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Exhibit 10.40
AMENDED AND RESTATED REVOLVING
CREDIT AND TERM LOAN AGREEMENT
dated as of January 30, 1998
among
FILENE'S BASEMENT, INC.,
as Borrower,
FILENE'S BASEMENT CORP.,
as Guarantor,
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON)
and
THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1 HERETO,
as Banks
and
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON),
as Agent
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TABLE OF CONTENTS
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1. DEFINITIONS AND RULES OF INTERPRETATION...........................1
1.1. Definitions. ...........................................1
1.2. Rules of Interpretation..................................17
2. THE REVOLVING CREDIT FACILITY....................................17
2.1. Commitment to Lend. ....................................17
2.2. Commitment Fee. ........................................18
2.3. Reduction of Commitment. ...............................18
2.4. The Revolving Credit Notes. ............................19
2.5. Interest on Revolving Credit Loans. ....................19
2.6. Requests for Revolving Credit Loans......................20
2.6.1. Loan Request. ..................................20
2.6.2. Swing Line. ....................................20
2.6.3. Reimbursement Obligations. .....................21
2.7. Conversion Options.......................................21
2.7.1. Conversion to Different Type of Revolving
Credit Loan. ............................................21
2.7.2. Continuation of Type of Revolving
Credit Loan..............................................22
2.7.3. Eurodollar Rate Loans. .........................22
2.8. Funds for Revolving Credit Loan..........................22
2.8.1. Funding Procedures. ............................22
2.8.2. Advances by Agent. .............................22
2.9. Change in Borrowing Base. ...............................23
2.10. Settlements; Failure to Make Funds Available. .........23
2.10.1. Notice to Banks. ..............................23
2.10.2. Delinquent Banks. .............................24
2.10.3. Advances. .....................................24
3. REPAYMENT OF THE REVOLVING CREDIT LOANS..........................25
3.1. Maturity. ..............................................25
3.2. Mandatory Repayments of Revolving Credit Loans...........25
3.2.1. Outstandings in Excess of Commitment or
Borrowing Base. .........................................25
3.2.2. Blocked Account Provisions. ....................26
4. THE TERM LOAN....................................................28
4.1. Commitment to Lend. ....................................28
4.2. The Term Notes. ........................................28
4.3. Mandatory Repayments of Term Loan. .....................28
4.3.1. Schedule of Installment Payments of Principal
of Term Loan. ...........................................28
4.3.2. Additional Mandatory Payments if Outstandings
Exceed the Borrowing Base. .............................28
4.4. Optional Prepayment of Term Loan. ......................29
4.5. Interest on Term Loan....................................30
4.5.1. Interest Rates. ................................30
4.5.2. Interest Rate Options. .........................30
4.5.3. Amounts, etc. ..................................30
5. LETTERS OF CREDIT................................................30
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5.1. Letter of Credit Commitments.............................30
5.1.1. Commitment to Issue Letters of Credit. .........30
5.1.2. Letter of Credit Applications. .................31
5.1.3. Terms of Letters of Credit. ....................31
5.1.4. Reimbursement Obligations of Banks. ............32
5.1.5. Participations of Banks. .......................32
5.2. Reimbursement Obligation of the Borrower. ..............32
5.3. Letter of Credit Payments. .............................33
5.4. Obligations Absolute. ..................................33
5.5. Reliance by Issuer. ....................................34
5.6. Letter of Credit Fee. ..................................34
6. CERTAIN GENERAL PROVISIONS.......................................35
6.1. Amendment Fee. .........................................35
6.2. Funds for Payments.......................................35
6.2.1. Payments to Agent. .............................35
6.2.2. No Offset, etc. ................................35
6.3. Computations. ..........................................36
6.4. Inability to Determine Eurodollar Rate. ................36
6.5. Illegality. ............................................36
6.6. Additional Costs, Etc. .................................37
6.7. Capital Adequacy. ......................................38
6.8. Certificate. ...........................................38
6.9. Indemnity. .............................................38
6.10. Interest After Default..................................39
6.10.1. Overdue Amounts. ..............................39
6.10.2. Amounts Not Overdue. ..........................39
7. COLLATERAL SECURITY AND GUARANTIES...............................39
7.1. Security of Borrower. ..................................39
7.2. Guaranty and Security of Guarantor. ....................39
8. REPRESENTATIONS AND WARRANTIES...................................40
8.1. Corporate Authority......................................40
8.1.1. Incorporation; Good Standing. ..................40
8.1.2. Authorization. .................................40
8.1.3. Enforceability. ................................40
8.2. Governmental Approvals. ................................41
8.3. Title to Properties; Leases. ...........................41
8.4. Financial Statements and Projections.....................41
8.4.1. Financial Statements. ..........................41
8.4.2. Projections. ...................................41
8.5. No Material Changes, Etc. ..............................42
8.6. Franchises, Patents, Copyrights, Etc. ..................42
8.7. Litigation. ............................................42
8.8. No Materially Adverse Contracts, Etc. ..................42
8.9. Compliance with Other Instruments, Laws, Etc. ..........42
8.10. Tax Status. ...........................................43
8.11. No Event of Default. ..................................43
8.12. Holding Company and Investment Company Acts. ..........43
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8.13. Absence of Financing Statements, Etc. .................43
8.14. Perfection of Security Interest. ......................43
8.15. Certain Transactions. .................................44
8.16. Employee Benefit Plans..................................44
8.16.1. In General. ...................................44
8.16.2. Terminability of Welfare Plans. ...............44
8.16.3. Guaranteed Pension Plans. .....................44
8.16.4. Multiemployer Plans. ..........................45
8.17. Regulations U and X. ...................................45
8.18. Environmental Compliance. .............................45
8.19. Subsidiaries, etc. ....................................47
8.20. Bank Accounts. ........................................47
8.21. Fiscal Quarters. ......................................48
8.22. Chief Executive Office; Inventory Locations. ..........48
8.23. Insurance. ............................................48
8.24. Full Disclosure. ......................................48
9. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR. .......48
9.1. Punctual Payment. ......................................48
9.2. Maintenance of Office. .................................48
9.3. Records and Accounts. ..................................49
9.4. Financial Statements, Certificates and Information. ....49
9.5. Notices. ...............................................51
9.5.1. Defaults. ......................................51
9.5.2. Environmental Events. ..........................51
9.5.3. Notification of Claim against Collateral. .......52
9.5.4. Notice of Litigation and Judgments. ............52
9.6. Corporate Existence; Maintenance of Properties. ........52
9.7. Insurance. .............................................53
9.7.1. General Coverage. ..............................53
9.7.2. Business Interruption Insurance. ...............53
9.8. Taxes. .................................................53
9.9. Inspection of Properties and Books, etc. ................53
9.9.1. General. .......................................53
9.9.2. Appraisals. ....................................54
9.9.3. Environmental Assessments. .....................54
9.9.4. Communications with Accountants. ...............55
9.10. Compliance with Laws, Contracts, Licenses,
and Permits.............................................55
9.11. Employee Benefit Plans. ...............................55
9.12. Use of Proceeds. ......................................56
9.13. Additional Mortgaged Property. ........................56
9.14. Bank Accounts. ........................................56
9.15. Agency Account Agreements; Credit Card Providers. .....56
9.16. Inventory Restrictions. ...............................57
9.17. Landlord Waivers. .....................................57
9.18. Further Assurances. ...................................57
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND
THE GUARANTOR...........................................57
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10.1. Restrictions on Indebtedness. .........................57
10.2. Restrictions on Liens. ................................59
10.3. Restrictions on Investments. ..........................61
10.4. Distributions. ........................................63
10.5. Merger, Consolidation and Disposition of Assets. ......63
10.5.1. Mergers and Acquisitions. .....................63
10.5.2. Disposition of Assets. ........................63
10.6. Sale and Leaseback. ...................................64
10.7. Compliance with Environmental Laws. ...................64
10.8. Employee Benefit Plans. ...............................65
10.9. Bank Accounts. ........................................65
10.10. Amendments to Monogram Agreement. ....................65
10.11. Transactions with Affiliates. ........................65
11. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTOR. ........66
11.1. Minimum EBITDA. .......................................66
11.2. Minimum Operating Cash Flow to Fixed
Obligations Ratio.......................................66
12. CLOSING CONDITIONS. ...........................................67
12.1. Loan Documents, etc. ..................................67
12.2. Certified Copies of Charter Documents. ................67
12.3. Corporate Action. .....................................67
12.4. Incumbency Certificate. ...............................67
12.5. Validity of Liens. ....................................68
12.6. Perfection Certificates and UCC Search Results. .......68
12.7. Certificates of Insurance. ............................68
12.8. Borrowing Base Report. ................................68
12.9. Solvency Certificate. .................................68
12.10. Opinion of Counsel. ..................................68
12.11. Payment of Fees. .....................................68
12.12. Delivery of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Report. ..................69
13. CONDITIONS TO ALL BORROWINGS. .................................69
13.1. Representations True; No Event of Default. ............69
13.2. No Legal Impediment. ..................................69
13.3. Governmental Regulation. ..............................69
13.4. Proceedings and Documents. ............................69
13.5. Borrowing Base Report. ................................70
14. EVENTS OF DEFAULT; ACCELERATION; ETC. .........................70
14.1. Events of Default and Acceleration. ...................70
14.2. Termination of Commitments. ...........................74
14.3. Remedies. .............................................74
14.4. Distribution of Collateral Proceeds. ..................74
15. SETOFF. .......................................................75
16. THE AGENT. ....................................................76
16.1. Authorization. ........................................76
16.2. Employees and Agents. .................................77
16.3. No Liability. .........................................77
16.4. No Representations. ...................................77
16.5. Payments................................................78
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16.5.1. Payments to Agent. ...........................78
16.5.2. Distribution by Agent. .......................78
16.5.3. Delinquent Banks. ............................78
16.6. Holders of Notes. .....................................79
16.7. Indemnity. ............................................79
16.8. Agent as Bank. ........................................79
16.9. Resignation. ..........................................79
16.10. Notification of Defaults and Events of Default. ......80
16.11. Duties in the Case of Enforcement. ...................80
17. EXPENSES. .....................................................80
18. INDEMNIFICATION. ..............................................81
19. SURVIVAL OF COVENANTS, ETC. ...................................82
20. ASSIGNMENT AND PARTICIPATION. .................................83
20.1. Conditions to Assignment by Banks. ....................83
20.2. Certain Representations and Warranties;
Limitations; Covenants. .......................................83
20.3. Register. .............................................84
20.4. New Notes. ............................................85
20.5. Participations. .......................................85
20.6. Disclosure. ...........................................85
20.7. Assignee or Participant Affiliated with
the Borrower............................................86
20.8. Miscellaneous Assignment Provisions. ..................86
20.9. Assignment by Borrower. ...............................87
21. NOTICES, ETC. .................................................87
22. GOVERNING LAW. ................................................87
23. HEADINGS. .....................................................88
24. COUNTERPARTS. .................................................88
25. ENTIRE AGREEMENT, ETC. ........................................88
26. WAIVER OF JURY TRIAL. .........................................88
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. ...........................89
28. SEVERABILITY. .................................................90
29. CONFIDENTIALITY. ..............................................90
30. TRANSITIONAL ARRANGEMENTS .....................................90
30.1. Original Credit Agreement Superseded. .................90
30.2. Return and Cancellation of Notes. .....................90
30.3. Interest and Fees Under Superseded Agreement. .........90
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EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Loan Request
Exhibit D Form of Term Note
Exhibit E Form of Compliance Certificate
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Landlord Waiver
Schedule 1 Banks; Commitments
Schedule 1(a) Charges relating to Write-downs
Schedule 3.2.2(a) Blocked Account Provisions - Agency Account
Institutions
Schedule 3.2.2(b) Blocked Account Provisions - Credit Cards
Schedule 8.3 Title to Properties; Leases
Schedule 8.4.1 Contingent Liabilities
Schedule 8.4.2 Balance Sheets, Income and Cash Flow
Statements
Schedule 8.7 Litigation
Schedule 8.8 Materially Adverse Contracts
Schedule 8.9 Compliance with Laws
Schedule 8.10 Taxes
Schedule 8.14 Perfection
Schedule 8.15 Transactions with Affiliates
Schedule 8.18 Environmental Matters
Schedule 8.19 Joint Ventures; Partnerships
Schedule 8.20 Bank Accounts
Schedule 8.21 Borrower's Fiscal Quarters
Schedule 8.22 Location of Books and Records
Schedule 8.24 Documents and/or Statements filed with the
Securities and Exchange Commission
Schedule 9.15(a) Agency Agreements (to be executed)
Schedule 9.15(b) Credit Card Provider Notices (to be executed)
Schedule 10.1 Existing Indebtedness; Tax Audits
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
Schedule 10.5.2 Permitted Dispositions
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AMENDED AND RESTATED
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is made
as of the 30th day of January, 1998, by and among (a) FILENE'S BASEMENT, INC.
