrative Agent's discretion consistent with the definition of
Adjusted LIBOR Rate to take into consideration any change in the Reserve
Percentage) shall be payable for such Interest Period (i) on the earlier of the
last day of such Interest Period and, if such Interest Period is longer than
three months, at quarterly intervals after the first day of such Interest Period
and (ii) when such LIBOR Loan is due (whether at maturity, by reason of
acceleration or otherwise).
(c) For purposes of this Section 2.9 but subject to Section
2.5.3, with reference to Revolving Credit Loans, (i) the "Applicable Base Rate
Margin" shall be not
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less than (A) 0.00% from the Closing Date through the second Business Day after
the date of the Administrative Agent's receipt and satisfactory review of the
financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(c), respectively, for the fiscal quarter of
the Borrower Affiliated Group ending August 3, 2002 (provided that it could be
more than 0.00% based upon the financial statements received by the
Administrative Agent for the fiscal quarter of the Borrower ending May 4, 2002),
and (B) thereafter, for each Rate Period, the percentage determined by reference
to the Fixed Charge Coverage Ratio for the most recent four fiscal quarter
period of the Borrower Affiliated Group, as set forth in the table below, and
(ii) the "Applicable LIBOR Margin" shall be equal to (A) not less than 1.375%
from the Closing Date through the second Business Day after the date of the
Administrative Agent's receipt and satisfactory review of the financial
statements and compliance certificate required to be delivered pursuant to
Sections 5.1(b) and 5.1(c), respectively, for the fiscal quarter of the Borrower
Affiliated Group ending August 3, 2002 (provided that it could be more than
1.375% based upon the financial statements received by the Administrative Agent
for the fiscal quarter of the Borrower ending May 4, 2002), and (B) thereafter,
for each Rate Period, the percentage determined by reference to the Fixed Charge
Coverage Ratio for the most recent four fiscal quarter period of the Borrower
Affiliated Group, as set forth in the table below:
Revolving Credit Loans
Applicable Applicable
Fixed Charge Coverage Base Rate LIBOR
Ratio Margin Margin
----- ------ ------
Level I. equal to or less than 1.65 to 0.25% 1.875%
1.00
Level II. greater than 1.65 to 1.00 and 0.00% 1.625%
equal to or less than 1.80 to
1.00
Level III. greater than 1.80 to 1.00 and 0.00% 1.375%
equal to or less than 2.15 to
1.00
Level IV. greater than 2.15 to 1.00 and 0.00% 1.125%
equal to or less than 2.50 to
1.00
Level V. greater than 2.50 to 1.00 0.00% 0.875%
For purposes of determining the Applicable Base Rate Margin and the Applicable
LIBOR Margin, the Fixed Charge Coverage Ratio will be tested quarterly,
commencing with the fiscal quarter of the Borrower Affiliated Group ending May
4, 2002, based on the
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financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(c), respectively. For purposes of
determining the interest rate for any Rate Period hereunder, any interest rate
change shall be effective two Business Days after the date on which the
financial statements and compliance certificate required to be delivered
pursuant to Sections 5.1(b) and 5.1(c), respectively, is delivered to the
Administrative Agent, together with a notice to the Administrative Agent (which
shall be verified by the Administrative Agent) specifying any change in the
Applicable Base Rate Margin and the Applicable LIBOR Margin, and if the Borrower
has failed for more than 5 days to deliver the financial statements and
compliance certificate required to be delivered pursuant to Sections 5.1(b) and
5.1(c), respectively, the Applicable Base Rate Margin and the Applicable LIBOR
Margin in effect at the applicable time of reference shall automatically be
increased by .25% until such financial statements and compliance certificate are
delivered. The Borrower absolutely and unconditionally promises to pay all such
interest referenced to in this Section 2.9 to the Administrative Agent for the
ratable benefit of the Banks as and when such interest is due.
2.10. Protective Provisions.
2.10.1. Inability to Determine Adjusted LIBOR Rate. In the event, prior
to the commencement of any Interest Period relating to any LIBOR Loan, the
Administrative Agent shall determine in its good faith judgment or be notified
by the Required Banks that adequate and reasonable methods do not exist for
ascertaining the Adjusted LIBOR Rate that would otherwise determine the rate of
interest to be applicable to any LIBOR Loan during such Interest Period, the
Administrative Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the Borrower
and the Banks. In such event (a) any Notice of Borrowing or Conversion with
respect to LIBOR Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each LIBOR Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (c) the obligations of the Banks to make LIBOR Loans shall be
suspended until the Administrative Agent or the Required Banks, as applicable,
determine that the circumstances giving rise to such suspension no longer exist,
whereupon the Administrative Agent or, as the case may be, the Administrative
Agent upon the instruction of the Required Banks, shall so notify the Borrower
and the Banks.
2.10.2. Illegality. Notwithstanding any other provisions herein, if any
Change in Law shall make it unlawful for any Bank to make or maintain LIBOR
Loans, such Bank shall forthwith give notice of such circumstances to the
Borrower and the other Banks and thereupon the commitment of such Bank to make
LIBOR Loans or convert Base Rate Loans to LIBOR Loans shall forthwith be
suspended and such Bank's LIBOR Loans then outstanding as LIBOR Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Bank, upon demand by such Bank, any
additional amounts as such Bank may in good faith determine to be necessary to
compensate such Bank for any costs incurred by such Bank in making any
conversion in
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accordance with this Section 2.10.2, including any interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or maintain its
LIBOR Loans hereunder.
2.10.3. Additional Costs, etc. After the Closing Date, if any Change in
Law shall:
(a) subject any Bank or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Agreement, the other Loan Documents, such Bank's Commitment or
Loans (other than Covered Taxes and Income Taxes); or
(b) materially change the basis of taxation (except for
changes in Income Taxes of such Bank or the Administrative Agent) of payments to
any Bank of the principal of or the interest on any Loans or any other amounts
payable to any Bank or the Administrative Agent under this Agreement or any of
the other Loan Documents; or
(c) without duplication of any amount required to be paid
pursuant to Section 2.11, impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or letters of credit issued by, or commitments of
an office of any Bank; or
(d) impose on any Bank or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of Loans or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is:
(i) in the good faith determination of an Affected
Bank, to materially increase the cost to such Bank of making, funding,
issuing, renewing, extending or maintaining any of the LIBOR Loans or
such Bank's Commitment; or
(ii) to reduce the amount of principal, interest, or
other amount payable to such Bank or the Administrative Agent hereunder
on account of such Bank's Commitment or any of the LIBOR Loans; or
(iii) to require such Bank or the Administrative
Agent to make any payment or to forego any interest or other sum
payable hereunder in relation to LIBOR Loans, the amount of which
payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Administrative Agent from the Borrower hereunder,
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then, in each such case and to the extent that the amount of such additional
cost, reduction, payment, foregone interest or other sum is not reflected in the
Adjusted LIBOR Rate, the Borrower will, upon demand made by such Bank (with a
copy to the Administrative Agent) or (as the case may be) the Administrative
Agent at any time and from time to time and as often as the occasion therefor
may arise, pay to such Bank or the Administrative Agent such additional amounts
as will be sufficient to compensate such Bank or the Administrative Agent for
such additional cost, reduction, payment or foregone interest or other sum
(without duplication for recovery of such amounts under any other provision
hereof), provided, however, that the Borrower shall not be liable to any Bank or
the Administrative Agent for costs incurred more than 90 days prior to the
receipt by the Borrower of such demand for payment from such Bank or (as the
case may be) the Administrative Agent unless such costs were incurred prior to
such 90-day period as a result of such Change in Law being retroactive to a date
which occurred prior to such 90-day period, and provided further that the
Borrower is treated no differently than such Bank's other similarly-situated
customers.
2.10.4. Claims by Affected Banks; Borrower's Right to Replace Banks.
Before giving any notice to the Borrower and the other Banks of a claim (whether
for compensation or to be excused from an otherwise applicable obligation) under
Section 2.10.2, 2.10.3, 2.11 or 2.13, the Affected Bank shall use commercially
reasonable efforts to designate a different lending office with respect to its
LIBOR Loans or other Loans if such designation would avoid the need for giving
such notice and would not, in the judgment of such Affected Bank, be illegal or
otherwise disadvantageous to the Affected Bank. Any claim under any of Sections
2.10.2, 2.10.3, 2.11 or 2.13 shall be delivered to the Borrower promptly after
the Affected Bank has determined that it is entitled to such claim. Upon the
Borrower's receipt of any such claim, the Borrower may: (i) request one or more
of the other Banks to acquire and assume all or part of such Affected Bank's
Loans and Commitment; or (ii) designate a replacement bank or financial
institution satisfactory to the Administrative Agent in its reasonable
discretion. If one or more of the other Banks in its sole discretion agrees to
acquire all or part of such Affected Bank's Loans and Commitment or if such a
satisfactory replacement bank or financial institution is designated, the
Affected Bank shall promptly assign all or such part of its Loans and Commitment
in accordance with Section 9.10(ii), and in connection with such assignment, the
Affected Bank shall have received the aggregate principal amount of, and any
interest accrued and unpaid to the effective date of the assignment on, the
outstanding Loans, if any, of such Affected Bank plus any accrued but unpaid
Commitment Fees and Utilization Fees and other amounts, if any, owing to such
Affected Bank as of the effective date of such assignment.
2.11. Capital Requirements. If after the date hereof the Administrative
Agent or any Bank in good faith determines that (i) any Change in Law or any new
or changed guideline regarding capital requirements for banks or bank holding
companies, or any change in the interpretation or application thereof by any
governmental authority charged with the administration thereof, or (ii)
compliance by the Administrative Agent or any Bank or its parent bank holding
company with any guideline, request or directive adopted after the date hereof
of any such authority regarding capital adequacy (whether or not
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having the force of law), has the effect of reducing the return on the
Administrative Agent's or such Bank's or such holding company's capital as a
consequence of the Administrative Agent's or such Bank's commitment to make
Loans hereunder and other commitments of the type hereunder to a level below
that which the Administrative Agent or such Bank or such holding company could
have achieved but for such adoption, change or compliance (taking into
consideration the Administrative Agent's or such Bank's or such holding
company's then existing policies with respect to capital adequacy and assuming
the full utilization of such entity's capital) by any amount deemed by the
Administrative Agent or such Bank to be material, then the Administrative Agent
shall promptly notify the Borrower thereof. The Borrower agrees to pay to the
Administrative Agent or such Bank the amount of such reduction of capital as and
when such reduction is in good faith determined, upon presentation by the
Administrative Agent or such Bank of a written statement in the amount and
setting forth in reasonable detail the Administrative Agent's or such Bank's
calculation thereof, which statement shall be deemed true and correct absent
manifest error. In determining such amount, the Administrative Agent or such
Bank may use any reasonable averaging and attribution methods. Notwithstanding
the foregoing, the Borrower shall not be liable to any Bank or the
Administrative Agent for such reductions with respect to events that occurred
more than 90 days prior to the receipt by the Borrower of such demand for
payment from such Bank or (as the case may be) the Administrative Agent unless
such reductions were with respect to events that occurred prior to such 90-day
period.
2.12. Payments and Prepayments of the Loans.
(a) The Borrower hereby absolutely and unconditionally
promises to pay the entire principal amount of the Loans, and the entire
principal amount of the Loans shall be absolutely due and payable by the
Borrower to the Banks, on the Revolving Credit Maturity Date. All of the other
Indebtedness evidenced by the Loan Documents shall, if not sooner paid, also be
absolutely due and payable by the Borrower to the Banks on the Revolving Credit
Maturity Date.
(b) Revolving Credit Loans that are Base Rate Loans may be
voluntarily prepaid at any time, without premium or penalty, upon not less than
one Business Day's prior written notice to the Administrative Agent and each
Bank. Swingline Loans may be prepaid at any time with same day written notice to
the Swingline Lender, provided such notice is received by 3:00 p.m. Subject to
the provisions of Section 2.15, Revolving Credit Loans that are LIBOR Loans may
be voluntarily prepaid at any time, without premium or penalty, upon not less
than two Business Days' prior written notice to the Administrative Agent and
each Bank. Any interest accrued on the amounts so prepaid to the date of such
payment must be paid at the time of any such payment. No prepayment of the
Revolving Credit Loans or Swingline Loans prior to the Revolving Credit Maturity
Date shall affect the Total Commitment or impair the Borrower's right to borrow
as set forth in Section 2.l. Partial prepayments of the Revolving Credit Loans
shall be in an amount equal to $2,500,000 or additional increments of
$1,000,000. In the case of any partial payment of the Revolving Credit Loans,
the total amount of such partial payment shall be allocable among the
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Revolving Credit Loans subject to adjustment as provided in Section 8.5, pro
rata in accordance with the Commitment Percentage of each Bank.
(c) The Borrower shall be required to make mandatory prepayments of the
Loans as set forth below (each a "Mandatory Prepayment"), such payments being
due and payable on the day on which any Net Proceeds are received by the
Borrower or any other member of the Borrower Affiliated Group:
(i) an amount equal to 100% of the Net Proceeds received
by the Borrower or any member of the Borrower
Affiliated Group from the sale or other disposition
of any of its assets, other than Equity Securities
(in one or more transactions), except for (x) sales
of inventory wholly in the ordinary course of
business, (y) any one or more sales of assets not in
the ordinary course of business having an aggregate
fair market value of less than or equal to
$35,000,000 in any fiscal year and (z) sales of
obsolete equipment or other assets no longer used or
useful in the business of the Borrower Affiliated
Group; and
(ii) an amount equal to 100% of the Net Proceeds received
from the sale of any Equity Securities (including the
Equity Securities of the Affiliated Subsidiaries) by
the Borrower or any other member of the Borrower
Affiliated Group, provided that in the case of any
sale of the Equity Securities of GameStop Corp., in
addition to the payment of such Net Proceeds, the
Total Commitment shall be automatically and
permanently reduced by an amount equal to the
following: (x) if the Fair Market Value of the Equity
Securities of GameStop Corp. retained by the Borrower
(after giving effect to such sale) equals or exceeds
$250,000,000, then by the lesser of (A) the Fair
Market Value of the Equity Securities sold and (B)
$200,000,000, or (y) if the Fair Market Value of the
Equity Securities so retained (after giving effect to
such sale) is less than $250,000,000, then by
$200,000,000. In no event shall the Total Commitment
be required to be reduced to an amount less than
$400,000,000 as a result of a sale of the Equity
Securities of GameStop Corp., and provided, further,
that notwithstanding anything to the contrary
contained herein, no reduction of the Total
Commitment shall be required if (1) the Borrower's
long-term debt ratings are Baa3 and BBB- or higher or
(2) the Borrower or any other member of the Borrower
Affiliated Group receives Equity Securities in
exchange for the Equity Securities of GameStop Corp.
(so long as such Equity Securities are pledged to the
Administrative Agent as collateral for the
Obligations).
The issuance of Equity Securities as a result of the
exercise by employees, officers and directors of
stock options or similar rights
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shall not be deemed a sale of Equity Securities for
purposes of this Section 2.12(c).
Mandatory Prepayments shall be applied to the outstanding
Loans, first to reduce any outstanding Swingline Loans, and any remainder shall
be applied to outstanding Revolving Credit Loans. Mandatory Prepayments of LIBOR
Loans shall be made subject to the provisions of Section 2.15. All such
Mandatory Prepayments shall be allocable to each Bank in accordance with each
such Bank's Commitment Percentage.
2.13. Method of Payment; Withholding Tax Exemption.
(a) All payments and prepayments of principal and all payments
of interest and other amounts due in respect of Loans shall be made by the
Borrower to the Administrative Agent, for the respective accounts of the Banks
or (as the case may be) the Administrative Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in immediately available funds, free and clear of, and
without any deduction or withholding for, any taxes (other than Income Taxes)
(all such taxes (other than Income Taxes) imposed by withholding or deduction,
"Covered Taxes") or other payments unless required by law, and without set-off,
recoupment or counterclaim. All payments and collections received after 3:00
p.m. will be deemed applied to the outstanding Loans one day after the
Administrative Agent's receipt of such payments in immediately available funds.
If Covered Taxes are required to be withheld or deducted by law, the Borrower
shall pay additional amounts so that after the required withholding or deduction
the Banks and the Administrative Agent receive the amount they would have
received had no such deduction or withholding been required; provided, however,
that the Borrower shall not be required to pay any additional amounts with
respect to (i) Income Taxes, or (ii) amounts owing to a Bank that (x) is not
incorporated under the laws of the United Sates of America or a state thereof,
and (y) has not delivered to the Administrative Agent the forms required by
Section 2.13(b) below (other than pursuant to the proviso at the end of such
Section 2.13(b)).
(b) At least five Business Days prior to the first date on
which interest or fees are payable hereunder for the account of any Bank, each
Bank that is not incorporated under the laws of the United States of America or
a state thereof (herein, a "Foreign Bank") agrees that it will deliver to each
of the Borrower and the Administrative Agent (or, in the case of a Participant
or an Assignee, to the Bank from which the Commitment was transferred) two duly
completed and executed copies of either U.S. Internal Revenue Service Form
W-8BEN (relating to an exemption under an applicable treaty) or Form W-8ECI (or
any subsequent versions thereof or successors thereof), certifying in either
case that such Foreign Bank is entitled to receive payments under this Agreement
and the other Loan Documents without deduction or withholding of any United
States federal income taxes. Each Foreign Bank which so delivers a Form W-8BEN
(relating to an exemption under an applicable treaty) or Form W-8ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the
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most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Foreign Bank is entitled
to receive payments under this Agreement and the Notes (if any) without
deduction or withholding of any United States federal income taxes; provided,
however, that such requirement will not apply to a Foreign Bank if any Change in
Law has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Foreign Bank from duly completing and delivering any such form with respect to
it and such Foreign Bank advises the Borrower and the Administrative Agent in
writing that it is no longer capable of receiving payments without any deduction
or withholding of United States federal income taxes.
(c) If there is any Change in Law after the Closing Date, and
the result thereof is that any Bank or the Administrative Agent becomes subject
to Covered Taxes, the Borrower shall pay additional amounts so that after the
required withholding or deduction the Banks and the Administrative Agent receive
the amount they would have received had no such deduction or withholding been
required, provided, however, that the relevant Bank shall timely file the
appropriate forms to reduce the amount of required withholding or deduction to
the lowest applicable rate to which such Bank is entitled.
(d) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form described in (i) Section 2.13(b)
above (other than pursuant to the proviso thereto) or (ii) the proviso to
Section 2.13(c) above, such Bank shall not be entitled to any additional
payments under Section 2.10 or this Section 2.13 with respect to Covered Taxes
imposed by reason of such failure; provided, however, that in the event of a
failure described in the proviso to Section 2.13(c), such Bank shall be entitled
to such an additional payment to the extent of the amount of Covered Taxes to
which such Bank would be subject even if it delivered the appropriate form
required by the proviso to Section 2.13(c); and provided, further, however, that
should a Bank become subject to Covered Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as the Bank
reasonably shall request to assist the Bank to recover such Covered Taxes.
(e) If a Bank or the Administrative Agent receives a refund or
credit in respect of any Covered Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.13, it shall, reasonably promptly after the date of
such receipt, pay over the amount of such refund or credit to the Borrower, net
of all reasonable out-of-pocket expenses of such Bank or the Administrative
Agent in obtaining such refund (it being agreed that if such expenses are
expected by such Bank or the Administrative Agent to be material, such Bank or
the Administrative Agent will attempt in good faith to consult with the Borrower
prior to incurring such expenses) and without interest (other than interest paid
by the relevant taxation authority with respect to such refund); provided that
the Borrower, upon the written request of such Bank or the Administrative Agent,
agrees to repay the amount paid over to the Borrower (plus penalties, interest
or other reasonable
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charges) to such Bank or the Administrative Agent in the event such Bank or the
Administrative Agent is required to repay such refund or credit to such taxation
authority.
(f) If the Borrower is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to this Section 2.13, then such
Bank shall use commercially reasonable efforts to designate a different lending
office with respect to its LIBOR Loans if such designation would avoid such
additional payment and would not, in the good faith judgment of such Bank, be
illegal or otherwise disadvantageous to the Bank.
(g) The Borrower authorizes the Administrative Agent to charge
to any deposit account which the Borrower may maintain with the Administrative
Agent, at maturity or otherwise when due, the principal, interest, fees,
charges, and expenses provided for in this Agreement or any other document
executed and delivered in connection herewith, or to advance to the Borrower and
to charge to it as a Revolving Credit Loan a sum sufficient to pay such
principal, interest, fees, charges, expenses or additional amounts, with advice
thereafter sent to the Borrower's chief financial officer in accordance with the
Administrative Agent's customary practice.
2.14. Default Rate Interest, etc.
(a) Upon the occurrence and during the continuance of an Event
of Default, at the request of the Administrative Agent or the Required Banks,
all amounts outstanding hereunder or under any other Loan Document (including,
without limitation, all principal, interest and fees outstanding) shall bear
interest from and including the due date thereof until paid, compounded daily
and payable on demand, at a rate per annum equal to (i) if such due date occurs
prior to the end of an Interest Period, 2.0% above the interest rate applicable
to such Loan for such Interest Period until the expiration of such Interest
Period, and thereafter, 2.0% above the rate then applicable to Base Rate Loans;
and (ii) in all other cases, 2.0% above the rate then applicable to Base Rate
Loans.
(b) Upon the occurrence and during the continuance of an Event
of Default, at the request of the Administrative Agent or the Required Banks,
the Letter of Credit fees payable under Section 2.18 shall be increased to a
rate per annum equal to 2.0% above the rate applicable thereto prior to the
occurrence thereof.
2.15. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any LIBOR Loan on any day
other than the last day of an Interest Period applicable to such LIBOR Loan, or
fails to borrow or continue or convert to a LIBOR Loan after giving a Notice of
Borrowing or Conversion pursuant to Section 2.4, the Borrower shall pay to the
Administrative Agent for the respective accounts of the Banks an amount computed
pursuant to the following formula:
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L = (R - T) x P x D
---------------
360
L = amount payable to the Administrative Agent for the accounts of the
Banks
R = interest rate on such Loan
T = yield to maturity of any readily marketable bond or other obligation
of the United States, selected at the Administrative Agent's sole
discretion, maturing on or near the last day of the then applicable
Interest Period of such Loan and in approximately the same amount as
such Loan
P = the amount of principal prepaid or the amount of the requested Loan
D = the number of days remaining in the Interest Period as of the date
of such payment or the number of days of the requested Interest Period
The Borrower shall pay such amount upon presentation by the Administrative Agent
of a statement setting forth the amount and the Administrative Agent's
calculation thereof (in reasonable detail) pursuant hereto, which statement
shall be deemed prima facia evidence of the amount owed.
2.16. Computation of Interest and Fees; Maximum Interest. Interest and
all fees payable hereunder on account of Base Rate Loans and Swingline Loans
(including the fees payable pursuant to Section 2.5.3) shall be computed daily
on the basis of a year of 365/366 days and paid for the actual number of days
for which due. Interest and all fees payable hereunder on account of LIBOR Rate
Loans and the fees payable pursuant to Section 2.5.2 shall be computed daily on
the basis of 360 days and paid for the actual number of days for which due. If
the due date for any payment of principal is extended by operation of law,
interest shall be payable for such extended time. If any payment required by
this Agreement becomes due on a day that is not a Business Day such payment may
be made on the next succeeding Business Day (subject to clause (i) of the
definition of Interest Period), and such extension shall be included in
computing interest in connection with such payment. Notwithstanding any other
term of this Agreement, the other Loan Documents or any other document referred
to herein or therein, the maximum amount of interest which may be charged to or
collected from any person liable hereunder or under other Loan Documents by any
Bank shall be absolutely limited to, and shall in no event exceed, the maximum
amount of interest which could lawfully be charged or collected under applicable
law (including, to the extent applicable, the provisions of Section 5197 of the
Revised Statutes of the United States of America, as amended, 12 U.S.C. Section
85, as amended), so that the maximum of all amounts constituting interest under
applicable law, howsoever computed, shall never exceed as to any Person liable
therefor such lawful maximum, and any term of this Agreement, the Letter of
Credit applications, the other Loan Documents or any other document referred to
herein or therein which could be construed as providing for interest in excess
of such lawful maximum shall be and hereby is made expressly subject to and
modified by the provisions of this paragraph.
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2.17. Letters of Credit.
(a) Upon the terms and subject to the conditions of this Agreement, and
in reliance upon the representations, warranties and covenants of the Borrower
made herein, each Issuing Bank agrees to issue, under the joint responsibilities
of the Banks, to the extent permitted by law and subject to the Uniform Custom
Practices of the International Chamber of Commerce governing Letters of Credit
(Publication No. 500 or any successor thereto), one or more Letters of Credit on
the application of and for the account of the Borrower, during the period from
the Closing Date to 30 days prior to the Revolving Credit Maturity Date;
provided that the Stated Amount of Letters of Credit outstanding at any time,
plus the aggregate amount of all unreimbursed draws under such outstanding
Letters of Credit, shall not at any time exceed the L/C Availability in effect
at such time; and provided, further that at the time the Borrower requests the
issuance of a Letter of Credit and after giving effect to the issuance thereof,
there has not occurred and is not continuing a Default or an Event of Default.
It is understood and agreed by the parties hereto that amounts drawn under such
Letters of Credit shall become immediately due and payable by the Borrower to
the Issuing Bank, for the ratable accounts of the Administrative Agent and the
Banks, and shall bear interest at the rate then applicable to Revolving Credit
Loans that are Base Rate Loans, and, if not paid forthwith, shall, (i) if there
is Availability, be added to the Loan Account as Revolving Credit Loans and
shall be immediately due and payable upon the Revolving Credit Maturity Date
(or, if earlier, upon acceleration of the Loans), and (ii) if there is
insufficient Availability, be immediately due and payable, bearing interest
until paid at the rate set forth in Section 2.14.
(b) To minimize the risk of issuance of any Letter of Credit
that would exceed the then-current L/C Availability, each Issuing Bank that is
not the Administrative Agent shall, prior to becoming an Issuing Bank, agree
with the Administrative Agent and the Borrower as to reporting and other
procedures to be followed by such Issuing Bank prior to and following the
issuance of each Letter of Credit, so as to minimize the risk of issuance of any
Letter of Credit that might exceed the then-current L/C Availability and to
permit the Administrative Agent to accurately ▇▇▇▇ the Borrower and account to
the Banks for Letter of Credit fees payable for the account of the Banks.
Notwithstanding the foregoing, the Borrower acknowledges that it is the
unconditional obligation of the Borrower to ensure that at no time shall any
Letter of Credit be drawn or outstanding that exceeds the then-current L/C
Availability.
(c) Upon the issuance of each Letter of Credit by the Issuing Bank,
each Bank shall be deemed to automatically have purchased a participation in
such Letter of Credit in accordance with its Commitment Percentage, and each
Bank severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage thereof, to
reimburse the Issuing Bank on demand for the amount of each draft paid by such
Issuing Bank under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant hereto. In addition, all Letters of Credit
shall, unless the Administrative Agent and the Banks otherwise agree in
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writing, have a stated expiration date not to exceed one year and shall, in any
event, expire not later than five (5) days prior to the Revolving Credit
Maturity Date.
(d) To evidence such Letters of Credit, the Borrower shall enter into,
with the Issuing Bank, the Administrative Agent and the Banks, such agreements
and execute such customary instruments and documents as the Issuing Bank, the
Administrative Agent and the Banks reasonably require, including, but not
limited to, a letter of credit application and agreement.
(e) The Carryover LCs shall be deemed to be Letters of Credit issued
pursuant to this Section 2.17 for all purposes of the Loan Documents (exclusive
of the payment of any fronting fee with respect thereto). It is anticipated that
the Carryover LCs will be replaced by Letters of Credit issued by the Issuing
Bank promptly after the Closing Date.
2.18. Letter of Credit Fees. A per annum Letter of Credit fee shall be
payable to the Administrative Agent, for the ratable accounts of the Banks, (a)
on each standby Letter of Credit at a rate per annum equal to the Applicable
LIBOR Margin applicable to Revolving Credit Loans then in effect multiplied by
the face amount of such Letter of Credit, and (b) on each documentary Letter of
Credit at a rate per annum equal to one-half of the Applicable LIBOR Margin
applicable to Revolving Credit Loans then in effect multiplied by the face
amount of such Letter of Credit. Such Letter of Credit fees for each Letter of
Credit shall be payable quarterly in arrears on the last Business Day of each
fiscal quarter. In addition, the Borrower shall pay to the Issuing Bank, solely
for the account of the Issuing Bank, such documentary issuing, processing,
amendment, negotiation fees for document examination, and other administrative
fees as are customarily charged by the Issuing Bank on Letters of Credit
(including, without limitation, a fronting fee of not more than 0.125%
multiplied by the face amount of the Letter of Credit payable on the issuance
thereof), which fees and charges shall be payable when required by such Issuing
Bank.
2.19. Extension of Revolving Credit Maturity Date.
(a) At least 30 days but not more than 60 days prior to the
Extension Date, the Borrower, by written notice to the Administrative Agent, may
request an extension of the Revolving Credit Maturity Date in effect at such
time by a period of one year from the date then in effect. The Borrower may, in
such notice, specify that the requested extension shall only be effective if at
least a minimum specified percentage (which may be 100% or any lesser amount
that is more than 60%) of the Total Commitment (such percentage, the "Minimum
Specified Percentage") becomes subject to the extended Revolving Credit Maturity
Date. If the Borrower fails to specify a Minimum Specified Percentage, the
Minimum Specified Percentage shall be deemed to be more than 60%. The
Administrative Agent shall promptly send each Bank a copy of such extension
request, and each Bank shall in turn, in its sole discretion, not later than the
Extension Date, notify the Borrower and the Administrative Agent in writing as
to whether such Bank will consent to such extension. If any Bank shall fail to
notify the Administrative Agent and the Borrower in writing of its consent to
any such request for
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extension of the Revolving Credit Maturity Date on or before the Extension Date,
such Bank shall be deemed to be a Non-Consenting Bank with respect to such
request. The Administrative Agent shall notify the Borrower on or prior to the
Extension Date of the decision of the Banks regarding the Borrower's request for
an extension of the Revolving Credit Maturity Date.
(b) If all the Banks consent in writing to such request in
accordance with subsection (a) of this Section 2.19, the Revolving Credit
Maturity Date in effect at such time shall, effective as at the Extension Date,
be extended for a period of one year, provided, however, that on the Extension
Date the applicable conditions set forth in Sections 3.1 and 3.2 shall be
satisfied. If fewer than all Banks consent in writing to any such request in
accordance with subsection (a) of this Section 2.19, subject to the requirements
of subsections (d) and (e) of this Section 2.19, the Revolving Credit Maturity
Date in effect at such time shall, effective as at the applicable Extension
Date, be extended as to those Banks that so consented (each a "Consenting Bank")
but shall not be extended as to any other Bank (each a "Non-Consenting Bank").
To the extent that the Revolving Credit Maturity Date is not extended as to any
Bank pursuant to this Section 2.19 and the Commitment of such Bank is not
assumed in accordance with subsection (c) of this Section 2.19 on or prior to
the applicable Extension Date, (i) the Commitment of such Non-Consenting Bank
shall remain in effect until, and shall automatically terminate in whole upon,
the original unextended Revolving Credit Maturity Date without any further
notice or other action by the Borrower, such Bank or any other person, and all
outstanding Loans and all accrued and unpaid interest, fees and other amounts,
due and payable hereunder to the Non-Consenting Banks shall be immediately paid
in full on the original unextended Revolving Credit Maturity Date, and (ii)
effective upon such termination, the Total Commitment shall be automatically
reduced to be equal to the remaining aggregate Commitments of the Consenting
Banks and the Assuming Banks; provided, however, that such Non-Consenting Bank's
rights under Section 2.10, 2.11 and 9.3, and its obligations under Section 8.10,
shall survive the Revolving Credit Maturity Date for such Bank as to matters
occurring prior to such date. It is understood and agreed that no Bank shall
have any obligation whatsoever to agree to any request made by the Borrower for
any extension of the Revolving Credit Maturity Date.