(the "Borrower"), a Massachusetts corporation having its principal place of
business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (b) FILENE'S
BASEMENT CORP. (the "Guarantor"), a Massachusetts corporation having its
principal place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
(c) BANKBOSTON, N.A. (f/k/a The First National Bank of Boston) and the other
lending institutions listed on SCHEDULE 1 and (d) BANKBOSTON, N.A. (f/k/a The
First National Bank of Boston) as agent for itself and such other lending
institutions.
WHEREAS, pursuant to a Revolving Credit and Term Loan Agreement dated as
of May 23, 1996 (as amended from time to time, the "Original Credit Agreement")
by and among the Borrower, the Guarantor, the Banks and the Agent, the Banks
made available loans and other extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested certain amendments to the Original
Credit Agreement, including the making of a new Term Loan thereunder, and each
of the Banks and the Agent are willing to amend certain provisions of the
Original Credit Agreement on the terms and conditions set forth herein; and
NOW, THEREFORE, the Borrower, the Guarantor, the Banks and the Agent agree
that on the Closing Date the Original Credit Agreement is hereby amended and
restated in its entirety as set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth in
this sec.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ACCOUNTS RECEIVABLE. All rights of the Borrower to payment for goods sold,
leased or otherwise marketed in the ordinary course of business and all rights
of the Borrower to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with generally accepted accounting principles.
AFFILIATE. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENCY ACCOUNTS. The depository accounts maintained by the Guarantor, the
Borrower and their Subsidiaries.
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AGENCY ACCOUNT AGREEMENTS. The several Agency Account Agreements, dated as
of the Original Closing Date or such later date as set forth in sec.9.15 hereof,
among the Guarantor and/or the Borrower, as the case may be, the Agent and the
Agency Account Institutions, each such agreement to be in form and substance
reasonably satisfactory to the Agent.
AGENCY ACCOUNT INSTITUTIONS. The financial institutions with which the
Guarantor or the Borrower, as the case may be, maintain Agency Accounts.
AGENT. BankBoston, N.A. (f/k/a The First National Bank of Boston) acting
as agent for the Banks.
AGENT'S HEAD OFFICE. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
AGENT'S SPECIAL COUNSEL. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may be
approved by the Agent.
ASSIGNMENT AND ACCEPTANCE. See sec.20.1.
BALANCE SHEET DATE. February 1, 1997.
BANKS. BKB and the other lending institutions listed on SCHEDULE 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to sec.20.
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
BASE RATE LOANS. Those Revolving Credit Loans and all or any portion of
the Term Loan bearing interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association, in its individual capacity.
BLOCKED ACCOUNT. See sec.3.2.2 hereof.
BLOCKED ACCOUNT AGREEMENT. The Blocked Account Agreement, dated as of the
Original Closing Date, and amended and ratified as of the Closing Date, among
the Guarantor and/or the Borrower, as the case may be, and the Agent, and in
form and substance satisfactory to the Agent.
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BORROWER. As defined in the preamble hereto.
BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to sec.9.4(f), which is equal to
the sum of:
(a) 85% of Eligible Accounts Receivable; PLUS
(b) 60% of the net book value (determined on a first-in first-out
basis at cost on a generally accepted accounting principles basis) of
Eligible Inventory; plus
(c) 60% of the Maximum Drawing Amount of documentary Letters of
Credit issued in connection with the shipment of otherwise Eligible
Inventory.
BORROWING BASE REPORT. A Borrowing Base Report signed by the chief
financial officer of the Borrower or any other authorized officer of the
Borrower and in substantially the form of EXHIBIT A hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts and New York, New York, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by the
Guarantor, the Borrower or any of their Subsidiaries in connection with the
purchase or lease by the Guarantor, the Borrower or any of their Subsidiaries of
Capital Assets that would be required to be capitalized and shown on the balance
sheet of such Person in accordance with generally accepted accounting
principles.
CAPITALIZED LEASES. Leases under which the Guarantor, the Borrower or any
of their Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with generally accepted accounting
principles.
CASH COLLATERAL AGREEMENT. The cash collateral agreement, dated as of the
Original Closing Date and amended and ratified as of the Closing Date among the
Guarantor, the Borrower and the Agent, such agreement to be in form and
substance reasonably satisfactory to the Agent.
CERCLA. See sec.8.18.
CLOSING DATE. The first date on which the conditions set forth in sec.12
have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.
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CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the Guarantor,
the Borrower and their Subsidiaries that are or are intended to be subject to
the security interests and mortgages created by the Security Documents.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE 1
hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time pursuant to the provisions of this Credit Agreement; or if such commitment
is terminated pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set forth
on SCHEDULE 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
COMPLIANCE CERTIFICATE. See sec.9.4(d).
CONSOLIDATED or CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Guarantor, the Borrower
and their Subsidiaries, consolidated in accordance with generally accepted
accounting principles.
CONSOLIDATED FIXED OBLIGATIONS. With respect to any period of four
consecutive fiscal quarters, an amount equal to the sum of all regularly
scheduled payments of principal and interest on Indebtedness that become due and
payable or that are to become due and payable during such fiscal period pursuant
to any agreement or instrument to which the Guarantor or any of its Subsidiaries
is a party relating to the borrowing of money or the obtaining of credit or in
respect of any Capitalized Lease. Demand obligations shall be deemed to be due
and payable during any fiscal period during which such obligations are
outstanding.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Guarantor and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
items of income and excluding any gain or loss of the Guarantor and its
Subsidiaries from the sale of the Somerville Distribution Center. Any tax
refunds received by the Guarantor or any of its Subsidiaries during any period
shall not be included in Consolidated Net Income.
CONSOLIDATED OPERATING CASH FLOW. For any period an amount equal to EBITDA
for such period, LESS, Capital Expenditures made during such period, excluding
Capital Expenditures made during the fiscal year ending January 30, 1999 for the
opening of new Stores or the remodeling of existing Stores up to an aggregate
amount not to exceed $12,500,000, LESS, cash payments for all current income
taxes made by the Guarantor, the Borrower and their Subsidiaries during such
period. Notwithstanding the foregoing and subject to the other requirements of
the Credit Agreement, Capital Expenditures for the opening of new Stores or the
remodeling of existing of Stores are not limited to $12,500,000 in any fiscal
year.
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CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate amount
of interest required to be paid or accrued by the Guarantor and its Subsidiaries
during such period on all Indebtedness of the Guarantor and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of Capitalized Leases and including
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees or expenses in connection with the borrowing of money, but reduced for any
interest income paid to the Guarantor and its Subsidiaries.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with sec.2.7.
CREDIT AGREEMENT. This Amended and Restated Revolving Credit and Term Loan
Agreement, including the Schedules and Exhibits hereto.
CREDIT CARD PROVIDERS. The banks and finance companies listed on SCHEDULE
3.2.2(b) hereto.
DEFAULT. See sec.14.1.
DISTRIBUTION. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the Guarantor or the Borrower,
other than dividends payable solely in shares of common stock of the Guarantor
or the Borrower; the purchase, redemption, or other retirement of any shares of
any class of capital stock of the Guarantor or the Borrower, directly or
indirectly through a Subsidiary of the Guarantor or the Borrower or otherwise;
the return of capital by the Guarantor or the Borrower to its shareholders as
such; or any other distribution on or in respect of any shares of any class of
capital stock of the Guarantor or the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
DRAWDOWN DATE. The date on which any Revolving Credit Loan or the Term
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with sec.2.7 or all or any portion of
the Term Loan is converted or continued in accordance with sec.4.5.2.
EBITDA. With respect to any fiscal period, an amount equal to the sum of
(a) Consolidated Net Income for such period plus (b) depreciation and
amortization for such period, plus (c) without duplication, other non-cash
charges (exclusive of current period accruals) made in calculating Consolidated
Net Income for such period, including, without limitation, the charges described
on SCHEDULE 1(a) hereto incurred in the fiscal quarters referred to on such
Schedule relating to the write-down of inventory, equipment and other related
assets, plus (d) tax expense for such period, plus (e) Consolidated Total
Interest Expense during such period to the extent deducted in the calculation of
Consolidated Net
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Income for such period, all as determined in accordance with generally accepted
accounting principles.
ELIGIBLE ACCOUNTS RECEIVABLE. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (a) that the Borrower reasonably and in good faith
determines to be collectible; (b) that are with account debtors that (i) are not
Affiliates of the Borrower, (ii) are Credit Card Providers, (iii) are not
insolvent or involved in any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are, in the Agent's reasonable judgment, creditworthy; (c) that are in
payment of obligations that have been fully performed and are not subject to
dispute or any other similar claims that would reduce the cash amount payable
therefor; (d) that are not subject to any pledge, restriction, security interest
or other lien or encumbrance other than those created by the Loan Documents and
Permitted Liens which are subordinate to the liens of the Agent; (e) in which
the Agent has a valid and perfected first priority security interest; (f) that
are not outstanding for more than five (5) Business Days past the date the
applicable Credit Card Provider is required to make payment and that are not
outstanding for more than ten (10) Business Days past the date of sale of the
underlying goods to a retail customer in the ordinary course of business; (g)
that are not due from an account debtor located in Indiana, Minnesota or New
Jersey unless such Borrower (A) has received a certificate of authority to do
business and is in good standing in such state or (B) has filed a notice of
business activities report with the appropriate office or agency of such state
for the current year; (h) that are not due from any single account debtor if
more than fifteen percent (15%) of the aggregate amount of all Accounts
Receivable owing from such account debtor would otherwise not be Eligible
Accounts Receivable; (i) that are payable in Dollars; (j) that are not secured
by a letter of credit unless the Agent has a prior perfected security interest
in such letters of credit; and (k) that are not payable from an office outside
of the United States.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) 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, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution approved by
the Agent, such approval not to be unreasonably withheld.
ELIGIBLE INVENTORY. With respect to the Borrower, finished goods inventory
owned by the Borrower; PROVIDED that Eligible Inventory shall not include any
inventory (a) held on consignment, or not otherwise owned by the Borrower, (b)
which is subject to any legal
14
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encumbrance other than Permitted Liens, (c) which is not in the possession of
the Borrower unless (i) the Agent has received a waiver from the party in
possession of such inventory in form and substance reasonably satisfactory to
the Agent or (ii) such inventory is in transit from one Permitted Inventory
Location to another Permitted Inventory Location, and the total duration of such
transit time is not more than two (2) Business Days, (d) which is subject to any
lien, encumbrance or security interest which is prior to the liens granted to
the Agent (other than landlord's or lessor's liens under leases to which the
Borrower is a party provided no amount secured by such lien has become due and
payable and not been paid), (e) as to which appropriate Uniform Commercial Code
financing statements showing the Borrower as debtor and the Agent as secured
party have not been filed in the proper filing office or offices in order to
perfect the Agent's security interest therein, (f) which has been shipped to a
customer of the Borrower regardless of whether such shipment is on a consignment
basis, (g) which is not located at a Permitted Inventory Location unless such
inventory is in transit from one Permitted Inventory Location to another
Permitted Inventory Location, and the total duration of such transit time is not
more than two (2) Business Days, (h) which the Borrower reasonably deems to be
obsolete or not marketable consistent with its past practices, PROVIDED that
such practices shall be subject to the review and approval of the Agent after
the occurrence and during the continuance of an Event of Default, (i) which is
Packaway Inventory to the extent such inventory exceeds ten percent (10%) of
Eligible Inventory or (j) which has been owned by the Borrower for more than one
(1) year (except to the extent permitted in clause (i) of this definition).
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
sec.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See sec.8.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under sec.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of sec.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other
15
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Eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the rate per annum (rounded upwards to
the nearest 1/16 of one percent) at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the Reference Bank to
which such Interest Period applies, divided by (ii) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
EURODOLLAR RATE LOANS. Those Revolving Credit Loans and all or any portion
of the Term Loan bearing interest calculated by reference to the Eurodollar
Rate.
EVENT OF DEFAULT. See sec.14.1.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in sec.11, whether
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the
extent consistent with such principles, the accounting practice of the Guarantor
and the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Guarantor and the Borrower adopting the same principles,
provided that in each case referred to in this definition of "generally accepted
accounting principles" a certified public accountant would, insofar as the use
of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of sec.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTOR. As defined in the preamble hereof.
GUARANTY. The Guaranty, dated as of the Original Closing Date and amended
and ratified as of the Closing Date, made by the Guarantor in favor of the Banks
and the Agent pursuant to which the Guarantor guaranties to the Banks and the
Agent the payment and
16
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performance of the Obligations and in form and substance satisfactory to the
Banks and the Agent.
HAZARDOUS SUBSTANCES. See sec.8.18(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit. For avoidance of
doubt, it is agreed amongst the parties hereto that "Indebtedness" does not
include obligations in respect of operating leases.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the first day of the
calendar month which follows the Drawdown Date thereof and (b) as to any
Eurodollar Rate Loan, the last day of such Interest Period.
INTEREST PERIOD. With respect to each Revolving Credit Loan or all or any
relevant portion of the Term Loan, (a) initially, the period commencing on the
Drawdown Date of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrower in a Loan Request (i) for any Base Rate
Loan, the last day of the calendar month; and (ii) for any Eurodollar Rate Loan,
1, 2 or 3 months; and (b) thereafter, each period commencing on the day after
the last day of the next preceding Interest Period applicable to such Revolving
Credit Loan or all or such portion of the Term Loan and ending on the last day
of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; PROVIDED that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
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(C) if the Borrower shall fail to give notice as provided in
sec.2.7, the Borrower shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the continuance
of all Base Rate Loans as Base Rate Loans on the last day of the then
current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar 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 end on the last Eurodollar
Business Day of a calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LANDLORD WAIVER. A waiver from the lessor or sublessor of property leased
by the Borrower as lessee in substantially the form of EXHIBIT G hereto or
otherwise approved by the Agent in its sole reasonable discretion.
LEASED REAL ESTATE. See sec.8.18.
LETTER OF CREDIT. See sec.5.1.1.
LETTER OF CREDIT APPLICATION. See sec.5.1.1.
LETTER OF CREDIT PARTICIPATION. See sec.5.1.4.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.
LOAN REQUEST. See sec.2.6.
LOANS. The Revolving Credit Loans and the Term Loan.
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MAJORITY BANKS. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
MATURITY DATE. February 3, 2001.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may draw at any time under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MONOGRAM AGREEMENT. The Credit Card Program Agreement dated as of July 20,
1995 among the Borrower, Monogram Credit Card Bank of Georgia and General
Electric Capital Corporation, as amended and in effect on the Closing Date and
as further amended in accordance with the provisions of sec.10.10.
MORTGAGED PROPERTY. Any Real Estate which is subject to any Mortgage.
MORTGAGES. The several mortgages and deeds of trust, dated as of the
Original Closing Date, and amended and ratified as of the Closing Date, from the
Borrower to the Agent with respect to the leasehold interests of the Borrower in
certain Real Estate and in form and substance satisfactory to the Agent.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of sec.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
NET PROCEEDS. With respect to any sale of any assets of the Guarantor, the
Borrower or any of their Subsidiaries, the gross consideration received by the
Guarantor, the Borrower or any of their Subsidiaries from such sale, net of
commissions, direct sales costs, normal closing adjustments, income taxes
attributable to such sale and professional fees and expenses incurred directly
in connection therewith, to the extent the foregoing are actually paid in
connection with such sale.
NOTES. The Term Notes and the Revolving Credit Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of the
Guarantor, the Borrower and their Subsidiaries to any of the Banks and the
Agent, individually or collectively, whether arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof, or arising or incurred in connection with any interest rate
protection arrangements, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.
OPERATING ACCOUNT. See sec.2.6.2.
ORIGINAL CLOSING DATE. May 23, 1996.
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ORIGINAL CREDIT AGREEMENT. See preamble.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
OWNED REAL ESTATE. See sec.8.18.
PACKAWAY INVENTORY. Inventory of the Borrower which the Borrower
reasonably determines to be "packaway inventory" in accordance with its past
practices which inventory would include preseason merchandise purchased from
overseas or domestic vendors and retail stocks and which would not include
inventory recalled from any Store.
PBGC. The Pension Benefit Guaranty Corporation created by sec.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in the
Security Agreement.
PERMITTED CASH COLLATERAL INVESTMENTS. Investments of cash collateral made
in accordance with the provisions of sec.10.3 hereof and the Cash Collateral
Agreement in which the Agent has a first priority perfected security interest.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by sec.10.2.
PERMITTED INVENTORY LOCATIONS. The Stores and warehouse facilities of the
Borrower located in the United States of America and listed on SCHEDULE 8.22
hereto, as such SCHEDULE 2 may be supplemented from time to time in accordance
with the provisions of sec.9.4(j).
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
RCRA. See sec.8.18(a).
REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Guarantor, the Borrower or any of their Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REFERENCE BANK. BKB.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in sec.5.2.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to sec.2.
20
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REVOLVING CREDIT NOTE RECORD. A Record with respect to a Revolving Credit
Note.
REVOLVING CREDIT NOTES. See sec.2.4.
▇▇▇▇. See sec.8.18(a).
SECURITY AGREEMENT. The Security Agreement, dated as of the Original
Closing Date and ratified and confirmed as of the Closing Date, among the
Borrower, the Guarantor and the Agent and in form and substance satisfactory to
the Agent.
SECURITY DOCUMENTS. The Guaranty, the Security Agreement, the Mortgages,
the Trademark Assignment, the Cash Collateral Agreement, the Blocked Account
Agreement, the Stock Pledge Agreement and the Security Documents Amendment.
SECURITY DOCUMENTS AMENDMENT. The Security Documents Amendment dated as of
the Closing Date, among the Borrower, the Guarantor and the Agent, and in form
and substance satisfactory to the Agent.
SETTLEMENT. The making of, or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Revolving Credit Loans to be equal to
such Bank's Commitment Percentage of the outstanding amount of such Revolving
Credit Loans, in any case where, prior to such event or action, the actual share
is not so equal.
SETTLEMENT AMOUNT. See sec.2.10.1.
SETTLEMENT DATE. (a) The Business Day immediately following the Agent's
becoming aware of the existence of an Event of Default, (b) any Business Day on
which the amount of Revolving Credit Loans outstanding from BKB in its
individual capacity and in its capacity as Agent PLUS BKB's Commitment
Percentage of the sum of the Maximum Drawing Amount and any Unpaid Reimbursement
Obligations is equal to or greater than BKB's Commitment Percentage of the Total
Commitment, (c) the Business Day following notice by BKB to the Banks of its
intent to effect a Settlement, (d) any Business Day on which (i) the amount of
outstanding Revolving Credit Loans decreases and (ii) the amount of BKB's
Revolving Credit Loans outstanding equals zero Dollars ($0), (e) any day on
which any conversion of a Base Rate Loan to a Eurodollar Rate Loan occurs, (f)
the Maturity Date, (g) Friday of each week, or if Friday is not a Business Day,
the Business Day immediately following such Friday, and (h) the Drawdown Date
relating to any Loan Request.
SETTLING BANK. See sec.2.10.1.
SOMERVILLE DISTRIBUTION CENTER. The Borrower's two parcels of land and
distribution center situated on ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, dated as of the
Original Closing Date and amended and ratified as of the Closing Date, between
the Guarantor and the Agent and in form and substance satisfactory to the Agent.
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STORE. Any retail store currently owned or leased or hereafter acquired or
leased by the Guarantor, the Borrower or any of their Subsidiaries.
SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Collectively, (a) the
Supplementary Executive Retirement Plan of the Borrower effective as of August
1, 1988, as amended by Amendment Number 1 dated as of August 1, 1988, by a
Second Amendment dated as of August 1, 1995 and by Amendment No. 3 dated January
7, 1997; (b) the Executive Severance Plan for ▇▇▇▇▇▇ ▇▇▇▇▇▇, dated as of August,
1995; (c) the Executive Split Dollar Life Insurance Agreement (Collateral
Assignment Method) between the Borrower and ▇▇▇▇▇▇ ▇▇▇▇▇▇, dated June 5, 1994;
(d) the Executive Severance Plan for ▇▇▇▇ ▇▇▇▇▇▇▇, III, dated August, 1995; (e)
the Executive Split Dollar Life Insurance Agreement (Collateral Assignment
Method) between the Borrower and ▇▇▇▇ ▇▇▇▇▇▇▇, dated June 5, 1994; (f) the
Executive Severance Plan Trust Agreement dated June 4, 1994 between the
Guarantor and the trustee thereof; (g) the Executive Severance Plan for ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq., dated July 15, 1997; (h) the Executive Split Dollar Life
Insurance Agreement (Collateral Assignment Method) between the Borrower and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., dated July 15, 1997; and (i) plans of a similar type and
nature which may hereafter be created for the benefit of W. ▇▇▇ ▇▇▇▇▇▇▇▇▇.
TERM LOAN. The term loan made or to be made by the Banks to the Borrower
on the Closing Date in the aggregate principal amount of $12,500,000 pursuant to
sec.4.1.
TERM LOAN PERCENTAGE. With respect to each Bank, the percentage set forth
on SCHEDULE 1 hereto as such Bank's percentage of the Term Loan.
TERM NOTES. See sec.4.2.
TERM NOTE RECORD. A Record with respect to a Term Note.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TRADEMARK ASSIGNMENT. The Trademark Assignment, dated as of the Original
Closing Date and amended and ratified as of the Closing Date, made by the
Borrower in favor of the Agent and in form and substance satisfactory to the
Agent.
TYPE. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
22
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UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, sec.5.2.
VOTING STOCK. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "sec." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with sec.2.6, such sums as are requested by the
Borrower up to a maximum aggregate amount outstanding (after giving
23
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effect to all amounts requested) at any one time equal to such Bank's Commitment
MINUS such Bank's Commitment Percentage of the sum of the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations, PROVIDED that the sum of the
outstanding amount of the Revolving Credit Loans (after giving effect to all
amounts requested) PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the lesser of (a) the Total Commitment
and (b) the Borrowing Base MINUS the outstanding amount of the Term Loan, and
PROVIDED FURTHER that in no event shall the sum of the outstanding amount of the
Term Loan PLUS the outstanding amount of Revolving Credit Loans PLUS the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations exceed the Borrowing
Base. The Revolving Credit Loans shall be made PRO RATA in accordance with each
Bank's Commitment Percentage. Each request for a Revolving Credit Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in sec.12 and sec.13, in the case of the initial Revolving
Credit Loans to be made on the Closing Date, and sec.13, in the case of all
other Revolving Credit Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of three-eighths of one percent (3/8%)
per annum on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Maturity Date by which the Total Commitment
MINUS the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the outstanding amount of Revolving Credit Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on the Revolving Credit Maturity Date or any earlier date on which
the Commitments shall terminate.
2.3. REDUCTION OF COMMITMENT. The Borrower shall have the right, at any
time and from time to time upon five (5) Business Days' written notice to the
Agent, to reduce by $5,000,000 or an integral multiple of $1,000,000 or
terminate entirely the Total Commitment, whereupon the Commitments of the Banks
shall be reduced PRO RATA in accordance with their respective Commitment
Percentages of the amount specified in such notice, or as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this sec.2.3, the Agent will notify the Banks of the substance
thereof. If the Borrower repays or prepays all outstanding Revolving Credit
Loans and the Total Commitment is terminated in its entirety by the Borrower,
whether in a single transaction or in a series of related transactions, the
Borrower shall pay to the Agent for the account of the Banks in accordance with
their Commitment Percentages a premium in an amount calculated as follows:
(a) if such repayment or prepayment and termination is concluded on
or prior to the first anniversary of the Closing Date, an amount equal to
one percent (1%) of the Total Commitment as of the Closing Date; and
(b) if such repayment or prepayment and termination is concluded
after the first anniversary of the Closing Date but on or prior to the
second anniversary of the Closing Date, an amount equal to one-half of one
percent (1/2%) of the Total Commitment of the Closing Date; and
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(c) if such repayment or prepayment is concluded after the second
anniversary of the Closing Date, no premium shall be payable.