(c) If fewer than all of the Banks consent to a request
pursuant to subsection (a) of this Section 2.19, at the request of the Borrower
the Administrative Agent shall promptly so notify the Consenting Banks, and each
Consenting Bank may, at its sole discretion, give written notice to the
Administrative Agent within 10 days after the Extension Date of the amount, if
any, of the Non-Consenting Bank's Commitments for which it is willing to accept
an assignment. If the Consenting Banks notify the Administrative Agent that they
are willing to accept assignments of Commitments in an aggregate amount that
exceeds the amount of the aggregate Commitments of the Non-Consenting Banks,
such Commitments shall be allocated among the Consenting Banks willing to accept
such assignments in such amounts as are agreed between the Borrower and the
Administrative Agent. If after giving effect to the assignments of Commitments
described above there remain any Commitments of Non-Consenting Banks, the
Borrower
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may arrange for the assignment of such Commitments to one or more Eligible
Assignees that are reasonably acceptable to the Administrative Agent (each an
"Assuming Bank"), which, upon execution of an Assignment and Assumption shall,
effective as of the Extension Date, assume any Non-Consenting Bank's remaining
Commitment and all of the obligations of such Non-Consenting Bank under this
Agreement thereafter arising, without recourse to or warranty by, or expense to,
such Non-Consenting Bank; provided, however, that any assignment of a
Non-Consenting Bank's Commitment to a Consenting Bank or an Assuming Bank shall
be subject to the following conditions:
(1) any such Consenting Bank or Assuming Bank shall
have paid to such Non-Consenting Bank (A) the aggregate
principal amount of any interest accrued and unpaid to the
effective date of the assignment on the outstanding Loans, if
any, of such Non-Consenting Bank plus (B) any accrued but
unpaid Commitment Fees and Utilization Fees owing to such
Non-Consenting Bank as of the effective date of such
assignment;
(2) all additional cost reimbursements, expense
reimbursements and indemnities payable to such Non-Consenting
Bank and all other accrued and unpaid amounts owing to such
Non-Consenting Bank hereunder as of the effective date of such
assignment shall have been paid to such Non-Consenting Bank;
and
(3) with respect to any such Assuming Bank, the
applicable processing fee required under Section 9.10 for such
assignment shall have been paid to the Administrative Agent;
provided, further, that such Non-Consenting Bank's rights under Sections 2.10,
2.11 and 9.3, and its obligations under Section 8.10, shall survive such
substitution as to matters occurring prior to the date of substitution and any
Consenting Bank shall have delivered confirmation in writing satisfactory to the
Borrower and the Administrative Agent as to the increase in the amount of its
Revolving Credit Commitment. Upon the payment or prepayment of all amounts
referred to in clauses (1), (2) and (3) above, and subject to the requirements
of subsection (d) of this Section 2.19, each Consenting Bank or Assuming Bank,
as of the Extension Date, will be substituted for such Non-Consenting Bank under
this Agreement and shall be a Bank for all purposes of this Agreement, without
any further acknowledgment by or consent of the other Banks, and the obligations
of each such Non-Consenting Bank hereunder shall, by the provisions hereof, be
released and discharged.
(d) Subject to Section 2.19(e), if the Consenting Banks and
Assuming Banks have aggregate Commitment Amounts equal to at least the Minimum
Specified Percentage of the Total Commitment outstanding immediately prior to
the Extension Date (after giving effect to any assignments pursuant to
subsection (c) of this Section 2.19), the Administrative Agent shall so notify
the Borrower, and, so long as no Default or Event of Default shall have occurred
and be continuing as of such Extension Date, or shall occur as a consequence
thereof, the Revolving Credit Maturity Date then in effect
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shall be extended for the additional one-year period as described in subsection
(a) of this Section 2.19, and all references in this Agreement to the Revolving
Credit Maturity Date shall, with respect to each Consenting Bank and each
Assuming Bank, refer to the Revolving Credit Maturity Date as so extended.
Promptly following the Extension Date, the Administrative Agent shall notify the
Banks (including, without limitation, each Assuming Bank) of the extension, if
any, of the scheduled Revolving Credit Maturity Date in effect immediately prior
thereto and shall thereupon record the relevant information with respect to each
such Consenting Bank and each Assuming Bank.
(e) If fewer than all of the Banks consent to a request
pursuant to subsection (a) of this Section 2.19, the Borrower may elect to
withdraw such request and the originally scheduled Revolving Credit Maturity
Date shall remain unamended and in full force and effect. In addition, if the
Consenting Banks and Assuming Banks have Commitment Amounts equal to less than
the Minimum Specified Percentage, the Administrative Agent shall notify the
Borrower and the Banks that the conditions to the extension of the Revolving
Credit Maturity Date were not satisfied, and the originally scheduled Revolving
Credit Maturity Date shall remain unamended and in full force and effect.
2.20. Interdependence of Borrower Affiliated Group. In order to induce
each of the Banks to enter into this Agreement and the other Loan Documents to
which it is a party, and grant the Loans hereunder and issue the Letters of
Credit, the Borrower, on behalf of itself and each other member of the Borrower
Affiliated Group, and severally represents and warrants that:
(a) the business of each member of the Borrower Affiliated
Group shall benefit from the successful performance of the business of each
other member of the Borrower Affiliated Group, and the Borrower Affiliated Group
as a whole;
(b) each member of the Borrower Affiliated Group has
cooperated to the extent necessary and shall continue to cooperate with each
other member of the Borrower Affiliated Group to the extent necessary in the
development and conduct of each other member of the Borrower Affiliated Group's
business, and shall to the extent necessary share and participate in the
formulation of methods of operation, distribution, leasing, inventory control,
and other similar business matters essential to each member of the Borrower
Affiliated Group's business;
(c) the failure of any member of the Borrower Affiliated Group
to cooperate with all other members of the Borrower Affiliated Group in the
conduct of their respective businesses shall have an adverse impact on the
business of each other member of the Borrower Affiliated Group, and the failure
of any member of the Borrower Affiliated Group to associate or cooperate with
all other members of the Borrower Affiliated Group is reasonably likely to
impair the goodwill of such other members of Borrower Affiliated Group and the
Borrower Affiliated Group as a whole; and
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(d) each member of the Borrower Affiliated Group is accepting
joint and several liability for the Obligations on the terms and conditions set
forth in the Subsidiary Guaranty and represents and warrants that the financial
accommodations being provided hereby are for the mutual benefit, directly and
indirectly, of each member of the Borrower Affiliated Group.
2.21. Interest Rate Protection Agreements. No repayment or prepayment
arising on account of any change in the Total Commitment pursuant to Section
2.6, Section 2.7 or Section 2.12 shall affect any of the obligations of any
member of the Borrower Affiliated Group under any Interest Rate Protection
Agreement.
SECTION III
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Revolving Credit Loan. The
obligation of the Banks to make the initial Revolving Credit Loan and to issue
any Letter of Credit, and of the Swingline Lender to make any Swingline Loan, on
the Closing Date, is subject to the fulfillment on the Closing Date of each of
the following conditions precedent:
3.1.1. Loan Documents.
(i) Each of the Loan Documents shall have been duly and
properly authorized, executed and delivered by the respective parties thereto
and shall be in full force and effect on and as of the Closing Date.
(ii) Executed original counterparts of each of the Loan
Documents shall have been furnished to the Administrative Agent.
3.1.2. Legality of Transactions. No change in applicable law or
regulation shall have occurred as a consequence of which it shall have become
and continue to be unlawful for the Borrower, any other member of the Borrower
Affiliated Group, the Administrative Agent or any of the Banks to perform any of
their agreements or obligations under any of the Loan Documents to which they
are a party on the Closing Date.
3.1.3. Representations and Warranties. Each of the representations and
warranties made by or on behalf of the Borrower and each other member of the
Borrower Affiliated Group to the Administrative Agent and the Banks in this
Agreement or the other Loan Documents (a) shall be true and correct when made,
(b) shall, for all purposes of this Agreement, be deemed to be repeated on and
as of the Closing Date, and (c) shall be true and correct on and as of such
date.
3.1.4. Performance, Consents, No Defaults, Litigation, Etc. The
Borrower and each other member of the Borrower Affiliated Group shall have duly
and properly performed, complied with and observed each of its covenants,
agreements and
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obligations contained in any of the Loan Documents to which it is a party or by
which it is bound which are required to be performed, complied with or observed
on the Closing Date. All necessary consents and/or waivers in connection with
the consummation of the transactions contemplated by the Loan Documents shall
have been obtained by the Borrower and the other members of the Borrower
Affiliated Group and copies thereof shall have been delivered to the
Administrative Agent and the Banks. No event shall have occurred on or prior to
the Closing Date and be continuing on such Closing Date, and no condition shall
exist on such Closing Date, which constitutes a Default or an Event of Default.
No litigation or other proceeding, and no tax matter, ERISA matter or
Environmental Claim shall be continuing, or pending or threatened in writing,
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
3.1.5. Certified Copies of Charter Documents. The Administrative Agent
shall have received from each of the Borrower and the other members of the
Borrower Affiliated Group a copy, certified by a duly authorized officer of each
of the Borrower and such other members of the Borrower Affiliated Group to be
true and complete on the Closing Date, of (i) its charter or other formation
documents, as in effect on such date of certification, certified as of a recent
date by the Secretary of State of its jurisdiction of incorporation or
formation, and (ii) where applicable, its by-laws or limited liability company
agreement as in effect on such date.
3.1.6. Proof of Entity Action. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group a copy, certified by a duly authorized officer of each of the
Borrower and such other member of the Borrower Affiliated Group to be true and
complete on the Closing Date, of records of all corporate and other entity
action taken by each of the Borrower and such member of the Borrower Affiliated
Group to authorize, as applicable (i) its execution and delivery of the Loan
Documents to which it is or is to become a party, (ii) its performance of all of
its agreements and obligations under each of such documents, and (iii) any
borrowings and other transactions contemplated by this Agreement (including,
without limitation, the due authorization of any Increase which may become
effective pursuant to Section 2.7).
3.1.7. Incumbency Certificate. The Administrative Agent shall have
received from each of the Borrower and each other member of the Borrower
Affiliated Group an incumbency certificate, dated the Closing Date and signed by
the appropriate duly authorized officers of each of the Borrower and such other
member of the Borrower Affiliated Group, and giving the name and bearing a
specimen signature of each individual who shall be authorized, as applicable:
(i) to sign, in the name and on behalf of each of the Borrower and such other
member of the Borrower Affiliated Group, each of the Loan Documents to which it
is or is to become a party; (ii) to make application for the Loans or conversion
thereof; and (iii) to give notices or to take other action on its behalf under
the Loan Documents.
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3.1.8. Proceedings and Documents. All corporate, company, governmental
and other proceedings in connection with the transactions contemplated by the
Loan Documents and all instruments and documents incidental thereto, shall be in
form and substance reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of all such instruments and documents as the
Administrative Agent shall have reasonably requested.
3.1.9. Good Standing, Etc. The Administrative Agent shall have received
a long-form certificate of the Secretary of State of the respective
jurisdictions of formation of each of the Borrower and each other member of the
Borrower Affiliated Group as to each of the Borrower's and such other member of
the Borrower Affiliated Group's legal existence and good standing in such state
and listing all documents on file in the office of said Secretary of State. The
Administrative Agent shall also have received copies of certificates of
qualification to do business from any jurisdictions in which any of the Borrower
or any other member of the Borrower Affiliated Group is required to be
qualified, except in such jurisdictions where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
3.1.10. Fees. The Borrower shall have complied with its obligations
under Section 2.5 to pay the fees described in the Fee Letter, and the Borrower
shall have paid all reasonable legal fees and expenses and other reasonable fees
and expenses incurred by the Administrative Agent in connection with the
consummation of the transactions contemplated by this Agreement.
3.1.11. Legal Opinion. The Administrative Agent shall have received a
written legal opinion, addressed to the Administrative Agent and the Banks,
dated the Closing Date, from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
counsel to the Borrower Affiliated Group, in or substantially in the form of
Exhibit E hereto.
3.1.12. Financial Condition. The Administrative Agent and the Banks
shall be satisfied that there has been no material adverse change in the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower Affiliated Group taken as a whole since
February 2, 2002.
3.1.13. Security Documents; U.C.C. Search Reports; Insurance; Patents,
Trademarks and Copyrights. The Security Documents and the appropriate financing
statements (in the name of the Borrower and each other member of the Borrower
Affiliated Group) and other documents in respect thereto and necessary to enable
the Administrative Agent to perfect a legal, valid and enforceable
first-priority security interest thereunder for the benefit of the Banks, shall
have been duly executed by each of the Borrower and such other members of the
Borrower Affiliated Group, and filed or recorded, as applicable, in all
appropriate filing offices or other locations necessary for the perfection of
such first-priority interests, and all other actions necessary for the
perfection of such interests shall have been completed. The Administrative Agent
shall have received reports concerning the results of searches of the Patent and
Trademark
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Office and Uniform Commercial Code filing offices for the Borrower and each
other member of the Borrower Affiliated Group in each jurisdiction where
Collateral or other assets are located made no more than 30 days prior to the
Closing Date. The Administrative Agent shall have received the original stock
certificates (or other evidence of the applicable Equity Securities, if any),
together with stock powers (or the equivalent thereof) endorsed in blank, for
all of the issued and outstanding capital stock certificates (or other evidence
of the applicable Equity Securities, if any) of (x) each member of the Borrower
Affiliated Group except the Borrower and (y) the Affiliated Subsidiaries, to the
extent such stock certificates (or other Equity Securities, if any) is owned by
the Borrower. The Administrative Agent shall have received satisfactory evidence
that liability insurance and casualty insurance, including any insurance as is
required by the Security Documents to be in effect of each of the Borrower and
each other member of the Borrower Affiliated Group is in effect, and the
interest of the Administrative Agent as loss payee or additional insured, as its
interest may appear, has been duly endorsed upon all such instruments of
insurance. All such insurance shall provide for 30 days' advance written notice
to the Administrative Agent of any cancellation thereof.
3.1.14. Solvency. The Administrative Agent and the Banks shall have
received reasonably satisfactory evidence that the Borrower and each other
member of the Borrower Affiliated Group is solvent, and will be solvent after
giving effect to the Loans to be made hereunder on the Closing Date.
3.1.15. Payoff and Release Letter. The Administrative Agent shall have
received a payoff and release letter and, if applicable, related UCC-3 financing
statements or other discharges, in form and substance satisfactory to the
Administrative Agent and the Banks from The Chase Manhattan Bank (now known as
JPMorgan Chase Bank), as Administrative Agent, and neither the Borrower nor any
other member of the Borrower Affiliated Group shall have any outstanding
Indebtedness, other than as permitted by Section 6.1 (it being acknowledged that
in order to satisfy this condition the Borrower will use certain proceeds of the
Loans to repay in full on the Closing Date all outstanding amounts owing to The
Chase Manhattan Bank (now known as ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank), as Administrative
Agent, under its existing $850,000,000 credit facility with the Borrower and
certain of its Subsidiaries, and such facility shall be terminated on the
Closing Date).