Notwithstanding the foregoing, no premium shall be payable under this sec.2.3 to
any Bank which is offered continued participation in a replacement credit
facility due to the repayment or prepayment of the Revolving Credit Loans and
the termination of the Total Commitment if (i) such repayment or prepayment is
made from the proceeds of such replacement credit facility, and (ii) if such
replacement credit facility is not with the Agent, (A) such replacement credit
facility is not, directly or indirectly, secured by any collateral and (B) the
Agent has been offered and has declined the agency for such replacement credit
facility both prior to any other lender and after each such other lender has
submitted to the Borrower, and the Agent has reviewed, its final term sheet for
such replacement credit facility. Any Bank which is not offered continued
participation in such replacement credit facility shall receive its Commitment
Percentage of the premium applicable under paragraph (a) or (b) of this sec.2.3.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate amended and restated promissory notes of the Borrower in
substantially the form of EXHIBIT B hereto (each a "Revolving Credit Note"),
dated as of the Closing Date (or such other date as a Bank may become a party
hereto in accordance with sec.20 hereof) and completed with appropriate
insertions. One Revolving Credit Note shall be payable to the order of each Bank
in a principal amount equal to such Bank's Commitment or, if less, the
outstanding amount of all Revolving Credit Loans made by such Bank, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall, absent manifest error, be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided in
sec.6.10,
(a) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the Base Rate; and
(b) each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate of two percent (2%)
per annum above the Eurodollar Rate determined for such Interest Period.
The Borrower promises to pay interest on each Revolving Credit Loan in arrears
on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
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2.6.1. LOAN REQUEST. The Borrower shall give to the Agent written
notice in the form of EXHIBIT C hereto (or telephonic notice confirmed in
a writing in the form of EXHIBIT C hereto) of each Revolving Credit Loan
requested hereunder (a "Loan Request") (a) no later than 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan and (b)
no later than 10:30 a.m. two (2) Eurodollar Business Days prior to the
proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (i) the principal amount of the Revolving Credit Loan requested,
(ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) if
such Revolving Credit Loan is a Eurodollar Rate Loan, the Interest Period
for such Revolving Credit Loan and (iv) the Type of such Revolving Credit
Loan. Promptly upon receipt of any such notice, the Agent shall notify
each of the Banks thereof. Each Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the
Revolving Credit Loan requested from the Banks on the proposed Drawdown
Date. Each Loan Request for a Base Rate Loan shall be in a minimum
aggregate amount of $100,000 or an integral multiple thereof except that
in the event that the Agent has declined to make a Revolving Credit Loan
pursuant to sec.2.6.2, there shall be no minimum amount required for a
Base Rate Loan requested in lieu of such advance by the Agent. Each Loan
Request for a Eurodollar Rate Loan shall be in a minimum aggregate amount
of $1,000,000 or an integral multiple of $100,000 in excess thereof.
2.6.2. SWING LINE. Notwithstanding the notice and minimum amount
requirements set forth in sec.2.6.1, but otherwise in accordance with the
terms and conditions of this Credit Agreement, the Agent may, in its sole
discretion and without conferring with the Banks, make Revolving Credit
Loans to the Borrower (a) by entry of credits to the Borrower's operating
account with the Agent (the "Operating Account") to cover checks or other
charges which the Borrower has drawn or made against such account or (b)
in an amount as otherwise requested by the Borrower. The Borrower hereby
requests and authorizes the Agent to make from time to time such Revolving
Credit Loans by means of appropriate entries of such credits sufficient to
cover checks and other charges then presented. The Borrower acknowledges
and agrees that the making of such Revolving Credit Loans shall, in each
case, be subject in all respects to the provisions of this Credit
Agreement as if they were Revolving Credit Loans covered by a Loan Request
including, without limitation, the limitations set forth in sec.2.1 and
the requirements that the applicable provisions of sec.sec.12 and 13, in
the case of Revolving Credit Loans made on the Closing Date, and sec.13,
in the case of all Revolving Credit Loans, be satisfied. All actions taken
by the Agent pursuant to the provisions of this sec.2.6.2 shall be
conclusive and binding on the Borrower absent the Agent's gross negligence
or willful misconduct. Prior to a Settlement, interest payable on such
Revolving Credit Loans shall be for the account of the Agent and payment
of principal on such Revolving Credit Loans shall be for the account of
BKB.
2.6.3. REIMBURSEMENT OBLIGATIONS. In addition to requests pursuant
to sec.sec.2.6.1 and 2.6.2, the Borrower shall be deemed to have made a
request for a Revolving Credit Loan equal to the amount of any
Reimbursement Obligations under any Letter of Credit which is presented to
and honored by the Agent. The Borrower acknowledges and agrees that the
making of such Revolving Credit Loans shall, in
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each case be subject in all respects to the provisions of this Credit
Agreement as if they were Revolving Credit Loans covered by a Loan
Request.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, PROVIDED that (a)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent prior written notice of such
election no later than 11:00 a.m. (Boston time) on the date of such
election; (b) with respect to any such conversion of a Base Rate Loan to a
Eurodollar Rate Loan, the Borrower shall give the Agent prior written
notice of such election no later than 10:30 a.m. (Boston time) two (2)
Eurodollar Business Days prior to the effectiveness of such election; (c)
with respect to any such conversion of a Eurodollar Rate Loan into a
Revolving Credit Loan of another Type, such conversion shall, at the
Borrower's option, either be made on the last day of the Interest Period
with respect thereto or be made subject to the provisions of sec.6.9(c) of
this Credit Agreement and (d) no Loan may be converted into a Eurodollar
Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office
or its Eurodollar Lending Office, as the case may be. All or any part of
outstanding Revolving Credit Loans of any Type may be converted into a
Revolving Credit Loan of another Type as provided herein, PROVIDED that
any partial conversion shall be in an aggregate principal amount of
$1,000,000 or a whole multiple of $100,000. Each Conversion Request
relating to the conversion of a Revolving Credit Loan to a Eurodollar Rate
Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto
by compliance by the Borrower with the notice provisions contained in
sec.2.7.1; PROVIDED that no Eurodollar Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of the Agent active
upon the Borrower's account have actual knowledge. The Agent shall notify
the Banks and the Borrower promptly when any such automatic conversion
contemplated by this sec.2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all Eurodollar Rate Loans having the same Interest Period shall not be
less than $1,000,000 or a whole multiple of $100,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
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2.8.1. FUNDING PROCEDURES. Not later than 1:00 p.m. (Boston time) on
the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the
amount of the requested Revolving Credit Loans. Upon receipt from one or
more of the Banks of such amount, and upon receipt of the documents
required by sec.sec.12 and 13 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit
Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified in writing
to the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount of
such Bank's Commitment Percentage of the Revolving Credit Loans to be made
on such Drawdown Date, and the 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 Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, TIMES (b) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, TIMES (c) a
fraction, the numerator of which is the number of days that elapse from
and including such Drawdown Date to the date on which the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be, absent manifest error, PRIMA FACIE
evidence of the amount due and owing to the Agent by such Bank. If the
amount of such Bank's Commitment Percentage of such Revolving Credit Loans
is not made available to the Agent by such Bank within three (3) Business
Days following such Drawdown Date, the 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 Drawdown
Date; PROVIDED that such Bank shall indemnify the Agent and hold the Agent
harmless from and against any loss, cost or expense (including loss of
anticipated profits) that the Agent may sustain or incur as a consequence
of the Borrower's repayment, upon the Agent's demand, of such Revolving
Credit Loans, including any such loss or expense arising from interest or
fees payable by the Agent to lenders of funds obtained by it in order to
maintain its Eurodollar Rate Loans.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to sec.9.4(f))
by the Agent by reference to the Borrowing Base Report delivered to the Banks
and the Agent pursuant to sec.9.4(f).
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2.10. SETTLEMENTS; FAILURE TO MAKE FUNDS AVAILABLE.
2.10.1. NOTICE TO BANKS. On each Settlement Date, the Agent shall,
not later than 12:00 noon (Boston time), give telephonic or facsimile
notice (a) to the Banks and the Borrower of the respective outstanding
amount of Revolving Credit Loans made by the Agent on behalf of the Banks
pursuant to sec.2.6.2 from the immediately preceding Settlement Date
through the close of business on the prior day and (b) to the Banks of the
amount (a "Settlement Amount") that each Bank (the "Settling Bank") shall
pay to effect a Settlement of any Revolving Credit Loan. A statement of
the Agent submitted to the Banks and the Borrower with respect to any
amounts owing under this sec.2.10 shall, absent manifest error, be PRIMA
FACIE evidence of the amount due and owing. The Settling Bank shall, not
later than 2:00 p.m. (Boston time) on such Settlement Date, effect a wire
transfer of immediately available funds to the Agent in the amount of the
Settlement Amount. All funds advanced by any Bank as a Settling Bank
pursuant to this sec.2.10 shall for all purposes be treated as a Revolving
Credit Loan made by such Settling Bank to the Borrower and all funds
received by any Bank pursuant to this sec.2.10 shall for all purposes be
treated as repayment of amounts owed with respect to Revolving Credit
Loans made by such Bank. In the event that any bankruptcy, reorganization,
liquidation, receivership or similar cases or proceedings in which the
Borrower is a debtor prevent a Settling Bank from making any Revolving
Credit Loan to effect a Settlement as contemplated hereby, such Settling
Bank will make such disposition and arrangements with the other Banks with
respect to such Revolving Credit Loans, either by way of purchase of
participations, distribution, PRO TANTO assignment of claims, subrogation
or otherwise as shall result in each Bank's share of the outstanding
Revolving Credit Loans being equal, as nearly as may be, to such Bank's
Commitment Percentage of the outstanding amount of the Revolving Credit
Loans.
2.10.2. DELINQUENT BANKS. If any Bank makes available to the Agent
its Settlement Amount on a date after such Settlement Date, such Bank
shall pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times (b)
the amount of such Settlement Amount, times (c) a fraction, the numerator
of which is the number of days that elapse from and including such
Settlement Date to the date on which the amount of such Settlement Amount
shall become immediately available to the Agent, and the denominator of
which is 360. A statement of the Agent submitted to such Bank with respect
to any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such Bank. If such Bank's
Settlement Amount is not made available to the Agent by such Bank within
three (3) Business Days following such Settlement Date the 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 as
of such Settlement Date; PROVIDED that such Bank shall indemnify the Agent
and hold the Agent harmless from and against any loss, cost or expense
(including loss of anticipated profits) that the Agent may sustain or
incur as a consequence of the Borrower's repayment, upon the Agent's
demand, of such Revolving Credit Loans,
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including any such loss or expense arising from interest or fees payable
by the Agent to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans.
2.10.3. ADVANCES. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Settlement
Date the amount of its Settlement Amount (a) shall not relieve any other
Bank from its several obligations hereunder to make available to the Agent
the amount of such other Bank's Settlement Amount and (b) shall not impose
upon such other Bank any liability with respect to such failure or refusal
or otherwise increase the Commitment of such other Bank.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Revolving Credit Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
3.2.1. OUTSTANDINGS IN EXCESS OF COMMITMENT OR BORROWING BASE. If at
any time the sum of the outstanding amount of the Revolving Credit Loans,
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations
exceeds the lesser of (a) the Total Commitment and (b) the Borrowing Base
MINUS the outstanding amount of the Term Loan, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: FIRST, to any Unpaid Reimbursement
Obligations and any other Obligations then due and payable; SECOND, to the
Revolving Credit Loans (first, to the payment of those Revolving Credit
Loans that are Base Rate Loans and second, to the payment of, or at the
Borrower's option, cash collateralization in accordance with the terms of
the Cash Collateral Agreement (which cash collateral may be invested in
Permitted Cash Collateral Investments) those Revolving Credit Loans that
are Eurodollar Rate Loans); THIRD, to the payment of that portion of the
Term Loan that is a Base Rate Loan; FOURTH, to the payment or, at the
Borrower's option, cash collateralization in accordance with the terms of
the Cash Collateral Agreement (which cash collateral may be invested in
Permitted Cash Collateral Investments), of that portion of the Term Loan
that is a Eurodollar Rate Loan; and FIFTH, to provide to the Agent cash
collateral (which cash collateral may be invested in Permitted Cash
Collateral Investments) for Reimbursement Obligations as contemplated by
sec.5.2(b) and (c) and for any other Obligations not then due and payable,
PROVIDED, HOWEVER, that notwithstanding anything to the contrary contained
in this sec.3.2.1, any amounts which are to be applied to the Revolving
Credit Loans pursuant to this sec.3.2.1. shall, to the extent BKB has
advanced Revolving Credit Loans to the Borrower pursuant to sec.2.6.2
hereof for which a Settlement has not occurred, first be paid to BKB to be
applied to any Revolving Credit Loans made by BKB to the Borrower pursuant
to sec.2.6.2 hereof and in which a Settlement has not, at the time of such
repayment, been effected. Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated
among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to
the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
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3.2.2. BLOCKED ACCOUNT PROVISIONS. (a) Each of the Guarantor and its
Subsidiaries will (i) maintain a blocked depository account (the "Blocked
Account") with the Agent and under the control of the Agent, as
contemplated by the terms of the Blocked Account Agreement, (ii) direct or
has directed (1) each Agency Account Institution in writing to cause all
funds in excess of the amount set forth opposite such Agency Account
Institutions' name on SCHEDULE 3.2.2.(A) hereof (which amount is net of
funds in the process of transfer to the Agent) held by such Agency Account
Institution in the Agency Accounts to be transferred daily (or such other
more frequent period as the Agent or the Guarantor or such Subsidiary
requests) to, and only to, the Agent for application to the Revolving
Credit Loans in accordance with this sec.3.2.2(a) and (2) each Person set
forth on SCHEDULE 3.2.2(B) hereto in writing to make all payments on or
with respect to any of the Collateral due or to become due to the
Guarantor or any of its Subsidiaries to the Guarantor or such Subsidiary
directly to the Blocked Account or the Agency Accounts, or immediately
endorse and deposit any such payments received directly into the Blocked
Account, with each of the Guarantor and the Borrower agreeing that any
money, money orders, checks or other payments received by the Guarantor or
Borrower, as the case may be, will be held by the Guarantor or Borrower,
as the case may be, in trust for the benefit of the Agent and the Banks
and shall turn such proceeds promptly over to the Agent in the identical
form received (with appropriate endorsements) by deposit to any Agency
Account or the Blocked Account and (iii) direct in writing its account
debtors and obligors on instruments or other obligors of the Guarantor or
any of its Subsidiaries with respect to any of the Collateral to make all
payments on or with respect to any of the Collateral due or to become due
to the Guarantor or any of its Subsidiaries to the Guarantor or such
Subsidiary directly to the Blocked Account or the Agency Accounts, or
immediately endorse and deposit any such payments received directly into
the Blocked Account, with each of the Guarantor and the Borrower agreeing
that any money, money orders, checks or other payments received by the
Guarantor or Borrower, as the case may be, will be held by the Guarantor
or Borrower, as the case may be, in trust for the benefit of the Agent and
the Banks and shall turn such proceeds promptly over to the Agent in the
identical form received (with appropriate endorsements) by deposit to any
Agency Account or the Blocked Account. The Agent shall, pursuant to
arrangements satisfactory to the Agent, (i) on the same Business Day as
receipt by the Agent of good collected funds constituting cash proceeds
from account debtors, obligors, or (as the case may be) the Guarantor or
such Subsidiary so deposited in the Blocked Account, (ii) immediately
following the receipt by the Agent of any and all cash proceeds from any
Agency Account (or such later or earlier date as the Agent determines that
good collected funds will be received by the Agent), and (iii) on a
provisional basis until final receipt of good collected funds, apply all
such cash proceeds which were deposited to the Blocked Account in the form
of money, checks or like items FIRST, to any Unpaid Reimbursement
Obligations and any other Obligations then due and payable, SECOND, to the
payment of any Revolving Credit Loans that are Base Rate Loans, THIRD, to
the payment or, at the Borrower's option, cash collateralization in
accordance with the terms of the Cash Collateral Agreement (which cash
collateral may be invested in Permitted Cash Collateral Investments), of
any Revolving Credit Loans that are Eurodollar Rate Loans, and FOURTH, (A)
so long as no Default or Event of Default has occurred and is continuing,
to the credit of the Operating Account or (B) from and after the
occurrence and during
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the continuance of a Default or an Event of Default, to the cash
collateralization in accordance with the terms of the Cash Collateral
Agreement (which cash collateral may be invested in Permitted Cash
Collateral Investments) of (I) Letters of Credit in an amount equal to
103% of the Maximum Drawing Amount and (II) any other Obligations not then
due and payable and then, to the extent of any surplus, to the credit of
the Operating Account (it being understood that any amounts which are to
be applied to the Revolving Credit Loans pursuant to this sec.3.2.2.
shall, to the extent BKB has advanced Revolving Credit Loans to the
Borrower pursuant to sec.2.6.2 hereof for which a Settlement has not
occurred, first be paid to BKB to be applied to any Revolving Credit Loans
made by BKB to the Borrower pursuant to sec.2.6.2 hereof and in which a
Settlement has not, at the time of such repayment, been effected). For
purposes of the foregoing provisions of this sec.3.2.2, the Agent shall
not be deemed to have received any such cash proceeds on any day unless
received by the Agent before 3:00 p.m. (Boston time) on such day. Each of
the Guarantor and its Subsidiaries further acknowledges and agrees that
any such provisional credit by the Agent shall be subject to reversal if
final collection in good collected funds of the related item is not
received by the Agent in accordance with the Agent's customary procedures
and practices for collecting provisional items. The parties hereto hereby
agree that the Borrower shall be permitted to retain on any day an
aggregate of $35,000 in cash in each Store (with the Store located in
Boston, Massachusetts entitled to retain on any day an aggregate of
$120,000 in cash).
(b) The Guarantor and the Borrower jointly and severally agree to
pay to the Agent any and all reasonable fees, costs and expenses which the
Agent incurs in connection with the opening and maintaining of the Blocked
Account and the depositing for collection by the Agent of any check or
other item of payment. Absent gross negligence or willful misconduct by
the Agent, the Guarantor and the Borrower jointly and severally agree to
indemnify the Agent and to hold the Agent harmless from and against any
loss, cost or expense sustained or incurred by the Agent on account of any
claims of third parties arising in connection with the Agent's operation
of the Blocked Account or in respect of the Blocked Account Agreement.
4. THE TERM LOAN.
4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each Bank also agrees to lend to the Borrower on the
Closing Date the amount of its Term Loan Percentage of the principal amount of
$12,500,000; PROVIDED that in no event shall the sum of the outstanding amount
of the Term Loan PLUS the outstanding amount of Revolving Credit Loans PLUS the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceed the
Borrowing Base.
4.2. THE TERM NOTES. The Term Loan shall be evidenced by separate
promissory notes of the Borrower in substantially the form of EXHIBIT D hereto
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Term Loan Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Term Loan Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower
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irrevocably authorizes each Bank to make or cause to be made a notation on such
Bank's Term Note Record reflecting the original principal amount of such Bank's
Term Loan Percentage of the Term Loan and, at or about the time of such Bank's
receipt of any principal payment on such Bank's Term Note, an appropriate
notation on such Bank's Term Note Record reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall, absent manifest
error, be PRIMA FACIE evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Term Note Record shall not affect the obligations of the
Borrower hereunder or under any Term Note to make payments of principal of and
interest on any Term Note when due.
4.3. MANDATORY REPAYMENTS OF TERM LOAN.
4.3.1. SCHEDULE OF INSTALLMENT PAYMENTS OF PRINCIPAL OF TERM LOAN.
The Borrower promises to pay to the Agent for the account of the Banks the
principal amount of the Term Loan in nine (9) consecutive quarterly
installments in an amount equal to $500,000, such installments to be due
and payable on the last day of each fiscal quarter of each fiscal year of
the Borrower set forth on SCHEDULE 8.21 hereto, commencing on October 31,
1998, with a final payment on the Maturity Date in an amount equal to the
unpaid balance of the Term Loan.
4.3.2. ADDITIONAL MANDATORY PAYMENTS IF OUTSTANDINGS EXCEED THE
BORROWING BASE. (a) In the event that the outstanding amount of the Term
Loan exceeds the result of the Borrowing Base LESS the sum of the
outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
account of the Banks for application: FIRST, to any Unpaid Reimbursement
Obligations and any other Obligations then due and payable; SECOND, to the
Revolving Credit Loans (first, to the payment of those Revolving Credit
Loans that are Base Rate Loans and second, to the payment of, or at the
Borrower's option, cash collateralization in accordance with the terms of
the Cash Collateral Agreement (which cash collateral may be invested in
Permitted Cash Collateral Investments) those Revolving Credit Loans that
are Eurodollar Rate Loans); THIRD, to the payment of that portion of the
Term Loan that is a Base Rate Loan; FOURTH, to the payment or, at the
Borrower's option, cash collateralization in accordance with the terms of
the Cash Collateral Agreement (which cash collateral may be invested in
Permitted Cash Collateral Investments), of that portion of the Term Loan
that is a Eurodollar Rate Loan; and FIFTH, to provide to the Agent cash
collateral (which cash collateral may be invested in Permitted Cash
Collateral Investments) for Reimbursement Obligations as contemplated by
sec.5.2(b) and (c) and for any other Obligations not then due and payable.
Any payments of the Term Loan made pursuant to this sec.4.3.2(a) shall be
applied against the scheduled installments of principal due on the Term
Loan pursuant to sec.4.3.1 in the inverse order of maturity.
(b) In the event that the Total Commitment is terminated in its
entirety in accordance with the terms of this Credit Agreement, then the
Borrower shall immediately pay in full the Term Loan, together with any
and all accrued and unpaid interest thereon.
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4.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrower shall have the right
at any time to prepay the Term Notes on or before the Maturity Date, as a whole,
or in part, upon not less than five (5) Business Days' prior written notice to
the Agent, without premium or penalty, PROVIDED that (a) each partial prepayment
shall be in the principal amount of $100,000 or an integral multiple thereof,
(b) no portion of the Term Loan bearing interest at the Eurodollar Rate may be
prepaid pursuant to this sec.4.4 except, at the Borrower's option, either on the
last day of the Interest Period relating thereto or subject to the provisions of
sec.6.9(c) of the Credit Agreement, and (c) each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective outstanding amount of each Bank's Term Note, with adjustments to the
extent practicable to equalize any prior prepayments not exactly in proportion.
Any prepayment of principal of the Term Loan shall include all interest accrued
to the date of prepayment and shall, if made after the first anniversary of the
Closing Date, be applied against the scheduled installments of principal due on
the Term Loan pursuant to sec.4.3.1 in the inverse order of maturity. No amount
repaid with respect to the Term Loan may be reborrowed.
4.5. INTEREST ON TERM LOAN.
4.5.1. INTEREST RATES. Except as otherwise provided in sec.6.10, the
Term Loan shall bear interest during each Interest Period relating to all
or any portion of the Term Loan at the following rates:
(a) to the extent that all or any portion of the Term Loan bears
interest during such Interest Period by reference to the Base Rate, the
Term Loan or such portion shall bear interest during such Interest Period
at the Base Rate; and
(b) to the extent that all or any portion of the Term Loan bears
interest during such Interest Period by reference to the Eurodollar Rate,
the Term Loan or such portion shall bear interest during such Interest
Period at the rate of two percent (2%) per annum above the Eurodollar
Rate.
The Borrower promises to pay interest on the Term Loan or any portion thereof
outstanding during each Interest Period in arrears on each Interest Payment Date
applicable to such Interest Period.
4.5.2. INTEREST RATE OPTIONS. On the initial Drawdown Date, the Term
Loan shall bear interest at the Base Rate. After the Term Loan has been
made, the provisions of sec.2.7 shall apply MUTATIS MUTANDIS with respect
to all or any portion of the Term Loan so that the Borrower may have the
same interest rate options with respect to all or any portion of the Term
Loan as it would be entitled to with respect to the Revolving Credit
Loans.
4.5.3. AMOUNTS, ETC. Any portion of the Term Loan bearing interest
at the Eurodollar Rate relating to any Interest Period shall be in the
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof
or, if the outstanding amount of the Term Loan is less than $1,000,000, an
integral multiple of $100,000. No Interest Period relating to the Term
Loan or any portion thereof bearing interest at the Eurodollar Rate shall
extend beyond the date on which a regularly scheduled
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installment payment of the principal of the Term Loan is to be made unless
a portion of the Term Loan at least equal to such installment payment has
an Interest Period ending on such date or is then bearing interest at the
Base Rate.