3.2. Conditions Precedent to all Loans and Letters of Credit. The
obligation of the Swingline Lender to make each Swingline Loan and of each Bank
to make each Loan and issue each Letter of Credit, including the initial Loans,
or continue or convert Loans to Loans of the other type, is further subject to
the following conditions:
(a) timely receipt by the Administrative Agent and the Banks
of the Notice of Borrowing or Conversion as provided in Section 2.4(a);
(b) the representations and warranties contained in Section IV
shall be true and accurate in all material respects on and as of the date of
such Notice of Borrowing or Conversion and on the effective date of the making,
continuation or
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conversion of each Loan or issuance of such Letter of Credit as
though made at and as of each such date (except to the extent that such
representations and warranties expressly relate to an earlier date), and no
Default or Event of Default shall have occurred and be continuing, or would
result from such Loan or Letter of Credit;
(c) the resolutions referred to in Section 3.1.6 shall remain
in full force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Administrative
Agent or any Bank, would make it illegal or against the policy of any
governmental agency or authority for such Bank to make Loans or issue Letters of
Credit hereunder.
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the facts referred to in subsection (b) of
this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Banks to enter into
this Agreement and to make Loans and issue Letters of Credit hereunder, the
Borrower, on behalf of itself and each other member of the Borrower Affiliated
Group, represents and warrants to the Administrative Agent and each Bank that:
4.1. Organization and Qualification. The Borrower and each other member
of the Borrower Affiliated Group (a) is an entity duly incorporated, organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or other formation as indicated on Exhibit D
hereto, (b) has all requisite corporate, partnership, limited liability company
or other power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is duly qualified and in good standing as a
foreign corporation, foreign limited liability company, foreign limited
partnership or other entity and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect.
4.2. Entity Authority. The execution, delivery and performance of each
of the Loan Documents to which the Borrower or any other member of the Borrower
Affiliated Group is a party and the transactions contemplated hereby and thereby
are within the corporate, limited liability company, partnership or other power
and authority of the Borrower or such member of the Borrower Affiliated Group
and have been authorized by all necessary corporate or other entity proceedings,
and do not and will not (a) require any consent or approval of any creditors,
trustees for creditors, shareholders, members or
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partners of the Borrower or such member of the Borrower Affiliated Group (other
than any such consent that has been obtained prior to the Closing Date and
delivered to the Administrative Agent), (b) contravene any provision of the
charter documents, by-laws or other organizational documents of the Borrower or
such member of the Borrower Affiliated Group or any law, rule or regulation
applicable to the Borrower or such member of the Borrower Affiliated Group, (c)
contravene any provision of, or constitute an event of default or event that,
but for the requirement that time elapse or notice be given, or both, would
constitute an event of default under, any other agreement, instrument, order or
undertaking binding on the Borrower or such member of the Borrower Affiliated
Group other than those that could not reasonably be expected to have a Material
Adverse Effect, or (d) result in or require the imposition of any Encumbrance on
any of the properties, assets or rights of the Borrower or such member of the
Borrower Affiliated Group.
4.3. Valid Obligations. Each of the Loan Documents to which the
Borrower or any other member of the Borrower Affiliated Group is a party and all
of their respective terms and provisions are the legal, valid and binding
obligations of the Borrower or such member of the Borrower Affiliated Group
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and general principles of equity.
4.4. Consents or Approvals. The execution, delivery and performance of
each of the Loan Documents to which the Borrower or any other member of the
Borrower Affiliated Group is a party and the transactions contemplated herein
and therein do not require any approval or consent of, or filing or registration
with, any governmental or other agency or authority, or any other party, except
filings under the Uniform Commercial Code and with the Patent and Trademark
Office in connection with the Collateral.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and each other member of the Borrower Affiliated Group has good title to all of
the properties, assets and rights of every name and nature now purported to be
owned by it, including, without limitation, such properties, assets and rights
as are reflected in the most recent of the Initial Financial Statements (except
such properties, assets or rights as have been disposed of in the ordinary
course of business since the date thereof), free from all Encumbrances except
Permitted Encumbrances, and, except as so disclosed, free from all defects of
title that might have a Material Adverse Effect. All such properties and assets
and all properties which are leaseholds are free and clear of all material title
defects or objections, liens, claims, charges, security interests and other
Encumbrances of any nature whatsoever except Permitted Encumbrances, and are
not, in the case of real property, subject to any rights of way, building, use
or other restrictions, easements, exceptions, variances, reservations or
limitations of any nature whatsoever except, with respect to all such properties
and assets, (i) provisions of existing building and zoning laws, provided that
such provisions would not materially interfere with the Borrower's or any other
member of the Borrower Affiliated Group's use of such properties, (ii) liens for
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current taxes not yet due, (iii) as otherwise disclosed on Exhibit D hereto, and
(iv) other Permitted Encumbrances. The rights, properties and other assets
presently owned, leased or licensed by each of the Borrower and each other
member of the Borrower Affiliated Group and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
the Borrower and such member of the Borrower Affiliated Group to conduct its
businesses in all material respects in the same manner as its businesses have
been conducted prior to the date hereof. At the time the Borrower or any other
member of the Borrower Affiliated Group pledges, sells, assigns or transfers to
the Administrative Agent any instrument, document of title, security, chattel
paper or other property (including Accounts and Intellectual Property Rights) or
any proceeds or products thereof, or any interest therein, the Borrower or such
member of the Borrower Affiliated Group shall be the lawful owner thereof and
shall have good right to pledge, sell, assign or transfer the same; none of such
properties shall have been pledged, sold, assigned or transferred to any Person
other than the Administrative Agent or in any way encumbered; and the Borrower
or such member of the Borrower Affiliated Group shall defend the same against
the claims and demands of all Persons.
4.6. Material Contracts. As of the date of this Agreement, except as
set forth on Exhibit D, neither the Borrower nor any other member of the
Borrower Affiliated Group is a party to any contract, agreement or license which
is material to the operations or business of the Borrower or any other member of
the Borrower Affiliated Group.
4.7. Financial Statements. The Borrower has furnished to the
Administrative Agent and the Banks the Consolidated balance sheet of the
Borrower as of February 2, 2002 and the related Consolidated statements of
income, changes in stockholders' equity and cash flow of the Borrower for the
fiscal year ended February 2, 2002, and related footnotes, audited and certified
by BDO ▇▇▇▇▇▇▇ without qualification and prepared in accordance with GAAP (the
"Initial Financial Statements"). All the Initial Financial Statements were
prepared in accordance with GAAP and present fairly the Consolidated financial
position of the Borrower as of such dates and the Consolidated results of the
operations of the Borrower for such periods. There are no liabilities,
contingent or otherwise, not disclosed in any of the Initial Financial
Statements that involve a material amount.
4.8. Changes. Since the date of the Initial Financial Statements, no
Material Adverse Effect has occurred.
4.9. Defaults. No Default or Event of Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.
4.10. Taxes. Each of the Borrower and each other member of the Borrower
Affiliated Group has filed all federal, state and other tax returns required to
be filed, and all taxes, assessments and other governmental charges due from the
Borrower or such other member of the Borrower Affiliated Group have been fully
paid (other than any amount the validity of which is currently being contested
in good faith and with respect
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to which adequate reserves have been established therefor). Neither the Borrower
nor any other member of the Borrower Affiliated Group has executed any waiver of
limitations in respect of tax liabilities. Each member of the Borrower
Affiliated Group has established on its books reserves adequate for the payment
of all federal, state and other tax liabilities.
4.11. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, claim, proceeding or investigation pending or, to the
Borrower's knowledge, threatened against the Borrower or any other member of the
Borrower Affiliated Group that, individually or in the aggregate, if adversely
determined could reasonably be expected to have a Material Adverse Effect. With
respect to the matter set forth on Exhibit D hereto, since the date of this
Agreement, there has been no change in the status of such matter from what is
disclosed that could reasonably be expected to have a Material Adverse Effect.
4.12. Subsidiaries. As of the date of this Agreement, no member of the
Borrower Affiliated Group has any Subsidiaries except as set forth on Exhibit D
hereto with respect to each such member of the Borrower Affiliated Group. As of
the date of this Agreement, none of the Affiliated Subsidiaries has any
Subsidiaries, except as set forth on Exhibit D. As of the date of this
Agreement, no Inactive Subsidiary conducts any business, owns or leases any
assets or properties or has any material liability to any Person.
4.13. Investment Company Act. Neither the Borrower nor any other member
of the Borrower Affiliated Group is subject to regulation under the Investment
Company Act of l940, as amended.
4.14. Compliance with ERISA. Except as set forth in Exhibit D hereto,
each of the Borrower, each other member of the Borrower Affiliated Group, and
each member of the Controlled Group, have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the applicable provisions of
ERISA and the Code, and have not incurred any liability to the PBGC or a Plan
under Title IV of ERISA; and no Prohibited Transaction or Reportable Event has
occurred with respect to any Plan.
4.15. Environmental Matters. Except as specifically disclosed in
Exhibit D hereto, there are (a) no violations by any member of the Borrower
Affiliated Group of any Environmental Law, and (b) no Environmental Claims, in
either case, that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.16. Disclosure. No representations and warranties made by each member
of the Borrower Affiliated Group in this Agreement, any other Loan Document or
in any other agreement, instrument, document, certificate, statement or letter
furnished to the Administrative Agent, the Arranger, or the Banks by or on
behalf of any member of the Borrower Affiliated Group, and no other factual
information heretofore or
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contemporaneously furnished by or on behalf of any member of the Borrower
Affiliated Group to the Administrative Agent, the Arranger or the Banks, in
connection with any of the transactions contemplated by any of the Loan
Documents contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances in which they are made.
Except as disclosed herein or therein, there is no fact currently known to the
Borrower which could reasonably be expected to cause a Material Adverse Effect.
4.17. Solvency. Both before and after giving effect to all Indebtedness
incurred by the Borrower on the Closing Date, neither the Borrower nor any other
member of the Borrower Affiliated Group (i) is Insolvent, or will be rendered
Insolvent by the Indebtedness incurred in connection therewith, (ii) will be
left with unreasonably small capital with which to engage in its business, even
allowing for a reasonable margin of error in the projections of the future
performance of the Borrower and such other members of the Borrower Affiliated
Group, (iii) will have incurred Indebtedness beyond its ability to pay such
Indebtedness as it matures, or (iv) will fail to have assets (both tangible and
intangible) having a present fair salable value in excess of the amount required
to pay the probable liability on its then existing debts (whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent).
4.18. Compliance with Statutes, etc. Each of the Borrower and each
other member of the Borrower Affiliated Group is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except for such
non-compliances as could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect.
4.19. Capitalization. On and as of the Closing Date, the authorized
capital stock or other equity, and the number of issued and outstanding shares
of capital stock or other equity, of the Borrower, each other member of the
Borrower Affiliated Group and the Affiliated Subsidiaries is as described in
Exhibit D. All such outstanding shares of capital stock or other equity of the
Borrower, each other member of the Borrower Affiliated Group and the Affiliated
Subsidiaries have been duly and validly issued, in compliance with all legal
requirements relating to the authorization and issuance of shares of capital
stock or other equity, and are fully paid and non-assessable.
4.20. Labor Relations. Neither the Borrower nor any other member of the
Borrower Affiliated Group is engaged in any unfair labor practice in violation
of any applicable law or order of any court or governmental authority that could
reasonably be expected to have a Material Adverse Effect. Except as disclosed on
Exhibit D, there is (i) no unfair labor practice complaint pending or, to the
Borrower's knowledge, threatened against the Borrower or any other member of the
Borrower Affiliated Group before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any other member of
the Borrower Affiliated Group or, to the knowledge of the Borrower
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Affiliated Group, threatened against it, and (ii) no labor dispute, slowdown or
stoppage pending against the Borrower or any other member of the Borrower
Affiliated Group or, to the knowledge of the Borrower Affiliated Group,
threatened against the Borrower or any other member of the Borrower Affiliated
Group that individually or in the aggregate could reasonably be expected to
result in a Material Adverse Effect. To the knowledge of the Borrower, no union
representation question exists with respect to the employees of the Borrower or
any other member of the Borrower Affiliated Group and no union organizing
activities are taking place.
4.21. Certain Transactions. As of the date of this Agreement, except as
set forth on Exhibit D, none of the officers, partners, directors, or employees
of any member of the Borrower Affiliated Group is presently a party to any
transaction with any other member of the Borrower Affiliated Group (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, partner, director or such employee
or, to the knowledge of the Borrower Affiliated Group, any corporation,
partnership, trust or other entity in which any officer, partner, director, or
any such employee or natural person related to such officer, partner, director
or employee or other Person in which such officer, partner, director or employee
has a direct or indirect beneficial interest, has a substantial direct or
indirect beneficial interest or is an officer, director, trustee or partner.
4.22. Restrictions on the Borrower Affiliated Group. No member of the
Borrower Affiliated Group is a party to or bound by any contract, agreement or
instrument, or subject to any charter or other corporate restriction, that has
or could reasonably be expected to have a Material Adverse Effect.
4.23. Leases. Members of the Borrower Affiliated Group are tenants or
lessees under certain real property leases, occupancy agreements, assignments,
subleases or other similar agreements (herein individually referred to as a
"Lease" and collectively referred to as the "Leases"). The Borrower and the
other members of the Borrower Affiliated Group are party to such Leases as are
necessary to permit the Borrower and such other members of the Borrower
Affiliated Group to conduct their respective businesses in all material respects
in the same manner as their respective businesses have been conducted prior to
the date hereof. Neither the tenant (or lessee) nor, to the knowledge of the
Borrower, the landlord (or lessor), under any Lease is in default under the
applicable Lease or has given or received any notice of cancellation or
termination of such Lease or condemnation of the leased premises that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.24. Franchises, Patents, Copyrights, Etc. Except as otherwise set
forth on Exhibit D hereto, each of the Borrower and each other member of the
Borrower Affiliated Group possesses all franchises, patents, copyrights,
trademarks, tradenames, service marks, licenses and permits, and rights in
respect of the foregoing (collectively, "Intellectual Property Rights"),
adequate for the conduct of its business as substantially
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now conducted without known conflict with any rights of others and, in each
case, free of any Encumbrance that is not a Permitted Encumbrance. Without
limitation of the foregoing, the Borrower has the perpetual license to use the
name "▇▇▇▇▇▇ & ▇▇▇▇▇, Inc." in the operation of its business as currently
conducted without any conflict with any rights of others (the "B&N License").
4.25. Collateral. All of the Obligations of the Borrower Affiliated
Group to the Administrative Agent and the Banks under or in respect of the Loan
Documents will, at all times from and after the execution and delivery of each
of the Security Documents, be entitled to the benefits of and be secured by each
of such Security Documents to the extent provided therein.
4.26. Senior Debt. All of the Obligations of the Borrower Affiliated
Group to the Administrative Agent and the Banks under or in respect of the Loan
Documents constitute "Senior Indebtedness" and "Designated Senior Indebtedness"
under the Senior Subordinated Debt.
SECTION V
AFFIRMATIVE COVENANTS
So long as any Bank has any commitment to make Loans or issue Letters
of Credit hereunder or any Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows on behalf of itself and each
other member of the Borrower Affiliated Group:
5.1. Financial Statements and other Reporting Requirements. The
Borrower shall furnish to the Administrative Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower Affiliated Group, a
Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, such
year, prepared in accordance with GAAP and audited and certified without
qualification by BDO ▇▇▇▇▇▇▇, or a "Big Five" accounting firm, or another
nationally recognized accounting firm reasonably acceptable to the
Administrative Agent;
(b) as soon as available, but in any event within 45 days
after the end of each fiscal quarter of the Borrower Affiliated Group, a
Consolidated balance sheet as of the end of, and a related Consolidated
statement of income, changes in stockholders' equity and cash flow for, the
portion of the fiscal year then ended and for the fiscal quarter then ended,
prepared in accordance with GAAP (without footnotes) and certified by the chief
financial officer of the Borrower, but subject, however, to normal, recurring
year-end adjustments that shall not in the aggregate be materially adverse;
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(c) concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.l, a report in
substantially the form of Exhibit F hereto signed on behalf of the Borrower
Affiliated Group by the chief financial officer of the Borrower, and including,
without limitation, computations in reasonable detail evidencing compliance with
the covenants contained in Sections 6.5 through 6.8 hereof, inclusive, and a
representation by such officer that no Default or Event of Default has occurred
or is continuing;
(d) promptly upon the filing thereof, copies of all
registration statements, proxy statements and annual, quarterly, monthly or
other reports which the Borrower or any other member of the Borrower Affiliated
Group files with the Securities and Exchange Commission (including without
limitation, copies of all reports on Form 8-K that the Borrower files with the
Securities and Exchange Commission);
(e) if and when the Borrower or any other member of the
Borrower Affiliated Group gives or is required to give notice to the PBGC of any
Reportable Event with respect to any Plan that might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that any member of
the Controlled Group or the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC or, if such
notice is not given to the PBGC, a description of the content of the notice that
would be required to be given;
(f) immediately upon becoming aware of the existence of any
condition or event (i) that constitutes a Default or Event of Default, or (ii)
affecting the Borrower or any other member of the Borrower Affiliated Group
which could reasonably be expected to have a Material Adverse Effect, written
notice thereof specifying the nature thereof and the action being or proposed to
be taken with respect thereto; and immediately upon receipt thereof, copies of
any notice (whether formal or informal) of any cancellation, termination or
material change in any insurance maintained by any member of the Borrower
Affiliated Group;
(g) promptly upon becoming aware of any litigation or of any
investigative proceedings by any Person, including, without limitation, any
governmental agency or authority commenced or threatened against the Borrower or
any other member of the Borrower Affiliated Group of which it has notice, or of
a material change in any such existing litigation or proceedings, the outcome of
which could reasonably be expected to have a Material Adverse Effect, written
notice thereof and the action being or proposed to be taken with respect
thereto;
(h) promptly upon becoming aware of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any other member of the Borrower Affiliated Group
regarding any potential violation of Environmental Laws or any spill, release,
discharge or disposal of any Hazardous Material, in either case, the outcome of
which could have a Material Adverse Effect, written notice thereof, copies of
all correspondence, reports and other materials furnished
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to or prepared by any member of the Borrower Affiliated Group (or its
representatives) in connection therewith and the action being or proposed to be
taken with respect thereto;
(i) at least 30 days' prior written notice of any change in
its name or corporate form or state or organization or any change in the name or
names under which the Borrower's or any other member of the Borrower Affiliated
Group's business is transacted; and, without prejudice to Sections 5.2(d) and
(e) or the requirements of a Permitted Acquisition, promptly after the formation
or acquisition thereof, but in no event less frequently than quarterly, a list
of all new Subsidiaries of the Borrower or any of its Subsidiaries; and promptly
after entering into any contract, agreement or license which is material to the
operations or business of the Borrower or any other member of the Borrower
Affiliated Group, but in no event less frequently than quarterly, a list of such
new contracts, agreements and licenses;
(j) from time to time, with reasonable promptness, such other
financial data and other information or documents (financial or non-financial)
about the Borrower and each other member of the Borrower Affiliated Group
(including accountants' management letters) as the Administrative Agent or any
Bank (through the Administrative Agent) may reasonably request.
5.2. Conduct of Business. The Borrower shall, and shall cause each
other member of the Borrower Affiliated Group to:
(a) duly observe and comply in all material respects with all
applicable laws and requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect the B&N License
and all other licenses and permits necessary in any material respect to the
proper conduct of its business except where any such failure to keep such other
licenses and permits could not reasonably be expected to have a Material Adverse
Effect;
(b) maintain its corporate existence, except as permitted
under Section 6.4(b);
(c) remain engaged in substantially the same lines of business
as those in which it is now engaged, except that the Borrower or any other
member of the Borrower Affiliated Group may withdraw from any business activity
which its Board of Directors reasonably deems unprofitable or unsound, provided
that promptly after such withdrawal, the Borrower shall provide the
Administrative Agent with written notice thereof;
(d) no more than 10 Business Days after forming or acquiring
any wholly-owned Domestic Subsidiary, deliver to the Administrative Agent such
Subsidiary's agreement, in each case reasonably satisfactory to counsel for the
Administrative Agent, that the Subsidiary shall be a member of the Borrower
Affiliated
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Group, and shall be bound by the terms of this Agreement, the other Security
Documents and the related documents, opinions and instruments as a guarantor or
otherwise as the Administrative Agent may determine in its sole discretion.
Without limiting the foregoing, each such wholly-owned Domestic Subsidiary shall
deliver to the Administrative Agent a Subsidiary Guaranty in the form of Exhibit
H, and the Borrower or other equityholders of such Domestic Subsidiary shall
deliver to the Administrative Agent a Pledge Agreement in the form of Exhibit I;
(e) no more than 10 Business Days after forming or acquiring
any less than wholly-owned Subsidiary, any Foreign Subsidiary or a minority
interest in any Person, deliver to the Administrative Agent a Pledge Agreement
in the form of Exhibit I relating to pledging the equity of the Borrower
Affiliated Group in such new Subsidiary, Foreign Subsidiary or minority-owned
Person (provided that only 65% of any Foreign Subsidiary shall be required to be
pledged); and
(f) no Inactive Subsidiary shall (i) engage in any business,
(ii) own or lease any assets, or (iii) incur any material liabilities to any
Person without at least 30 days prior written notice to the Administrative Agent
and compliance with the provisions of clauses (d) and/or (e) of this Section
5.2.
5.3. Maintenance of Properties and Insurance. The Borrower shall, and
shall cause each other member of the Borrower Affiliated Group to, maintain its
properties in good repair, working order and condition (normal wear and tear
excepted) as required for the normal conduct of its business and from time to
time the Borrower will make or cause to be made, and cause each other member of
the Borrower Affiliated Group to make or cause to be made, all necessary and
proper repairs, renewals, replacements, additions and improvements thereto so
that the Borrower and such other members of the Borrower Affiliated Group may
conduct their business substantially as conducted on the Closing Date and shall
maintain or cause to be maintained all material Leases as may be required for
the conduct of the Borrower's and each other member of the Borrower Affiliated
Group's business. The Borrower shall and shall cause each other member of the
Borrower Affiliated Group to at all times maintain liability and casualty
insurance with financially sound and reputable insurers in such amounts as the
officers of the Borrower and such other member of the Borrower Affiliated Group
in the exercise of their reasonable judgment deem to be adequate. The
Administrative Agent shall be named as loss payee and additional insured, as its
interest may appear, and shall be given 30 days' prior written notice of any
cancellation or modification of such insurance. If the Borrower or any other
member of the Borrower Affiliated Group fails to provide such insurance, the
Administrative Agent, in its sole discretion, may provide such insurance and
charge the cost thereof to the Loan Account or to the Borrower's or any such
other member of the Borrower Affiliated Group's deposit account with the
Administrative Agent. Any payment not recovered from the Borrower or any other
member of the Borrower Affiliated Group shall bear interest at the Base Rate
plus the Applicable Base Rate Margin then in effect applicable to Revolving
Credit Loans. The Administrative Agent shall not, by the fact of approving,
disapproving, accepting, obtaining or failing to obtain any such insurance,
incur liability for the form or legal sufficiency of insurance
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contracts, solvency of insurance companies or payment of lawsuits, and the
Borrower and each other member of the Borrower Affiliated Group hereby expressly
assumes full responsibility therefor and liability, if any, thereunder. The
Borrower shall, and shall cause each other member of the Borrower Affiliated
Group to, furnish to the Administrative Agent certificates or other evidence
satisfactory to the Administrative Agent of compliance with the foregoing
insurance provisions. The provisions of this Section 5.3 shall be deemed to be
supplemental to, but not duplicative of, the provisions of any of the Security
Documents that require the maintenance of insurance.
5.4. Taxes. The Borrower shall, and shall cause each other member of
the Borrower Affiliated Group to, pay or cause to be paid all taxes, assessments
or governmental charges on or against it or its properties on or prior to the
time when they become due; provided that this covenant shall not apply to any
tax, assessment or charge that is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with GAAP if no lien shall have been
filed to secure such tax, assessment or charge.
5.5. Inspection by the Administrative Agent. The Borrower shall, and
shall cause each other member of the Borrower Affiliated Group to, permit the
Banks, through the Administrative Agent or the Administrative Agent's designee,
at any time and from time to time in the Administrative Agent's reasonable
discretion during regular business hours upon reasonable advance notice, to (i)
visit and inspect the properties of the Borrower and such other members of the
Borrower Affiliated Group, and (ii) discuss the affairs, finances and accounts
of the Borrower and such other members of the Borrower Affiliated Group with its
appropriate officers, employees and accountants, provided that when an Event of
Default has occurred and is continuing the Administrative Agent may do any of
the foregoing at any time during normal business hours and without reasonable
advance notice. In handling such information the Administrative Agent and the
Banks shall exercise the same degree of care that each exercises with respect to
its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received, except that
disclosure of such information may be made (w) to the subsidiaries or affiliates
of the Arranger, the Administrative Agent and each Bank in connection with their
present or prospective business relations with the Borrower Affiliated Group,
(x) to prospective transferees or purchasers of an interest in the Loans, (y) as
required by law, regulation, rule or order, subpoena, judicial order or similar
order and (z) as may be required in connection with the examination, audit or
similar investigation of the Arranger, the Administrative Agent or any Bank, and
provided, however, that in the case of any disclosure made under clauses (w) or
(x), the Person to whom such disclosure is made shall agree to be subject to the
same degree of care and confidentiality required of the Administrative Agent,
the Banks and their representatives hereunder.
5.6. Maintenance of Books and Records. The Borrower shall, and shall
cause each other member of the Borrower Affiliated Group to, keep adequate books
and records of account, in which true and complete entries will be made
reflecting all of its business
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and financial transactions, and such entries will be made in accordance with
GAAP and applicable law.
5.7. Use of Proceeds. The proceeds of the Loans will be used by the
Borrower to repay in full the Borrower's obligations for borrowed money and
related fees and expenses under its existing credit agreement with The Chase
Manhattan Bank (now known as ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank), as Administrative Agent,
dated November 18, 1997, and to finance ongoing working capital needs of the
Borrower Affiliated Group and for general corporate purposes for the Borrower
Affiliated Group. No portion of any Loans shall be used for the purpose of
purchasing or carrying any "margin security" or "margin stock" as such terms are
used in Regulations U or X of the Board of Governors of the Federal Reserve
System.
5.8. Pension Plans. With respect to any Plan, the benefits under which
are guaranteed, in whole or in part, by the PBGC or any governmental authority
succeeding to any or all of the functions of the PBGC, the Borrower will, and
will cause each other member of the Borrower Affiliated Group to, (i) fund each
Plan as required by the provisions of Section 412 of the Code; (ii) cause each
Plan to pay all benefits when due; and (iii) furnish the Administrative Agent
(a) promptly with a copy of any notice of each Plan's termination sent to the
PBGC and (b) no later than the date of submission to the Department of Labor or
to the Internal Revenue Service, as the case may be, a copy of any request for
waiver from the funding standards or extension of the amortization periods
required by Section 412 of the Code.
5.9. Fiscal Year. Each of the Borrower and each other member of the
Borrower Affiliated Group shall have a fiscal year ending on the Saturday
closest to January 31 of each year and shall notify the Administrative Agent of
any change in such fiscal year (whereupon, notwithstanding the provisions of
Section 9.8, the Administrative Agent and the Banks shall have the right to
modify the timing of the financial covenants hereunder accordingly in order to
correspond to any such change in fiscal year).
5.10. Further Assurances. At any time and from time to time the
Borrower shall, and shall cause each other member of the Borrower Affiliated
Group to, execute and deliver such further instruments and take such further
action as may reasonably be requested by the Administrative Agent or any Bank
(through the Administrative Agent) to effect the purposes of the Loan Documents
and the Security Documents.
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SECTION VI
NEGATIVE COVENANTS
So long as any Bank has any commitment to make Loans and issue Letters
of Credit hereunder or any Loan or other Obligation hereunder remains
outstanding, the Borrower covenants as follows on behalf of itself and each
other member of the Borrower Affiliated Group:
6.1. Indebtedness. The Borrower shall not, and shall not permit any
other member of the Borrower Affiliated Group to, create, incur, assume,
guaranty or be or remain liable with respect to any Indebtedness other than the
following:
(a) Indebtedness of the Borrower to the Administrative Agent
or the Banks under any Loan Document and Guaranties of other members of the
Borrower Affiliated Group in favor of the Administrative Agent or the Banks
under any Loan Document;
(b) [Reserved];
(c) Indebtedness in respect of Capitalized Leases and purchase
money security interests of the Borrower Affiliated Group representing
obligations permitted to be incurred by the terms of this Agreement and incurred
in the ordinary course of business and consistent with past practices; provided,
that the aggregate principal amount of Indebtedness permitted by this clause (c)
shall not exceed $65,000,000 at any one time outstanding;
(d) Indebtedness existing on the date of this Agreement and
disclosed on Exhibit C hereto and any refinancings, refundings, renewals or
extensions thereof (provided the principal amount of any such Indebtedness is
not thereby increased);
(e) Indebtedness secured by Encumbrances permitted by Section
6.3(b);
(f) Indebtedness of members of the Borrower Affiliated Group
which are Domestic Subsidiaries to the Borrower or to other Domestic
Subsidiaries of the Borrower which are members of the Borrower Affiliated Group;
Guaranties by any member of the Borrower Affiliated Group of the obligations of
any other member of the Borrower Affiliated Group, so long as such obligations
are permitted hereunder;
(g) The Senior Subordinated Debt, provided that the principal
amount thereof at no time exceeds $300,000,000, and any refinancings,
refundings, renewals or extensions thereof (provided the principal amount of any
such Indebtedness is not thereby increased, and the subordination provisions in
effect thereunder on the Closing Date continue to govern such Senior
Subordinated Debt);
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(h) Other unsecured Indebtedness of the Borrower, provided
that (i) the principal amount thereof at no time exceeds $300,000,000, (ii) all
such Indebtedness is subordinated to the Obligations on no less favorable
subordination terms (and amendment provisions relating to such subordination
terms) as those contained in the Senior Subordinated Debt, (iii) upon the
issuance of any such subordinated Indebtedness, the ratio of the Borrower
Affiliated Group's Consolidated Total Funded Debt to EBITDA (as tested as of the
end of the most recently completed fiscal quarter of the Borrower, as adjusted
for such subordinated Indebtedness, and evidenced by a compliance certificate of
the Borrower provided to the Administrative Agent) shall not exceed 2.50 to 1.0,
and (iv) upon the issuance of any such subordinated Indebtedness, the Cash Flow
Leverage Ratio of the Borrower Affiliated Group (as tested as of the end of the
most recently completed fiscal quarter of the Borrower, as adjusted for such
subordinated Indebtedness, and evidenced by a compliance certificate of the
Borrower provided to the Administrative Agent) shall not exceed (x) if the
principal amount of such additional subordinated Indebtedness is less than or
equal to $100,000,000, 1.25 to 1.0, (y) if the principal amount of such
additional subordinated Indebtedness is less than or equal to $200,000,000 but
greater than $100,000,000, 1.00 to 1.0, and (z) if the principal amount of such
additional subordinated Indebtedness is less than or equal to $300,000,000 but
greater than $200,000,000, 0.75 to 1.0 (any such Indebtedness hereafter referred
to as the "Additional Subordinated Debt");
(i) Other Indebtedness of the Borrower (including Guaranties
by the Borrower of Indebtedness of Foreign Subsidiaries) not secured by any
Encumbrances and in an aggregate principal amount not exceeding $100,000,000;
and
(j) Unsecured Indebtedness incurred in connection with
permitted Interest Rate Protection Agreements, provided that such Indebtedness
may be secured by the Collateral to the extent provided by the Loan Documents.