5. LETTERS OF CREDIT.
5.1. LETTER OF CREDIT COMMITMENTS.
5.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance
upon the agreement of the Banks set forth in sec.5.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees,
in its individual capacity, to issue, extend and renew for the account of
the Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested
from time to time by the Borrower and agreed to by the Agent; PROVIDED,
HOWEVER, that, after giving effect to such request, (a) the sum of the
aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations
shall not exceed $25,000,000 at any one time and (b) the sum of (i) the
Maximum Drawing Amount on all Letters of Credit, (ii) all Unpaid
Reimbursement Obligations, and (iii) the amount of all Revolving Credit
Loans outstanding shall not exceed the lesser of (A) the Total Commitment
and (B) the Borrowing Base MINUS the outstanding Term Loan, PROVIDED
FURTHER that in no event shall the sum of the outstanding amount of the
Term Loan PLUS the outstanding amount of Revolving Credit Loans PLUS the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceed the
Borrowing Base. Each of the "Letters of Credit" as defined in the Existing
Credit Agreement shall automatically be deemed to be a Letter of Credit
issued under this Credit Agreement for the account of the Borrower on the
Closing Date.
5.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
5.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date
which is no later than one (1) year after the issuance date for standby
Letters of Credit and one hundred fifty (150) days after the issuance date
for documentary Letters of Credit, PROVIDED, HOWEVER, in the event the
Borrower requests a Letter of Credit be issued, extended or renewed with
an expiry date which will occur after the date which is fourteen (14) days
(or, if the Letter of Credit is confirmed by a confirmer or otherwise
provides for one or more nominated persons, forty-five (45) days) prior to
the Maturity Date, the Borrower shall, by not later than (a) forty-five
(45) days prior to the Maturity Date for standby Letters of Credit and (b)
twenty-one
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(21) days prior to the Maturity Date for documentary Letters of Credit,
deliver to the Agent for the benefit of the Banks, cash in the amount of
one hundred three percent (103%) of the Maximum Drawing Amount, to be held
as cash collateral by the Agent for the Reimbursement Obligations pursuant
to the terms of the Cash Collateral Agreement (which cash collateral may
be invested in Permitted Cash Collateral Investments). Each Letter of
Credit so issued, extended or renewed shall be subject to the Uniform
Customs.
5.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. 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,
to reimburse the Agent on demand for the amount of each draft paid by the
Agent under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to sec.5.2 (such agreement for a Bank
being called herein the "Letter of Credit Participation" of such Bank).
5.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under sec.5.2 in an amount
equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to sec.5.2.
5.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in sec.5.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to such Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with
any payment made by the Agent or any Bank under, or with respect to, such
Letter of Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to 103%
of the difference between the amount of the Maximum Drawing Amount and the
Total Commitment at such time, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations in accordance with the terms of the Cash
Collateral Agreement (which cash collateral may be invested in Permitted
Cash Collateral Investments), and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters
of Credit in accordance with sec.14, an amount equal to 103% of the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the
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Banks and the Agent as cash collateral for all Reimbursement Obligations
in accordance with the terms of the Cash Collateral Agreement (which cash
collateral may be invested in Permitted Cash Collateral Investments).
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this sec.5.2 at any time from the date such amounts become
due and payable (whether as stated in this sec.5.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in sec.6.10 for overdue
principal on the Revolving Credit Loans.
5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
sec.5.2 on or before the date that such draft is paid or other payment is made
by the Agent, the Agent may at any time thereafter notify the Banks of the
amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m.
(Boston time) on the Business Day next following the receipt of such notice,
each Bank shall make available to the Agent, at its Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, TIMES (b) the amount equal to such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, TIMES (c) a
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
5.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this sec.5
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under sec.5.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit unless caused by the Agent's or such
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Bank's gross negligence or willful misconduct. The Borrower agrees that any
action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents shall, absent the
Agent's or such Bank's gross negligence or willful misconduct, be binding upon
the Borrower and shall not result in any liability on the part of the Agent or
any Bank to the Borrower.
5.5. RELIANCE BY ISSUER. To the extent not inconsistent with sec.5.4, the
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Majority Banks as it reasonably deems
appropriate or it shall first be indemnified to its reasonable satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Majority Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Banks and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
5.6. LETTER OF CREDIT FEE. The Borrower shall, quarterly in arrears on the
first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on the Maturity Date, pay a fee (in each case, a "Letter of Credit
Fee") to the Agent in an amount equal to one and one-quarter of one percent
(1-1/4%) per annum of the average daily Maximum Drawing Amount during each
calendar quarter or portion thereof. The Agent shall, in turn, remit to each
Bank its PRO RATA portion of such Letter of Credit Fee LESS, in the case of
documentary Letters of Credit, one-eighth of one percent (1/8%) of such Letter
of Credit Fee. In addition, the Borrower shall pay to the Agent, for its own
account, on the date of issuance, or any extension or renewal of any Letter of
Credit and at such other time or times as such charges are customarily made by
the Agent, its standard issuance, processing, negotiation, settlement, amendment
and administrative fees, determined in accordance with customary fees and
charges for similar facilities.
6. CERTAIN GENERAL PROVISIONS.
6.1. AMENDMENT FEE. The Borrower agrees to pay to the Agent for the
account of the Banks on the Closing Date a fee as set forth in the letter
agreement dated as of the Closing Date between the Agent and the Borrower.
6.2. FUNDS FOR PAYMENTS.
6.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head
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Office or at such other location in the Boston, Massachusetts, area that
the Agent may from time to time designate, in each case in immediately
available funds. The Borrower hereby authorizes the Agent to debit its
account with the Agent for payment of any principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the Loan Documents. The Agent
shall debit such accounts for the payment of such amounts on the date
which any of such amounts become due, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment, and shall promptly thereafter notify the Borrower of the
amount of such debit.
6.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder, under
the Notes and under any of the other Loan Documents shall be made without
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the
case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the Agent
to receive the same net amount which the Banks or the Agent would have
received on such due date had no such obligation been imposed upon the
Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such
other Loan Document.
6.3. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Revolving Credit Note
Records and the Term Note Records from time to time shall be considered correct
and binding on the Borrower absent manifest error unless within ten (10)
Business Days after the Borrower's receipt of any notice from the Agent or any
of the Banks of such outstanding amount, the Borrower shall notify the Agent or
such Bank to the contrary.
6.4. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the 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 Loan Request or Conversion Request with respect to
Eurodollar Rate
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Loans shall be automatically withdrawn and shall be deemed a request for Base
Rate Loans, (b) each Eurodollar Rate 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 Eurodollar Rate Loans shall be
suspended until the Agent, exercising reasonable due diligence determines that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
6.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks (which notice shall be in
writing if the Borrower so requests) and thereupon (a) the commitment of such
Bank to make Eurodollar Rate Loans or convert Loans of another Type to
Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's Loans (or
portions thereof) then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this sec.6.5, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Loans hereunder.
6.6. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof 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 Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Loans (other than taxes based upon or measured by
the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) 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
Agent under this Credit Agreement, the Notes or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy 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
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(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of Loans, Letters of Credit 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) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or the
Agent hereunder on account of such Bank's Commitment, any Letter of
Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest
or Reimbursement Obligation or other sum is calculated by reference
to the gross amount of any sum receivable or deemed received by such
Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, within ten (10) days following
presentation by such Bank or (as the case may be) the Agent of a certificate in
accordance with sec.6.8, from time to time and as often as the occasion therefor
may arise, pay to such Bank or the Agent such additional amounts as will be
sufficient to compensate such Bank or the Agent for such additional cost,
reduction, payment or foregone interest or Reimbursement Obligation or other
sum.
6.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's on the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrower of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrower agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital within ten (10)
days following presentation by such Bank or (as the case may be) the Agent of a
certificate in accordance with sec.6.8 hereof. Each Bank shall allocate such
cost increase among its customers in good faith and on an equitable basis.
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6.8. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to sec.sec.6.6 or 6.7 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request, notice (in the case of all or any
portion of the Term Loans pursuant to sec.4.5.2) or a Conversion Request
relating thereto in accordance with sec.2.6, sec.2.7 or sec.4.5 or (c) the
making of any payment of a Eurodollar Rate Loan or the making of any conversion
of any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Loans.
6.10. INTEREST AFTER DEFAULT.
6.10.1. OVERDUE AMOUNTS. During the continuance of an Event of
Default, overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder or
under any of the other Loan Documents shall bear interest compounded
monthly and payable on demand at a rate per annum equal to two percent
(2%) above the rate of interest otherwise applicable to such Loans
pursuant to sec.2.5 or sec.4.5.1, as applicable, until such amount shall
be paid in full (after as well as before judgment).
6.10.2. AMOUNTS NOT OVERDUE. During the continuance of an Event of
Default the principal of the Revolving Credit Loans and the Term Loan not
overdue shall, until such Event of Default has been cured or remedied or
such Event of Default has been waived by the Majority Banks pursuant to
sec.27, bear interest at a rate per annum equal to two percent (2%) above
the rate of interest otherwise applicable to such Revolving Credit Loans
pursuant to sec.2.5 and the Term Loan pursuant to sec.4.5.1.
7. COLLATERAL SECURITY AND GUARANTIES.
7.1. SECURITY OF BORROWER. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
7.2. GUARANTY AND SECURITY OF GUARANTOR. The Obligations shall also be
guaranteed pursuant to the terms of the Guaranty. The obligations of the
Guarantor under the Guaranty shall be in turn secured by a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the assets of the Guarantor, whether
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now owned or hereafter acquired, pursuant to the terms of the Security Documents
to which the Guarantor is a party.
8. REPRESENTATIONS AND WARRANTIES.
Each of the Guarantor and the Borrower represents and warrants to the
Banks and the Agent as follows:
8.1. CORPORATE AUTHORITY.
8.1.1. INCORPORATION; GOOD STANDING. Each of the Guarantor, the
Borrower and their Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, (b) has all requisite corporate power to own its property
and conduct its business as now conducted and as presently contemplated,
and (c) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary except (i) where a failure to be so qualified would not have a
materially adverse effect on the business, assets or financial condition
of the Guarantor, the Borrower or such Subsidiary and (ii) in the state of
Illinois in which jurisdiction the appropriate applications for
qualification have been filed prior to the Closing Date.
8.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which the Guarantor,
the Borrower or any of their Subsidiaries is or is to become a party and
the transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by all
necessary corporate proceedings, (c) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or
regulation to which the Guarantor, the Borrower or any of their
Subsidiaries is subject or any judgment, order, writ, injunction, license
or permit applicable to the Guarantor, the Borrower or any of their
Subsidiaries and (d) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding upon,
the Guarantor, the Borrower or any of their Subsidiaries.
8.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Guarantor, the
Borrower or any of their Subsidiaries is or is to become a party will
result in valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions hereof
and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding therefor may be brought.
8.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Guarantor, the Borrower and any of their Subsidiaries of this Credit
Agreement and the other Loan Documents to which the Guarantor, the Borrower or
any of their Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not require the
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approval or consent of, or filing with, any governmental agency or authority
other than those already obtained, and other than the filing of UCC-1 financing
statements and the Mortgages.
8.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 8.3
hereto, the Guarantor, the Borrower and their Subsidiaries own all of the assets
reflected in the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date or in accordance with the terms of this Credit
Agreement), subject to no rights of others, including any mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
8.4. FINANCIAL STATEMENTS AND PROJECTIONS.
8.4.1. FINANCIAL STATEMENTS. There has been furnished to each of the
Banks a consolidated balance sheet of the Guarantor and its Subsidiaries
as at the Balance Sheet Date, and a consolidated statement of income of
the Guarantor and its Subsidiaries for the fiscal year then ended,
certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. Such balance sheet and statement of
income have been prepared in accordance with generally accepted accounting
principles and fairly present the financial condition of the Guarantor and
its Subsidiaries as at the close of business on the date thereof and the
results of operations for the fiscal year then ended. Except as set forth
on SCHEDULE 8.4.1, there are no contingent liabilities of the Guarantor or
any of its Subsidiaries as of such date involving material amounts, known
to the officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
8.4.2. PROJECTIONS. Copies of the projections of the annual
operating budgets of the Guarantor, the Borrower and their Subsidiaries on
a consolidated basis, balance sheets, income statements and cash flow
statements for the 1998 fiscal year, have been delivered to each Bank, all
of which are attached hereto as SCHEDULE 8.4.2. To the knowledge of the
Guarantor, the Borrower or any of their Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change in
any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Guarantor, the Borrower and their Subsidiaries of the results of
operations and other information projected therein.