6.2. Sale and Leaseback. The Borrower shall not, nor shall it permit
any other member of the Borrower Affiliated Group to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property owned by it in order to lease such property or lease other property
that the Borrower or such other member of the Borrower Affiliated Group intends
to use for substantially the same purpose as the property being sold or
transferred, in excess of $25,000,000 in any fiscal year.
6.3. Encumbrances. The Borrower shall not, and shall not permit any
other member of the Borrower Affiliated Group to, create, incur, assume or
suffer to exist any mortgage, pledge, security interest, lien or other charge or
encumbrance, including the lien or retained security title of a conditional
vendor (by way of consignment or otherwise) upon or with respect to any of its
property or assets ("Encumbrances"), or assign or otherwise convey any right to
receive income, including the sale or discount of Accounts Receivable with or
without recourse, except the following ("Permitted Encumbrances"):
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(a) Encumbrances in favor of the Administrative Agent or the
Banks under any Security Document;
(b) Encumbrances existing on the date of this Agreement and
disclosed in Exhibit C hereto;
(c) Liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(d) Possessory liens in favor of brokers and dealers arising
in connection with the acquisition or disposition of Investments owned as of the
date hereof and Qualified Investments, provided that such liens (a) attach only
to such Investments and (b) secure only obligations incurred in the ordinary
course and arising in connection with the acquisition or disposition of such
Investments and not any obligation in connection with margin financing;
(e) Landlords' and lessors' liens in respect of rent not in
default, or liens in respect of pledges or deposits under worker's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers', carriers', warehousemans', materialmen's and similar
liens, if the obligations secured by such liens are not then delinquent; liens
securing the performance of bids, tenders, contracts (other than for the payment
of money); and statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incidental to the conduct of its business
and that do not in the aggregate materially detract from the value of its
property or materially impair the use thereof in the operation of its business;
(f) Judgment liens that shall not have been in existence for a
period longer than 45 days after the creation thereof or, if a stay of execution
shall have been obtained, for a period longer than 45 days after the expiration
of such stay;
(g) Easements, rights of way, zoning restrictions, licenses,
restrictions on the use of property or minor imperfections in title thereto
which, in the aggregate, do not interfere in a material way with the ordinary
conduct of its business;
(h) Security interests and liens securing Indebtedness of the
Borrower Affiliated Group permitted by Section 6.1(c) in an amount not to exceed
$65,000,000 in the aggregate outstanding at any time in addition to those
Encumbrances permitted under subsection (a) through (f) of this Section,
provided, however, that (A) each such Encumbrance is given solely to secure the
purchase price of, or the lease obligations relating to, such asset, does not
extend to any other property, and is given at the time or within 30 days of the
acquisition of such asset, and (B) the Indebtedness secured thereby does not
exceed the lesser of the cost of such asset or its fair market value at the time
such security interest attaches; and provided, further, that the Indebtedness
secured
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pursuant to this clause (h), together with any Indebtedness secured pursuant to
clause (j) below, does not at any time exceed $65,000,000;
(i) Security interests in favor of the issuer of any
documentary letters of credit for the account of the Borrower covering only the
following: (i) any documentation presented in connection with a drawing under
such letter of credit, (ii) all goods which are described in such documents or
any such letter of credit, and (iii) the proceeds thereof;
(j) Encumbrances upon real property or other fixed assets
acquired after the date hereof (by purchase, construction or otherwise) by the
Borrower or any other member of the Borrower Affiliated Group, each of which
Encumbrance was created solely for the purpose of securing Indebtedness
permitted under Section 6.1(c) and representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of such
property or asset; provided that (i) no such Encumbrance shall extend to cover
any property or asset of the Borrower or such member of the Borrower Affiliated
Group other than the property or asset so acquired and improvements thereon,
(ii) the principal amount of Indebtedness secured by any such Encumbrance shall
not exceed 100% of the lesser of the cost of such asset or its fair market value
(as determined in good faith by a senior financial officer of the Borrower) of
such property or asset at the time it was acquired (by purchase, construction or
otherwise), and (iii) the security interest is given at the time or within 60
days of the construction or acquisition of such property or asset; and provided,
further, that the Indebtedness secured pursuant to this clause (j), together
with any Indebtedness secured pursuant to clause (h) above, does not at any time
exceed $65,000,000;
(k) Encumbrances in connection with any sale-leasebacks
permitted by Section 6.2; provided that no such Encumbrance shall extend to
cover any property or asset of the Borrower or such member of the Borrower
Affiliated Group other than the lease entered into in connection with any such
sale-leaseback; and
(l) Any extension, renewal or replacement of the foregoing;
provided that the Encumbrances permitted by this paragraph (l) shall not extend
to or cover any additional Indebtedness or property (other than a substitution
of like property).
In addition, the Borrower shall not, nor shall the Borrower permit any
other member of the Borrower Affiliated Group or any of its other Subsidiaries
to, enter into or permit to exist any arrangement or agreement which directly or
indirectly prohibits the Borrower or any such other member of the Borrower
Affiliated Group or Subsidiary from creating or incurring any Encumbrance in
favor of the Administrative Agent for the benefit of the Banks and the
Administrative Agent under the Loan Documents.
6.4. Merger; Consolidation; Sale or Lease of Assets; Acquisitions. The
Borrower shall not, nor shall permit any other member of the Borrower Affiliated
Group to,
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(a) sell, lease or otherwise dispose of assets or properties
(valued at the lower of cost or fair market value with respect to all permitted
sales described in this clause (a)), other than (i) sales of inventory in the
ordinary course of business, (ii) sales of assets not in the ordinary course of
business including, without limitation, sales or dispositions of obsolete or
worn out property, tools or equipment no longer used or useful in its business
in an aggregate amount not to exceed $35,000,000 in any fiscal year of the
Borrower Affiliated Group, (iii) sales of any Qualified Investments described in
clauses (i) through (iv) or clause (x) of the definition thereof, and (iv) sales
of (x) any Subsidiary of the Borrower acquired by the Borrower after the Closing
Date and (y) any Affiliated Subsidiary, provided that the Net Proceeds of any
such sales under this Section 6.4(a) are immediately paid to the Administrative
Agent for application to the Loans in accordance with (and to the extent
required by) Section 2.12(c) (it being agreed by the Administrative Agent and
the Banks that any lien in their favor on the Equity Securities in or other
assets of any such Subsidiary being sold, and any guaranty by any such
Subsidiary of any of the Obligations, will be released in connection with such
sales); or
(b) liquidate, merge or consolidate into or with any other
Person or enter into or undertake any plan or agreement of liquidation, merger
or consolidation with any other Person, provided that (i) the Borrower may merge
with another company in connection with a Permitted Acquisition if the Borrower
is the surviving company, (ii) any wholly-owned Subsidiary of the Borrower may
merge or consolidate into or with the Borrower or any other wholly-owned
Subsidiary of the Borrower if no Default or Event of Default has occurred and is
continuing or would result from such merger and if the Borrower or such
Subsidiary is the surviving company, and (iii) a Subsidiary of the Borrower may
merge into another entity in connection with a Permitted Acquisition if, upon
consummation of such merger, the surviving entity shall be a direct or indirect
wholly-owned Subsidiary of the Borrower and, if the surviving entity is a
Domestic Subsidiary, a party to the Subsidiary Security Documents; or
(c) make any acquisition of (i) all or substantially all of
the assets of another Person, or of a division or business unit of a Person or
(ii) assets out of the ordinary course of business, in each case except in
connection with a Permitted Acquisition.
6.5. Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit
the Fixed Charge Coverage Ratio of the Borrower Affiliated Group, determined as
at the last day of any fiscal quarter for the twelve-month period then ended, to
be less than the ratio of 1.6 to 1.0.
6.6. Maximum Cash Flow Leverage Ratio. During any period of time that
no Additional Subordinated Debt is outstanding, the Borrower shall not permit
the Cash Flow Leverage Ratio of the Borrower Affiliated Group, determined as at
the last day of each fiscal quarter, to be greater than the ratio of 1.5 to 1.0
for the twelve-month period then ended.
6.6A. Maximum Adjusted Cash Flow Leverage Ratio. During any period of
time that any Additional Subordinated Debt is outstanding, the Borrower shall
not permit
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the Cash Flow Leverage Ratio of the Borrower Affiliated Group, determined as at
the last day of each fiscal quarter for the twelve-month period then ended, to
be greater than the ratio of (x) if the principal amount of such additional
subordinated Indebtedness is less than or equal to $100,000,000, 1.25 to 1.0,
(y) if the principal amount of such additional subordinated Indebtedness is less
than or equal to $200,000,000 but greater than $100,000,000, 1.00 to 1.0, and
(z) if the principal amount of such additional subordinated Indebtedness is less
than or equal to $300,000,000 but greater than $200,000,000, 0.75 to 1.0.
6.6B. Maximum Ratio of Consolidated Total Funded Debt to EBITDA. During
any period of time that any Additional Subordinated Debt is outstanding, the
Borrower shall not permit the ratio of the Borrower Affiliated Group's
Consolidated Total Funded Debt to the Consolidated EBITDA of the Borrower
Affiliated Group, determined as at the last day of each fiscal quarter for the
twelve-month period then ended, to be greater than 2.50 to 1.0.
6.7. Maximum Total Funded Debt to Total Capitalization. The Borrower
shall not permit its Consolidated Total Funded Debt to be greater than 60% of
its Total Capitalization, determined as at the last day of any fiscal quarter.
6.8. Maximum Capital Expenditures. The Borrower Affiliated Group shall
not make Capital Expenditures in an aggregate amount in any fiscal year
exceeding the sum of $190,000,000.
6.9. Restricted Payments. The Borrower shall not, and shall not permit
any other member of the Borrower Affiliated Group to, pay, make or declare any
Restricted Payment. Notwithstanding the foregoing, (a) the Borrower's
Subsidiaries may from time to time make distributions to the Borrower and other
members of the Borrower Affiliated Group, and (b) the Borrower may effect
redemptions and repurchases of its stock and pay dividends to its stockholders,
provided that, with respect to this clause (b), (x) no Default or Event of
Default has occurred or is continuing, both before and after giving effect to
any such distributions, dividends, redemptions, repurchases and payments, and
(y) the cumulative aggregate amount of redemptions and repurchases made from and
after the Closing Date, shall not exceed, when made, an aggregate amount equal
to the sum of $50,000,000 plus 25% of the Borrower's Cumulative Excess Cash
Flow. Neither the Borrower nor any other member of the Borrower Affiliated Group
will enter into any agreement, contract or arrangement (other than the Loan
Documents) restricting the ability of any Subsidiary of the Borrower or any
other member of the Borrower Affiliated Group (other than the Borrower) to pay
or make dividends or distributions in cash or kind, to make loans, advances or
other payments of any nature or to make transfers or distributions of all or any
part of its assets to the Borrower or any other member of the Borrower
Affiliated Group.
6.10. Investments. The Borrower shall not, nor shall permit any other
member of the Borrower Affiliated Group to, make or maintain any Investments
other than Qualified Investments.
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6.11. ERISA. Neither the Borrower nor any member of the Controlled
Group shall permit any Plan maintained by it to (i) engage in any Prohibited
Transaction, (ii) incur any "accumulated funding deficiency" (as defined in
Section 302 of ERISA) whether or not waived, or (iii) terminate any Plan in a
manner that could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any other member of the Borrower Affiliated Group
pursuant to Section 4068 of ERISA, but only to the extent any of the foregoing
could reasonably be expected to result in a liability to the Borrower or any
other member of the Borrower Affiliated Group in excess of $10,000,000.
6.12. Transactions with Affiliates. Other than those set forth in
Exhibit D hereto, the Borrower shall not, nor shall permit any other member of
the Borrower Affiliated Group to, enter into or participate in any agreements or
transactions of any kind with any Affiliate, except (i) agreements or
transactions contemplated, required or allowed by any Loan Document as in effect
on the date of this Agreement, provided that such agreements or transactions are
not otherwise prohibited by this Agreement or any of the Loan Documents; (ii)
agreements or transactions (in each case) in the ordinary course of business and
on an arms-length basis which (A) include only terms which are fair and
equitable to the Borrower or such other member of the Borrower Affiliated Group,
(B) do not violate or otherwise conflict with any of the terms of any of the
Loan Documents, and (C) involve terms no less favorable to the Borrower or such
other member of the Borrower Affiliated Group than would be the terms of a
similar agreement or transaction with any Person other than an Affiliate; and
(iii) the loans permitted by Section 6.13.
6.13. Loans. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, make to any Person any loan, advance
or other transfer with the anticipation of repayment, except for loans and
advances to employees of the Borrower or such other member of the Borrower
Affiliated Group, made in the ordinary course of business and consistent with
past practices, not exceeding $5,000,000 in the aggregate at any time
outstanding.
6.14. Total Commitment. The Borrower shall not cause or permit the
aggregate principal amount of all Revolving Credit Loans outstanding at any
time, plus the aggregate principal amount of all Swingline Loans outstanding at
any time, plus, the aggregate Stated Amount of Letters of Credit outstanding at
such time, plus the aggregate amount of any unreimbursed draws under outstanding
Letters of Credit, to exceed the Total Commitment in effect at such time.
6.15. No Amendments to Certain Documents; No New Agreements Requiring
Breach of Loan Documents. The Borrower shall not, and shall not permit any other
member of the Borrower Affiliated Group to, at any time cause or permit any of
the charter or other incorporation or organizational documents of the Borrower
or such other member of the Borrower Affiliated Group to be modified, amended or
supplemented in any material respect whatever adverse to the Banks or the
Administrative Agent, without (in each case) the express prior written
agreement, consent or approval of the
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Administrative Agent. Neither the Borrower nor any other member of the Borrower
Affiliated Group will enter into any agreement containing any provision which
would be violated or breached by the performance by the Borrower or such other
member of the Borrower Affiliated Group of its obligations hereunder or under
any of the other Loan Documents.
SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay (i) any amount of principal
of any Loans when due or any unreimbursed draw under any Letter of Credit when
due pursuant to Section 2.17, or (ii) any amount of interest thereon or any
fees, expenses or other amounts payable hereunder or under any Loan Document
within three Business Days after the due date therefor; or
(b) the Borrower or any other member of the Borrower
Affiliated Group shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, obligations, covenants or
agreements contained in Sections 5.2(b), 5.2(d), 5.3 (with respect to
maintenance of insurance), 5.5 or 5.7 or Section 6; or
(bb) the Borrower or any other member of the Borrower
Affiliated Group shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, obligations, covenants or
agreements contained in Section 5.1(a), (b), (c), (e), (f), (g), (h) or (i) and
such failure shall continue for 5 days after the earlier to occur of (i) the
date upon which written notice thereof is given to the Borrower by the
Administrative Agent or (ii) the date upon which an Executive Officer of the
Borrower becomes aware thereof; or
(c) the Borrower or any other member of the Borrower
Affiliated Group shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements (other than in respect of subsections 7.1(a), (b) and (bb)) contained
in this Agreement or in any other Loan Document and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of (i) the date
upon which written notice thereof is given to the Borrower by the Administrative
Agent or (ii) the date upon which an Executive Officer of the Borrower becomes
aware thereof; or
(d) any representation or warranty of the Borrower or any
other member of the Borrower Affiliated Group made in any Loan Document or any
other documents or agreements executed in connection with the transactions
contemplated by
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this Agreement or in any certificate delivered hereunder shall prove to have
been false in any material respect upon the date when made or deemed to have
been made; or
(e) the Borrower or any other member of the Borrower
Affiliated Group shall fail to pay at maturity, or within any applicable period
of grace (not to exceed 30 days), any obligations under the Senior Subordinated
Debt or the Additional Subordinated Debt or any other obligations in excess of
$25,000,000 in the aggregate for borrowed monies or advances or for the lease or
other use of real or personal property, or fail to observe or perform any term,
covenant or agreement evidencing or securing such Senior Subordinated Debt or
Additional Subordinated Debt or other obligations for borrowed monies or
advances or relating to such lease or use of real or personal property, the
result of which failure is to permit the holder or holders of such Indebtedness
to cause such Indebtedness to become due prior to its stated maturity upon
delivery of required notice, if any, or to permit any party to any agreement
evidencing such Senior Subordinated Debt or Additional Subordinated Debt or
other obligations to terminate or cancel such agreement; or
(f) the Borrower or any other member of the Borrower
Affiliated Group shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
official of itself or of all or a substantial part of its property, (ii) admit
in writing its inability to pay, or be generally not paying, its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case as debtor under the United States
Bankruptcy Code (as now or hereafter in effect), (v) take any action or commence
any case or proceeding as debtor under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts, or
any other law providing for the relief of debtors, (vi) fail to contest in a
timely or appropriate manner, or acquiesce in writing to, any petition filed
against it as debtor in an involuntary case under the United States Bankruptcy
Code (as now or hereafter in effect) or other law, (vii) take any action under
the laws of its jurisdiction of incorporation or organization similar to any of
the foregoing, (viii) be Insolvent, or (ix) pass any board resolution or take
any corporate action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower or other applicable member of the
Borrower Affiliated Group in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets, or (iii) similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts or any other law providing for the relief of debtors, and such
proceeding or case shall continue undismissed, or unstayed and in effect, for a
period of 60 days; or an order for relief shall be entered in an involuntary
case under the United States Bankruptcy Code (as now or hereafter in effect),
against the Borrower or any other member of the Borrower Affiliated Group as
debtor; or action under the laws of the jurisdiction of incorporation or
organization of the Borrower or any other member of the Borrower Affiliated
Group
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similar to any of the foregoing shall be taken with respect to the
Borrower or any such member of the Borrower Affiliated Group and shall continue
unstayed and in effect for any period of 60 days; or
(h) judgments or orders for the payment of money shall be
entered against the Borrower or any other member of the Borrower Affiliated
Group by any court, or a warrant of attachment or execution or similar process
shall be issued or levied against property of the Borrower or any other member
of the Borrower Affiliated Group, that in the aggregate exceed $25,000,000 in
value (to the extent not covered by independent third party insurance as to
which the insurer does not dispute coverage) and such judgments, orders,
warrants or process shall continue undischarged or unstayed for 45 days; or
(i) the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group shall fail to pay when due an
aggregate amount in excess of $25,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans in a distress termination under Section 4062 of ERISA
shall be filed by the Borrower, any other member of the Borrower Affiliated
Group or any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute or have grounds to
institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower or any
other member of the Borrower Affiliated Group and such proceedings shall not
have been dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any such Plan or Plans must be terminated; or
(j) a Change of Control shall have occurred; or
(k) the Borrower or any other member of the Borrower
Affiliated Group shall be enjoined, restrained or in any way prevented by the
order of any court or any administrative or regulatory agency from conducting
any material part of its business and such order shall continue in effect for
more than 45 days, or the Borrower or any other member of the Borrower
Affiliated Group shall be indicted for a state or federal crime, or any civil or
criminal action shall otherwise have been brought or threatened against the
Borrower or any other member of the Borrower Affiliated Group, a punishment for
which in any such case could include forfeiture of any assets of the Borrower
Affiliated Group having a fair market value in excess of $25,000,000; or
(l) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether insured or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than 30
consecutive days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any other member of the Borrower
Affiliated Group if such event or circumstance is not covered by
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business interruption insurance and in any such case described above, such event
or condition, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect; or
(m) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter acquired if
such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect; or
(n) any covenant, agreement or obligation of the Borrower or
any other member of the Borrower Affiliated Group contained in or evidenced by
any Loan Document to which the Borrower or such member of the Borrower
Affiliated Group is a party shall, prior to the date on which such document
shall terminate with the express prior written agreement, consent or approval of
the Administrative Agent and the Banks, cease in any material respect to be
legal, valid, binding or enforceable in accordance with the terms thereof; or
the Administrative Agent shall fail to have a valid, perfected first-priority
security interest in any of the Collateral (other than an immaterial portion of
Collateral, as determined by the Administrative Agent) under the Security
Documents; or
(o) any Loan Document shall be canceled, terminated, revoked
or rescinded (or any notice of such cancellation, termination, revocation or
rescission given) otherwise than with the express prior written agreement,
consent or approval of the Administrative Agent and the Banks; or any action at
law, suit in equity or other legal proceeding to cancel, revoke, or rescind any
Loan Document shall be commenced by or on behalf of the Borrower or any other
member of the Borrower Affiliated Group, or by any court or any other
governmental or regulatory authority or agency of competent jurisdiction; or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents or
any one or more of the obligations of the Borrower or any other member of the
Borrower Affiliated Group under any one or more of the Loan Documents are
illegal, invalid or unenforceable in accordance with the terms thereof; or
(p) the terms or provisions of the Senior Subordinated Debt or
the Additional Subordinated Debt shall be modified or amended in any respect
other than in accordance with the terms thereof (including, in any event, that
the terms of subordination contained therein are modified or amended in any
respect without the prior written consent of the Administrative Agent).
7.2. Remedies. (1) Upon the occurrence of an Event of Default described
in subsections 7.1(f) and (g), immediately and automatically, and (2) upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Required Banks and upon the
Administrative Agent's declaration:
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(a) each Bank's commitment (whether in its capacity as a Bank,
the Swingline Lender or the Issuing Bank) to make any further Loans or issue
additional Letters of Credit hereunder shall terminate;
(b) the unpaid principal amount of the Loans together with
accrued interest, and all other Obligations (other than Obligations under any
Interest Rate Protection Agreement) shall become immediately due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived;
(c) with respect to existing Letters of Credit, the Borrower
shall provide to the Administrative Agent cash collateral in an amount equal to
105% of the aggregate Stated Amount of Letters of Credit outstanding, which cash
collateral shall be held by the Administrative Agent subject to and in
accordance with the Borrower's Security Agreement; and
(d) the Administrative Agent may exercise (on behalf of itself
and the Banks) any and all rights the Administrative Agent and the Banks have
under this Agreement, the other Loan Documents, or any other documents or
agreements executed in connection herewith, or at law or in equity, and proceed
to protect and enforce the Administrative Agent's and the Banks' rights by any
action at law, in equity or other appropriate proceeding.
SECTION VIII
CONCERNING THE ADMINISTRATIVE AGENT AND THE BANKS
8.1. Appointment and Authorization. Each of the Banks (in each of its
respective capacities) hereby appoints Fleet National Bank to serve as
Administrative Agent under this Agreement and irrevocably authorizes the
Administrative Agent to take such action on such Bank's behalf under this
Agreement and to exercise such powers and to perform such duties under this
Agreement and the other documents and instruments executed and delivered in
connection with the consummation of the transactions contemplated hereby
(including, without limitation, all Loan Documents) as are delegated to the
Administrative Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
8.2. Administrative Agent and Affiliates. Fleet National Bank shall
also have the same rights and powers under this Agreement of a Bank and may
exercise or refrain from exercising the same as though it were not the
Administrative Agent, and Fleet National Bank and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any other member of the Borrower Affiliated Group or any
Affiliate of any member of the Borrower Affiliated Group as if it were not the
Administrative Agent hereunder. Except as otherwise provided by the terms of
this Agreement, nothing herein shall prohibit any Bank from accepting deposits
from, lending money to or generally engaging in any kind of business with the
Borrower or any other
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member of the Borrower Affiliated Group or any Affiliate of any member of the
Borrower Affiliated Group.
8.3. Future Advances.
(a) In order to more conveniently administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Bank prior to
the date upon which any Revolving Credit Loan is to be made, assume that such
Bank has made available to the Administrative Agent on such date the amount of
such Bank's share of such Revolving Credit Loan to be made on such date as
provided in this Agreement, and the Administrative Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Administrative Agent such amount on a date after the date upon which the
Revolving Credit Loan is made, such Bank shall pay to the Administrative Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest rate
paid by the Administrative Agent for federal funds acquired by the
Administrative Agent during each day included in such period, multiplied by (ii)
the amount of such Bank's share of such Revolving Credit Loan, multiplied by
(iii) a fraction, the numerator of which is the number of days that elapsed from
and including such date to the date on which the amount of such Bank's share of
such Revolving Credit Loan shall become immediately available to the
Administrative Agent, and the denominator of which is 360 or 365, as applicable.
A statement of the Administrative Agent submitted to such Bank with respect to
any amounts owing under this subsection shall be prima facie evidence of the
amount due and owing to the Administrative Agent by such Bank.
(b) The Administrative Agent may at any time, in its sole
discretion, upon notice to any Bank, refuse to make any Revolving Credit Loan to
the Borrower on behalf of such Bank unless such Bank shall have provided to the
Administrative Agent immediately available federal funds equal to such Bank's
share of such Revolving Credit Loan in accordance with this Agreement.
(c) Anything in this Agreement to the contrary
notwithstanding, the obligations to make Loans under the terms of this Agreement
shall be the several and not joint obligation of each of the Banks and any
advances made by the Administrative Agent on behalf of any Bank are strictly for
the administrative convenience of the parties and shall in no way diminish any
Bank's liability to repay the Administrative Agent for such Loans and advances.
If the amount of any Bank's share of any Revolving Credit Loan which the
Administrative Agent has advanced to the Borrower is not made available to the
Administrative Agent by such Bank within one Business Day following the date
upon which such Revolving Credit Loan is made, the Administrative Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such date.
8.4. Delinquent Bank. Notwithstanding anything to the contrary
contained in this Agreement, any Bank that fails to make available to the
Administrative Agent its share of
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any Revolving Credit Loan (such applicable amount, a "Delinquency") when and to
the full extent required by the provisions of this Agreement shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank until
such time as such Delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
non-delinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Revolving Credit Loans in an amount equal to such
Delinquency. The Delinquent Bank hereby authorizes the Administrative Agent to
distribute such payments to the non-delinquent Banks in proportion to their
respective pro rata shares of all outstanding Revolving Credit Loans. A
Delinquent Bank shall be deemed to have satisfied in full a Delinquency when and
if, as a result of application of the assigned payments to all outstanding
Revolving Credit Loans of the non-delinquent Banks, the Banks' respective pro
rata shares of all outstanding Loans have returned to those in effect
immediately prior to such Delinquency and without giving effect to the
nonpayment causing such Delinquency. No Delinquent Bank shall have a right to
participate in any vote taken by the Banks hereunder, which shall be calculated
as if the Commitments of the Delinquent Bank did not exist (except for those
matters requiring the approval of all Banks pursuant to Section 9.8). During any
period in which a Bank is a Delinquent Bank, the Borrower shall have the right
to designate a replacement bank or financial institution satisfactory to the
Administrative Agent in its reasonable discretion, upon which designation, the
Delinquent Bank shall promptly assign its Loans and Commitments to such
designee.
8.5. Payments.
(a) All payments and prepayments of principal of and interest
on Loans received by the Administrative Agent shall be paid to each of the Banks
pro rata in accordance with their respective interests in such Loans subject to
Section 8.4 above; and any other payments received by the Administrative Agent
hereunder shall be paid to the Banks or the Administrative Agent or both pro
rata as their respective interests appear. All such payments received after
acceleration of the Obligations shall be applied in the order set forth in the
Security Agreements. All such payments received by the Administrative Agent
hereunder for the accounts of the Banks prior to 2:00 p.m. on any Business Day
shall be paid to the Banks on such Business Day and all such payments received
by the Administrative Agent hereunder for the accounts of the Banks at or after
2:00 p.m. shall be paid to the Banks on the next Business Day.
(b) Each of the Banks and the Administrative Agent hereby
agrees that if it should receive any amount (whether by voluntary payment, by
the exercise of the right of set-off or banker's lien, by counterclaim or cross
action, by the enforcement of any right hereunder or otherwise) in respect of
principal of, or interest on, the Loans or any fees which are to be shared among
the Banks, which, as compared to the amounts theretofore received by the other
Banks with respect to such principal, interest or fees, is in excess of such
Bank's pro rata share of such principal, interest or fees as provided in this
Agreement, such Bank shall share such excess, less the costs and expenses
(including, reasonable attorneys' fees and disbursements) incurred by such Bank
in
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connection with such realization, exercise, claim or action, pro rata with
all other Banks in proportion to their respective interests therein, and such
sharing shall be deemed a purchase (without recourse) by such sharing party of
participation interests in the Loans or such fees, as the case may be, owed to
the recipients of such shared payments to the extent of such shared payments;
provided, however, that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
8.6. Action by Administrative Agent.
(a) The obligations of the Administrative Agent hereunder are
only those expressly set forth herein. The Administrative Agent shall have no
duty to exercise any right or power or remedy hereunder or under any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement or to take any affirmative action hereunder or
thereunder.
(b) The Administrative Agent shall keep all records of the
Loans and payments hereunder, and shall give and receive notices and other
communications to be given or received by the Administrative Agent hereunder on
behalf of the Banks.
(c) Upon the occurrence and during the continuance of an Event
of Default the Administrative Agent may, and upon the direction of the Required
Banks pursuant to Section 7.2 the Administrative Agent shall, exercise the
option of the Banks pursuant to Section 7.2 to declare all Loans and other
Obligations (other than Obligations under any Interest Rate Protection
Agreement) immediately due and payable and may take such action as may appear
necessary or desirable to collect the Obligations (other than Obligations under
any Interest Rate Protection Agreement) and enforce the rights and remedies of
the Administrative Agent or the Banks.
8.7. Notification of Defaults and Events of Default. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Banks.
8.8. Consultation with Experts. The Administrative Agent shall be
entitled to retain and consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to the
Banks for any action taken, omitted to be taken or suffered in good faith by it
in accordance with the advice of such counsel, accountants or experts. The
Administrative Agent may employ administrative agents and attorneys-in-fact and
shall not be liable to the Banks for the default or misconduct of any such
administrative agents or attorneys.
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8.9. Liability of Administrative Agent. The Administrative Agent shall
exercise the same care to protect the interests of each Bank as it does to
protect its own interests, so that so long as the Administrative Agent exercises
such care it shall not be under any liability to any of the Banks, except for
the Administrative Agent's gross negligence or willful misconduct with respect
to anything it may do or refrain from doing. Subject to the immediately
preceding sentence, neither the Administrative Agent nor any of its directors,
officers, administrative agents or employees shall be liable for any action
taken or not taken by it in connection herewith in its capacity as
Administrative Agent. Without limiting the generality of the foregoing, neither
the Administrative Agent nor any of its directors, officers, administrative
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify: (i) any statement, warranty or representation made in
connection with this Agreement, any Loan Document, or any borrowing hereunder;
(ii) the performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Sections 3.1 or
3.2, except receipt of items required to be delivered to the Administrative
Agent; (iv) the validity, effectiveness, enforceability or genuineness of this
Agreement, the Notes, any other Loan Document or any other document or
instrument executed and delivered in connection with or as contemplated by this
Agreement; (v) the existence, value, collectibility or adequacy of the
Collateral or any part thereof or the validity, effectiveness, perfection or
relative priority of the liens and security interests of the Banks (through the
Administrative Agent) therein; or (vi) the filing, recording, refiling,
continuing or re-recording of any financing statement or other document or
instrument evidencing or relating to the security interests or liens of the
Banks (through the Administrative Agent) in the Collateral. The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telecopy or similar writing) believed by it to be genuine or to be signed or
sent by the proper party or parties.
8.10. Indemnification. Each Bank agrees to indemnify the Administrative
Agent (to the extent the Administrative Agent is not reimbursed by the
Borrower), ratably in accordance with its Commitment Percentage, from and
against any cost, expense (including attorneys' fees and disbursements), claim,
demand, action, loss (excluding credit losses arising as a result of the
Borrower's failure to pay the Loan or interest thereon) or liability which the
Administrative Agent may suffer or incur in connection with this Agreement, or
any action taken or omitted by the Administrative Agent hereunder, or the
Administrative Agent's relationship with the Borrower hereunder, including,
without limitation, the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of its powers
and duties hereunder and of taking or refraining from taking any action
hereunder, but excluding any costs, expenses or losses directly arising from the
Administrative Agent's gross negligence or willful misconduct. No payment by any
Bank under this Section shall in any way relieve the Borrower of its obligations
under this Agreement with respect to the amounts so paid by any Bank, and the
Banks shall be subrogated to the rights of the Administrative Agent, if any, in
respect thereto.