8.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Guarantor and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Guarantor and its Subsidiaries as at the Balance Sheet
Date, or the consolidated statement of income for the fiscal year then ended,
other than changes in the ordinary course of business that have not had any
materially adverse effect either individually or in the aggregate on the
business or financial condition of the Guarantor or any of its Subsidiaries.
Since the Balance Sheet Date, neither the Guarantor nor the Borrower has made
any Distribution.
8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Guarantor, the
Borrower and their Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names,
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licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others.
8.7. LITIGATION. Except as set forth in SCHEDULE 8.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Guarantor, the Borrower or any of their Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Guarantor, the
Borrower and their Subsidiaries or materially impair the right of the Guarantor,
the Borrower and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Guarantor and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Guarantor, the
Borrower nor any of their Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of the Guarantor, the Borrower or any of
their Subsidiaries. Except as set forth on SCHEDULE 8.8 hereto, neither the
Guarantor, the Borrower nor any of their Subsidiaries is a party to any contract
or agreement that has or is expected, in the judgment of the Guarantor's or the
Borrower's officers, to have any materially adverse effect on the business of
the Guarantor, the Borrower or any of their Subsidiaries.
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Except as set forth on
SCHEDULE 8.9 hereto, neither the Guarantor, the Borrower nor any of their
Subsidiaries is in violation of any provision of its charter documents, bylaws,
or any agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Guarantor, the Borrower
or any of their Subsidiaries.
8.10. TAX STATUS. The Guarantor, the Borrower and their Subsidiaries (a)
have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) have
set aside on their books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. Except as set forth on SCHEDULE 8.10, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no basis for any such
claim.
8.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
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8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Guarantor,
the Borrower nor any of their Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
8.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Guarantor, the Borrower or any of their
Subsidiaries or any rights relating thereto.
8.14. PERFECTION OF SECURITY INTEREST. Except for required filings set
forth on SCHEDULE 8.14 hereto (which are to be made promptly after the Closing
Date), all filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken that are
necessary or advisable, under applicable law, to establish and perfect the
Agent's first priority (except with respect to Permitted Liens which have
priority under applicable law) security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Guarantor and
Borrower are the owners of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand, except for Permitted Liens.
8.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 8.15 hereto
and except for arm's length transactions pursuant to which the Guarantor, the
Borrower or any of their Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Guarantor, the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Guarantor, the Borrower or any of their Subsidiaries is
presently a party to any transaction with the Guarantor, the Borrower or any of
their Subsidiaries (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,
director or such employee or, to the knowledge of the Guarantor or the Borrower,
any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
8.16. EMPLOYEE BENEFIT PLANS.
8.16.1. IN GENERAL. Each Employee Benefit Plan has been maintained
and operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting prohibited transactions. The
Borrower has heretofore delivered to the Agent the most recently completed
annual report, Form 5500, with all required attachments, and actuarial
statement required to be submitted under sec.103(d) of ERISA, with respect
to each Guaranteed Pension Plan.
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8.16.2. TERMINABILITY OF WELFARE PLANS. Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of
sec.3(1) or sec.3(2)(B) of ERISA, no benefits are due unless the event
giving rise to the benefit entitlement occurs prior to plan termination
(except as required by Title I, Part 6 of ERISA). The Borrower or an ERISA
Affiliate, as appropriate, may terminate each such Plan at any time (or at
any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower or such ERISA Affiliate
without liability to any Person.
8.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of sec.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of
which have been paid) has been incurred by the Borrower or any ERISA
Affiliate with respect to any Guaranteed Pension Plan and there has not
been any ERISA Reportable Event, or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of sec.4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
8.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under sec.4201 of ERISA or as a
result of a sale of assets described in sec.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
sec.4241 or sec.4245 of ERISA or that any Multiemployer Plan intends to
terminate or has been terminated under sec.4041A of ERISA.
8.17. REGULATIONS U AND X. The proceeds of the Loans shall be used solely
for working capital and general corporate purposes, including, without
limitation, capital expenditures for new Store openings. The Borrower will
obtain Letters of Credit solely for working capital and general corporate
purposes. No portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
8.18. ENVIRONMENTAL COMPLIANCE. Each of the Guarantor, the Borrower and
their Subsidiaries has taken all necessary steps to investigate the past and
present condition and usage of the Real Estate owned by the Borrower, the
Guarantor or such Subsidiary (the "Owned Real Estate"), as the case may be, and
the operations conducted thereon and have
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taken all reasonable steps of a lessee of real property (which steps may include
reliance upon the representations and warranties of lessors of such real
property) to investigate the past and present condition and usage of the Real
Estate so leased (the "Leased Real Estate") and the operations conducted
thereon, and, based upon such diligent or, as the case may be, reasonable
investigation, has determined that, except as set forth on SCHEDULE 8.18:
(a) none of the Guarantor, the Borrower, their Subsidiaries or any
operator of the Owned Real Estate or any operations thereon, and, to the
actual knowledge of the Guarantor, the Borrower or their Subsidiaries, any
operator of the Leased Real Estate or any operations thereon, are in
violation, or alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control
Act, or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter "Environmental
Laws"), which violation would have a material adverse effect on the
environment or the business, assets or financial condition of the
Guarantor, the Borrower or any of their Subsidiaries;
(b) neither the Guarantor, the Borrower nor any of their
Subsidiaries has received notice from any third party including, without
limitation: any federal, state or local governmental authority, (i) that
any one of them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA
with respect to a site listed on the National Priorities List, 40 C.F.R.
Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined by 42
U.S.C. sec.6903(5), any hazardous substances as defined by 42 U.S.C.
sec.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
sec.9601(33) and any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed
of has been found at any site at which a federal, state or local agency or
other third party has conducted or has ordered that the Guarantor, the
Borrower or any of their Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances;
(c) (i) no portion of the Owned Real Estate or, to the Guarantor's,
the Borrower's or such Subsidiary's actual knowledge, the Leased Real
Estate, has been used for the handling, processing, storage or disposal of
Hazardous Substances except in accordance with applicable Environmental
Laws; and no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Owned Real Estate
or, to the Guarantor's, the Borrower's or such Subsidiary's actual
knowledge, the Leased Real Estate; (ii) in the course of any activities
conducted by the Guarantor, the Borrower, their Subsidiaries or operators
of its
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properties, no Hazardous Substances have been generated or are being used
on the Owned Real Estate or, to the Guarantor's, the Borrower's or such
Subsidiary's actual knowledge, the Leased Real Estate except in accordance
with applicable Environmental Laws; (iii) there have been no releases
(i.e. any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon, into or
from the properties of the Guarantor, the Borrower or their Subsidiaries,
which releases would have a material adverse effect on the value of any of
the Owned Real Estate or adjacent properties or, to the Guarantor's, the
Borrower's or such Subsidiary's actual knowledge, with respect to the
Leased Real Estate or the environment; (iv) to the best of the Guarantor's
and Borrower's knowledge, with respect to the Owned Real Estate or, to the
Guarantor's, the Borrower's or such Subsidiary's actual knowledge, the
Leased Real Estate, there have been no releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, the Real
Estate; and (v) in addition, any Hazardous Substances that have been
generated on any of the Owned Real Estate or, to the Guarantor's, the
Borrower's or such Subsidiary's actual knowledge, the Leased Real Estate,
have been transported offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment or
disposal facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and are,
to the best of the Guarantor's and the Borrower's knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) none of the Guarantor, the Borrower and their Subsidiaries, any
Mortgaged Property or any of the other Owned Real Estate or, to the
Guarantor's, the Borrower's or such Subsidiary's actual knowledge, the
Leased Real Estate, is subject to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to
any governmental agency or the recording or delivery to other Persons of
an environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition
to the recording of any Mortgage or to the effectiveness of any other
transactions contemplated hereby.
8.19. SUBSIDIARIES, ETC. The Borrower is a wholly-owned Subsidiary of the
Guarantor. Except for the Borrower, the Guarantor has no Subsidiaries and the
Borrower has no Subsidiaries. Except as set forth on SCHEDULE 8.19 hereto,
neither the Guarantor, the Borrower nor any of their Subsidiaries is engaged in
any joint venture or partnership with any other Person.
8.20. BANK ACCOUNTS. SCHEDULE 8.20 sets forth the account numbers and
location of all bank accounts of the Guarantor, the Borrower or any of their
Subsidiaries.
8.21. FISCAL QUARTERS. Attached hereto as SCHEDULE 8.21 is a list of each
fiscal quarter end of each of the Guarantor and the Borrower from the Closing
Date to the Maturity Date.
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8.22. CHIEF EXECUTIVE OFFICE; INVENTORY LOCATIONS. Each of the Guarantor's
and the Borrower's chief executive office is at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, at which location its corporate books and records are kept. In
addition, SCHEDULE 8.22 hereto sets forth the additional locations where books
and records are kept. All Eligible Inventory is located solely at Permitted
Inventory Locations.
8.23. INSURANCE. The Guarantor, the Borrower and each of their
Subsidiaries maintains with financially sound and reputable insurers insurance
with respect to its properties and business against such casualties and
contingencies as are in accordance with sound business practices.
8.24. FULL DISCLOSURE. The financial statements referred to in sec.8.4.1,
the warranties and representations and factual disclosures made by the Guarantor
and the Borrower in this Credit Agreement and the other Loan Documents, and all
documents or statements filed with the Securities and Exchange Commission since
the Balance Sheet Date set forth on SCHEDULE 8.24 hereto do not, taken as a
whole, contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein and herein not materially
misleading.
9. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the Agent has
any obligation to issue, extend or renew any Letters of Credit:
9.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees and all other
amounts provided for in this Credit Agreement and the other Loan Documents to
which the Guarantor, the Borrower or any of their Subsidiaries is a party, all
in accordance with the terms of this Credit Agreement and such other Loan
Documents.
9.2. MAINTENANCE OF OFFICE. Each of the Guarantor and the Borrower will
maintain its chief executive office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, or at such other place in the United States of America as the
Guarantor or the Borrower, as the case may be, shall designate upon written
notice to the Agent, where notices, presentations and demands to or upon the
Guarantor or the Borrower in respect of the Loan Documents to which the
Guarantor or the Borrower is a party may be given or made.
9.3. RECORDS AND ACCOUNTS. Each of the Guarantor and the Borrower will (a)
keep, and cause each of its Subsidiaries to keep, true and accurate records and
books of account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles and (b) maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves.