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8.11. Independent Credit Decision. Each of the Banks represents and
warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Bank and based on the
financial statements referred to in Section 4.7 and such other documents and
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each of the Banks
acknowledges that it has not relied upon any representation by the
Administrative Agent and that the Administrative Agent shall not be responsible
for any statements in or omissions from any documents or information concerning
the Borrower, this Agreement, the Notes, any other Loan Document or any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement. Each of the Banks acknowledges that it will,
independently and without reliance upon the Administrative Agent or other Banks
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.
8.12. Successor Administrative Agent; Removal. Fleet National Bank, or
any successor Administrative Agent, may resign as Administrative Agent at any
time by giving 30 days' prior written notice thereof to the Banks and to the
Borrower, and the Administrative Agent may be removed at any time with or
without cause by the Banks whose aggregate Commitment Percentages constitute at
least 66-2/3% at the relevant time of reference (or if the Commitments have been
terminated, the Banks whose aggregate Loans and Letters of Credit outstanding
constitute more than 66-2/3% of the aggregate Loans and Letters of Credit
outstanding at the relevant time of reference. Upon any such resignation or
removal, the Banks shall have the right to appoint a successor Administrative
Agent, which successor Administrative Agent shall be reasonably acceptable to
the Borrower. If no successor Administrative Agent shall have been so appointed
by the Banks, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the
Administrative Agent's removal, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent, which shall be a
commercial bank (or Affiliate thereof) or savings and loan association organized
under the laws of the United States of America or any State thereof or under the
laws of another country which is doing business in the United States of America
or any State thereof and having total assets of at least $25,000,000,000 and
shall be reasonably acceptable to the Borrower. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring or removed Administrative Agent shall be
discharged from all further duties and obligations under this Agreement. After
any Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Section VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
8.13. Other Agents. The Banks (or Affiliates thereof) identified on the
facing page and the signature pages of this Agreement as a "documentation
agent", a "syndication agent", or a "co-arranger" shall not have any right,
power, liability,
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responsibility or duty under this Agreement other than those applicable to all
Banks as such.
SECTION IX
MISCELLANEOUS
9.1. Notices. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
(i) when delivered by hand, (ii) when sent by electronic facsimile transmission
with confirmation of receipt if sent prior to 5:00 p.m. of the recipient's
prevailing time, and otherwise deemed to have been given on the next Business
Day, (iii) three Business Days after being sent by certified mail, return
receipt requested, and properly deposited in the mails, postage prepaid, or (iv)
one Business Day after being delivered to an overnight courier, addressed to
such party at its address indicated below:
If to the Borrower, at
▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Administrative Agent or Fleet National Bank, at
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
Goulston & Storrs, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Bank, at the address for such Bank set forth on Schedule 1
or at any other address specified by such party in writing to the other parties
listed in this Section 9.1. Notwithstanding the foregoing, the Administrative
Agent and the Banks shall have been deemed for all purposes to have delivered
any notice required to be delivered to the Borrower Affiliated Group by this
Agreement or otherwise, by sending such notification to the address set forth
above for the "Borrower."
9.2. Expenses. The Borrower will pay on demand all reasonable expenses
of (a) the Arranger and the Administrative Agent in connection with the
preparation, syndication, waiver and/or amendment of this Agreement, the Loan
Documents or other documents executed in connection therewith, and (b) the
Arranger, the Administrative Agent or any Bank in connection with the
administration, default or collection of the Loans or other Obligations or
administration, default, collection in connection with the Arranger's, the
Administrative Agent's or any Bank's exercise, preservation or enforcement of
any of its rights, remedies or options hereunder or thereunder, including
without limitation,
(i) under clauses (a) and (b), reasonable fees of outside
legal counsel and all accounting, consulting, brokerage or other
similar professional fees or expenses, and any fees or expenses
associated with any travel or other costs relating to any appraisals,
field examinations, or other examinations conducted in connection with
the Obligations or any Collateral therefor, plus
(ii) under clause (b) only, the allocated costs of in-house
legal counsel,
and the amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
9.3. Indemnification. The Borrower absolutely and unconditionally
indemnifies and holds harmless the Administrative Agent, the Arranger and each
of the Banks against any and all claims, demands, suits, actions, causes of
action, damages, losses, settlement payments, obligations, costs, expenses
(including, without limitation, reasonable fees and disbursements of counsel)
and all other liabilities whatsoever which shall at any time or times be
incurred or sustained by the Administrative Agent, the Arranger or any of the
Banks or by any of their shareholders, directors, officers, employees,
subsidiaries, affiliates or administrative agents (other than as a result of the
gross negligence or willful misconduct of the Administrative Agent, the Arranger
or any of the Banks) arising out of or in connection with, any of the
transactions contemplated by, associated with or ancillary to this Agreement or
any of the other Loan Documents, whether or not all or any of the transactions
contemplated by, associated with or ancillary to this Agreement or any of such
Loan Documents, are ultimately consummated. Without prejudice to the survival of
any other covenant of the Borrower hereunder, the covenants of this Section
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9.3 shall survive the termination of this Agreement and the payment or
satisfaction of payment of amounts owing with respect to the Notes or any other
Loan Document.
9.4. Set-Off. Regardless of the adequacy of any Collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from any Bank or any of its branch or affiliate offices
to the Borrower or any other member of the Borrower Affiliated Group may, at any
time and from time to time upon the occurrence and during the continuance of an
Event of Default, without notice to the Borrower or such member of the Borrower
Affiliated Group or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by any Bank against any
and all Obligations of the Borrower or such member of the Borrower Affiliated
Group to such Bank or any of its affiliates in such manner as the head office of
the Bank or any of its branch offices in their sole discretion may determine
(with notice to be given to the Borrower promptly thereafter), and the Borrower
and each other member of the Borrower Affiliated Group hereby grants such Bank a
continuing security interest in such deposits, balances or other sums for the
payment and performance of all such Obligations.
9.5. Term of Agreement. This Agreement shall continue in force and
effect so long as any Bank has any commitment to make Loans hereunder or any
Loan or any Obligation shall be outstanding.
9.6. No Waivers. No failure or delay by the Administrative Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note or
under any other documents or agreements executed in connection herewith shall
operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and in the Notes
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
9.7. Governing Law. This Agreement and the other Loan Documents shall
be deemed to be contracts made under seal and shall be construed in accordance
with and governed by the laws of the State of New York (without giving effect to
any conflicts of laws provisions contained therein). Any legal action or
proceeding arising out of or relating to this Agreement, any other Loan Document
or any Obligation may be instituted, in the Administrative Agent's sole
discretion, in the courts of the State of New York or the United States of
America for the Southern District of New York, and the Borrower and each other
member of the Borrower Affiliated Group hereby irrevocably submits to the
jurisdiction of each such court in any such action or proceeding; provided,
however, that the foregoing shall not limit the Administrative Agent's rights to
bring any legal action or proceeding in any other appropriate jurisdiction.
9.8. Amendments, Waivers, Etc. Except as otherwise expressly provided
in this Agreement or any of the other Loan Documents: (i) each of the Loan
Documents may be modified, amended or supplemented in any respect whatever only
with the prior written
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consent or approval of the Required Banks and the Borrower; and (ii) the
performance or observance by the Borrower of any of its covenants, agreements or
obligations under any of the Loan Documents may be waived only with the written
consent of the Required Banks; provided, however, that the following changes
shall require the written consent, agreement or approval of all of the Banks:
(A) any decrease in the amount of or postponement or subordination of the
regularly scheduled or otherwise required payment date for any of the
Obligations (including, without limitation, principal, interest and fees, but
excluding Obligations under any Interest Rate Protection Agreement); (B) any
decrease in the interest rates or amount of any fees prescribed in this
Agreement; (C) any increase in the Commitment or Commitment Percentage of any of
the Banks, except as permitted by Section 2.7 or Section 9.10 or any
modification, amendment or waiver of Sections 2.7 or 2.19, provided that no
Bank's Commitment may be increased without the consent of such Bank; (D) any
release of all or any substantial part of the Collateral (except for any such
releases of Collateral permitted or provided for in the Loan Documents); (E) any
change in the definition of Required Banks; (F) the release or termination of
any Subsidiary Guaranty of a Subsidiary whose GAAP total assets exceed
$25,000,000 or the assignment of any of the Borrower's rights and obligations
hereunder (other than in connection with a merger permitted under Section
6.4(b); and (G) any change in the terms of this Section 9.8. Any change to
Section IX or any other provision of this Agreement affecting the rights or
obligations of the Administrative Agent shall not be amended or modified without
the prior written consent of the Administrative Agent.
9.9. Binding Effect of Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that (i) the Borrower may not assign or transfer its
rights or obligations hereunder, except by merger permitted hereunder, and (ii)
no Bank may assign or transfer its rights or obligations hereunder to any Person
except in accordance with the provisions of Section 9.10.
9.10. Successors and Assigns.
(i) Any Bank may at any time grant to one or more banks or other
financial institutions (each, a "Participant") participating interests in any of
its Commitments or any or all of its Loans in an amount and on such terms as
such Bank may deem appropriate. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided, however, that such participation agreement may provide
that such Bank will not agree, without the consent of the Participant, to any
modification, amendment or waiver of this Agreement requiring the consent,
agreement or approval of all of the Banks, as described
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in Section 9.8. The Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.10, 2.11, 2.13 and 2.15 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (ii) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (i).
(ii) Any Bank may at any time assign to one or more Eligible Assignees
all, or a part of all, of its rights, interests and obligations under this
Agreement and its Note, if any, on such terms, as between such Bank and each of
its Eligible Assignees, as such Bank may deem appropriate, and such Eligible
Assignee shall assume such rights, interests and obligations, pursuant to an
instrument executed by such Eligible Assignee and such transferor Bank
substantially in the form of Exhibit G hereto (an "Assignment and Assumption");
provided, however, that (A) prior to assigning any interest to any Eligible
Assignee hereunder, such Bank will (x) notify the Borrower and the
Administrative Agent in writing identifying the proposed Eligible Assignee and
stating the aggregate principal amount of the proposed interest to be assigned,
and (y) receive the prior written consent of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Borrower, which
consent may not be unreasonably withheld by either the Borrower or the
Administrative Agent, and (B) no Bank will assign to any Eligible Assignee less
than an aggregate amount equal to the lesser of (x) $5,000,000 of such Bank's
Commitments and interest in the Loans (as such interest may be reduced pursuant
to the terms hereof) and in additional increments of $1,000,000 in excess
thereof or (y) the remaining amount of such Bank's Commitments. It is understood
and agreed that the proviso contained in the immediately preceding sentence
shall not be applicable in the case of, and this subsection (ii) shall not
restrict, an assignment or other transfer by any Bank to an Affiliate of such
Bank or to any other Bank or a collateral assignment or other similar transfer
to a Federal Reserve Bank or an assignment required under applicable law. Upon
execution and delivery of such an Assignment and Assumption and payment by such
Eligible Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Eligible Assignee, such
Eligible Assignee shall be a Bank party to this Agreement and shall have all the
rights, interests and obligations of a Bank with the Commitments as set forth in
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (ii), the transferor Bank, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the Eligible Assignee and the transferor Bank, as
applicable.
(iii) No Eligible Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Sections
2.9, 2.10, 2.13 and 2.15 than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or at a time when the circumstances giving rise
to such greater payment did not exist.
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(iv) Assignments require a fee payable to the Administrative Agent by
the transferor Bank, solely for the account of the Administrative Agent, in the
amount of $3,500.
9.11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument, and each counterpart will be deemed an original.
9.12. Partial Invalidity. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.13. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
ADMINISTRATIVE AGENT MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM OR
DEFENSE BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR THE ADMINISTRATIVE AGENT AND THE BANKS TO ENTER INTO THIS AGREEMENT AND TO
MAKE LOANS AND EXTEND CREDIT TO THE BORROWER. THE BORROWER (i) CERTIFIES THAT
NEITHER THE ADMINISTRATIVE AGENT, NOR ANY BANK NOR ANY REPRESENTATIVE,
ADMINISTRATIVE AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(ii) ACKNOWLEDGES THAT, IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THE BORROWER IS A PARTY, THE ADMINISTRATIVE AGENT AND THE
BANKS ARE RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 9.14.
9.15. WAIVER OF SPECIAL DAMAGES. EXCEPT AS PROHIBITED BY LAW, THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS EACH HEREBY WAIVES ANY RIGHTS
WHICH IT MAY HAVE TO CLAIM OR RECOVER, IN ANY LITIGATION WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE LOAN DOCUMENTS
(INCLUDING WITHOUT LIMITATION THIS AGREEMENT AND THE NOTES AND ANY AMENDMENTS
THEREOF), ANY SPECIAL EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES. THE BORROWER
(A) CERTIFIES THAT NO BANK, ADMINISTRATIVE AGENT
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OR REPRESENTATIVE, AGENT OR ATTORNEY THEREOF HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH ENTITY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT, IN ENTERING INTO THIS
AGREEMENT, THE BANKS AND THE ADMINISTRATIVE AGENT ARE RELYING UPON, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 9.15.
9.16. Entire Agreement. This Agreement, the other Loan Documents and
the other documents and agreements executed in connection herewith constitute
the final agreement of the parties hereto and supersede any prior agreement or
understanding, written or oral, with respect to the matters contained herein and
therein.
9.17. Replacement of Loan Documents, Etc. Upon receipt of an affidavit
of an officer of any Bank as to the loss, theft, destruction or mutilation of
one or more of the Loan Documents which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon cancellation of
such Loan Document and, with respect to any instrument, the customary
indemnification of the Borrower by such Bank, the Borrower will issue, in lieu
thereof, a replacement Loan Document containing the same terms and conditions.
-85-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
The Borrower:
▇▇▇▇▇▇ & NOBLE, INC.
By:/s/▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Title: Chief Financial Officer
-86-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
The Administrative Agent and a Bank:
FLEET NATIONAL BANK
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
-87-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
The Documentation Agent and a Bank:
ING CAPITAL LLC
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
(Signatures continued on next page)
-88-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
The Syndication Agent and a Bank:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇ Marks
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ Marks
Title: Director
-89-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
CITICORP USA, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
-90-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
SUNTRUST BANK
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
-91-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
THE BANK OF NEW YORK
By:/s/ ▇▇▇▇▇ ▇. Judge
----------------------------------------
Name: ▇▇▇▇▇ ▇. Judge
Title: Senior Vice President
-92-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
▇▇▇▇▇ FARGO BANK NA
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
-93-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
JPMORGAN CHASE BANK
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
-94-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
MIZUHO CORPORATE BANK, LTD.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
-95-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
SOVEREIGN BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
-96-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
NATIONAL CITY BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
-97-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
BANK OF AMERICA, N.A.
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
-98-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
COMERICA BANK
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Account Officer
-99-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
FIFTH THIRD BANK
By:/s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Corporate Banking Officer
-100-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
MELLON BANK, N.A.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
-101-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
U.S. BANK, NATIONAL ASSOCIATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-102-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
ALLFIRST BANK
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-103-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
FIRST HAWAIIAN BANK
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
-104-
counterpart signature page to
Revolving Credit Agreement,
dated as of May 22, 2002,
among ▇▇▇▇▇▇ & Noble, Inc.,
Fleet National Bank, as Administrative Agent,
and certain other Lending Institutions
Bank:
HIBERNIA NATIONAL BANK
By:/s/ ▇▇▇ St. ▇▇▇▇
----------------------------------------
Name: ▇▇▇ St. ▇▇▇▇
Title: SVP
-105-
I-1