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9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Guarantor and
the Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Guarantor and the
Borrower, the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such year, and the related consolidated
statement of income and consolidated statement of cash flow for such year,
setting forth in comparative form the figures for the previous fiscal
year, and all such consolidated statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
certified without qualification by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or by other
independent certified public accountants reasonably satisfactory to the
Agent, together with a written statement from such accountants to the
effect that they have read a copy of this Credit Agreement, and that, in
making the examination necessary to said certification, they have obtained
no knowledge of any Default or Event of Default, or, if such accountants
shall have obtained knowledge of any then existing Default or Event of
Default they shall disclose in such statement any such Default or Event of
Default; PROVIDED that such accountants shall not be liable to the Banks
for failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters of the Guarantor and the Borrower in any fiscal year of the
Guarantor and the Borrower, copies of the unaudited consolidated balance
sheet of the Guarantor and its Subsidiaries as at the end of such quarter,
and the related consolidated statement of income and consolidated
statement of cash flow for the portion of the Guarantor's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification by
the principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the
financial position of the Guarantor and its Subsidiaries on the date
thereof (subject to year-end adjustments), which statements shall set
forth in comparative form the figures from the projections for such
quarter most recently delivered to the Banks;
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each fiscal month, in each fiscal year of the Borrower,
unaudited monthly consolidated financial statements of the Guarantor and
its Subsidiaries for such fiscal month, as well as a report of sales at
each Store for such fiscal month, compared to sales at such Store for the
same fiscal month of the previous fiscal year prepared in accordance with
generally accepted accounting principles, together with a certification by
the principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the
financial condition of the Guarantor and its Subsidiaries on the date
thereof (subject to year-end adjustments), which statements shall set
forth in comparative form the figures from the projections, if any, for
such fiscal month most recently delivered to the Banks;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of EXHIBIT E (a
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"Compliance Certificate") hereto and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in sec.11
and (if applicable) reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date;
(e) within two (2) Business Days of the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of the Borrower or the
Guarantor;
(f) within fifteen (15) days after the end of each fiscal month or
at such other time as the Agent may reasonably request after reasonable
notice, a Borrowing Base Report setting forth the Borrowing Base as at end
of such fiscal month or other date so requested by the Agent; PROVIDED
that during the fiscal months of November through January, inclusive, the
Borrower will deliver to the Banks within five (5) days after the end of
each calendar week, a weekly update of the most recently delivered
Borrowing Base Report with respect to Eligible Accounts Receivable; and
PROVIDED FURTHER that in any fiscal month the Borrower may, at its option,
deliver a Borrowing Base Report with respect to both Eligible Inventory
and Eligible Accounts Receivable on a weekly basis so long as during such
fiscal month in which the Borrower has delivered a weekly Borrowing Base
Report, the Borrower continues to deliver a weekly Borrowing Base Report
for the remainder of such fiscal month;
(g) from time to time upon the reasonable request of the Agent,
projections of the Guarantor, the Borrower and their Subsidiaries updating
those projections delivered to the Banks and referred to in sec.9.4.2 or,
if applicable, updating any later such projections delivered in response
to a request pursuant to this sec.9.4(g);
(h) by not later than the last Business Day of the Borrower's fiscal
year, the Borrower's business plan for the next fiscal year;
(i) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Guarantor and the
Borrower, the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such year, and the related consolidated
statement of income and consolidated statement of cash flow for such year,
setting forth in comparative form the figures from the projections for
such fiscal year most recently delivered to the Banks;
(j) prior to the opening by the Borrower of any new Store or
warehouse facility at which Eligible Inventory is to be located, a
supplement to SCHEDULE 2 hereto, listing any additions or deletions to the
list of Stores and warehouse facilities of the Borrower located in the
United States, which supplement, together with SCHEDULE 2 hereto and any
prior supplements, shall be deemed to constitute SCHEDULE 2 for all
purposes of this Credit Agreement; and
(k) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Bank may
reasonably request.
9.5. NOTICES.
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9.5.1. DEFAULTS. The Guarantor and the Borrower will promptly notify
the Agent in writing of the occurrence of any Default (of which they have
actual knowledge) or Event of Default. If any Person shall give any notice
or take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Credit Agreement or any other
note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Guarantor and the Borrower or any of their
Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Guarantor and the Borrower shall give prompt
written notice thereof to the Agent, describing the notice or action and
the nature of the claimed default.
9.5.2. ENVIRONMENTAL EVENTS. The Guarantor and the Borrower will
promptly give notice to the Agent (a) of any violation of any
Environmental Law that the Guarantor, the Borrower or any of their
Subsidiaries reports in writing or is reportable by such Person in writing
(or for which any written report supplemental to any oral report is made)
to any federal, state or local environmental agency and (b) upon becoming
aware thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental liability,
of any federal, state or local environmental agency or board, that has the
potential to materially affect the assets, liabilities, financial
conditions or operations of the Guarantor, the Borrower or any of their
Subsidiaries, or the Agent's mortgages, deeds of trust or security
interests pursuant to the Security Documents.
9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Guarantor and
the Borrower will, promptly upon becoming aware thereof, notify the Agent
in writing of any setoff, claims (including, with respect to the Real
Estate, environmental claims), withholdings or other defenses in an amount
in excess of $100,000 to which any of the Collateral, or the Agent's
rights with respect to the Collateral, are subject.
9.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Guarantor and the
Borrower will, and will cause each of their Subsidiaries to, give notice
to the Agent in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Guarantor, the Borrower or any of their
Subsidiaries or to which the Guarantor, the Borrower or any of their
Subsidiaries is or becomes a party involving an uninsured claim against
the Guarantor, the Borrower or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on the
Guarantor, the Borrower or any of their Subsidiaries and stating the
nature and status of such litigation or proceedings. The Guarantor and the
Borrower will, and will cause each of their Subsidiaries to, give notice
to the Agent, in writing, in form and detail satisfactory to the Agent,
within ten (10) days of any judgment not covered by insurance, final or
otherwise, against the Guarantor and the Borrower or any of their
Subsidiaries in an amount in excess of $1,000,000.
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of the Guarantor
and the Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights and franchises
and those of its Subsidiaries, except as otherwise permitted by sec.10.5.1
hereof, and will not, and will not cause or permit any of its
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Subsidiaries to, convert to a limited liability company. Each (a) will cause all
of its properties and those of its Subsidiaries used or useful in the conduct of
its business or the business of its Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Guarantor or the Borrower may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times, and (c) will, and will cause each of its Subsidiaries to, continue to
engage primarily in the businesses now conducted by them and in related
businesses; PROVIDED that nothing in this sec.9.6 shall prevent the Guarantor or
the Borrower from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries (other than discontinuing the
operations of the Borrower) if such discontinuance is, in the judgment of the
Guarantor or the Borrower, as the case may be, desirable in the conduct of its
or their business and that do not in the aggregate materially adversely affect
the business of the Guarantor, the Borrower and their Subsidiaries on a
consolidated basis.
9.7. INSURANCE.
9.7.1. GENERAL COVERAGE. Each of the Guarantor and the Borrower
will, and will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing
such terms, in such forms and for such periods as may be reasonable and
prudent and in accordance with the terms of the Security Agreements. The
Borrower will maintain insurance on the Mortgaged Properties in accordance
with the terms of the Mortgages. The Agent shall be named as loss payee
and additional insured on all such insurance policies.
9.7.2. BUSINESS INTERRUPTION INSURANCE. Without limiting the
generality of the foregoing, each of the Guarantor and the Borrower will,
and will cause each of their Subsidiaries to, maintain, with financially
sound and reputable insurers business interruption insurance with respect
to their business and each Store, including, without limitation, any Store
located in Boston, Massachusetts, against such casualties and
contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and
in amounts containing such terms, in such forms and for such periods as
may be reasonable and prudent.
9.8. TAXES. Each of the Guarantor and the Borrower will, and will cause
each of its Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Guarantor, the Borrower or such Subsidiary shall have set aside on
its books adequate reserves with respect thereto; and
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PROVIDED FURTHER that the Guarantor, the Borrower and each of their Subsidiaries
will pay all such taxes, assessments, charges, levies or claims forthwith upon
the commencement of proceedings to foreclose any lien that may have attached as
security therefor.
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
9.9.1. GENERAL. No more frequently than thrice each calendar year,
or more frequently as reasonably determined by the Agent if an Event of
Default shall have occurred and be continuing, each of the Guarantor and
the Borrower shall permit the Banks, through the Agent or any of the
Banks' other designated representatives, if accompanied by the Agent, to
visit and inspect any of the properties of the Guarantor, the Borrower or
any of their Subsidiaries, to examine the books of account of the
Guarantor, the Borrower and their Subsidiaries (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances, Collateral
and accounts of the Guarantor, the Borrower and their Subsidiaries with,
and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent may reasonably request, and,
prior to the occurrence of a Default or Event of Default, upon reasonable
advance notice to the Guarantor, the Borrower or such Subsidiary. All
reasonable expenses incurred by the Agent with respect to any such
inspection shall be promptly reimbursed by the Borrower; PROVIDED, HOWEVER
for examinations done prior to the occurrence of any Event of Default, the
Borrower shall be responsible for expenses for only two examinations per
calendar year and such expenses for which the Borrower shall be
responsible shall not exceed $5,000 for each such examination.
9.9.2. APPRAISALS. If an Event of Default shall have occurred and be
continuing, upon the request of the Agent, the Guarantors and the Borrower
will obtain and deliver to the Agent appraisal reports in form and
substance and from appraisers satisfactory to the Agent, stating (a) the
then current fair market, orderly liquidation and forced liquidation
values of all or any portion of the inventory, equipment, real estate or
other assets owned by the Guarantor, the Borrower or any of their
Subsidiaries and (b) the then current business value of each of the
Guarantor, the Borrower and their Subsidiaries. All such appraisals shall
be conducted and made at the expense of the Borrower.
9.9.3. ENVIRONMENTAL ASSESSMENTS. If an Event of Default shall have
occurred and be continuing, the Agent may, from time to time, in its
discretion for the purpose of assessing and ensuring the value of any
Mortgaged Property, obtain one or more environmental assessments or audits
of such Mortgaged Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the Agent to
evaluate or confirm (a) whether any Hazardous Materials are present in the
soil or water at such Mortgaged Property and (b) whether the use and
operation of such Mortgaged Property complies with all Environmental Laws;
PROVIDED, HOWEVER, the Agent shall only be permitted to obtain such
assessments for Leased Real Estate to the extent the conduct of such
assessments does not violate the terms of any lease agreement.
Environmental assessments may include without limitation detailed visual
inspections of such Mortgaged Property including any and all storage
areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and the taking
of
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soil samples, surface water samples and ground water samples, as well as
such other investigations or analyses as the Agent deems appropriate. All
such environmental assessments shall be conducted and made at the expense
of the Borrower.
9.9.4. COMMUNICATIONS WITH ACCOUNTANTS. Each of the Guarantor and
the Borrower authorizes the Agent, after consultation with the Guarantor
and the Borrower, and, if accompanied by the Agent, the Banks to
communicate directly with the Guarantor's and the Borrower's independent
certified public accountants and authorizes such accountants to disclose
to the Agent and the Banks any and all financial statements and other
supporting financial documents and schedules including copies of any
management letter with respect to the business, financial condition and
other affairs of the Guarantor, the Borrower or any of their Subsidiaries.
At the request of the Agent, the Guarantor or the Borrower, as the case
may be, shall deliver a letter addressed to such accountants instructing
them to comply with the provisions of this sec.9.9.4.
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of the
Guarantor and the Borrower will, and will cause each of its Subsidiaries to,
comply with (a) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, within five (5) days following the
Guarantor's, the Borrower's or such Subsidiary's becoming aware thereof, except
where the failure to do so would not have a materially adverse effect on the
financial condition, properties or business of the Guarantor, the Borrower or
any of their Subsidiaries, (b) the provisions of its charter documents and
by-laws, (c) all agreements and instruments by which it or any of its properties
may be bound and (d) all applicable final and non-appealable decrees, orders,
and judgments. If any authorization, consent, approval, permit or license from
any officer, agency or instrumentality of any government shall become necessary
or required in order that the Guarantor, the Borrower or any of their
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which the Guarantor, the Borrower or such Subsidiary is a
party, the Guarantor or the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Guarantor, the Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the Agent
and the Banks with evidence thereof.
9.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon filing
the same with the Department of Labor or Internal Revenue Service upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under sec.103(d) of ERISA and Annual Report, Form 5500,
with all required attachments, in respect of each Guaranteed Pension Plan and
(b) promptly upon receipt or dispatch, furnish to the Agent any notice, report
or demand sent or received in respect of a Guaranteed Pension Plan under
secs. 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under secs. 4041A, 4202, 4219, 4242, or 4245 of
ERISA.
9.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Revolving
Credit Loans solely for working capital and general corporate purposes,
including, without limitation, for capital expenditures for new Store openings.
The Borrower will obtain Letters of Credit solely for working capital and
general corporate purposes.
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9.13. ADDITIONAL MORTGAGED PROPERTY. If, after the Closing Date, the
Guarantor, the Borrower or any of their Subsidiaries acquires or leases for a
term in excess of five (5) years real estate used as a manufacturing or
warehouse facility or Store, the Guarantor or the Borrower, as the case may be,
shall, or shall cause such Subsidiary to, forthwith deliver to the Agent a fully
executed mortgage or deed of trust over such real estate (except to the extent
such mortgage would violate the terms of any lease agreement between the
Guarantor, the Borrower or any of their Subsidiaries as the lessee and an
independent third party as the lessor as to any Leased Real Estate), in form and
substance satisfactory to the Agent (which form shall be in substantially the
same form as the existing Mortgages), together with title insurance policies for
Owned Real Estate, surveys for Owned Real Estate, evidences of insurances with
the Agent named as loss payee and additional insured, legal opinions and other
documents and certificates with respect to such real estate as required by the
Agent. Each of the Guarantor and the Borrower further agrees that, following the
taking of such actions with respect to such real estate, the Agent shall have
for the benefit of the Banks and the Agent a valid and enforceable first
priority mortgage or deed of trust over such real estate, free and clear of all
defects and encumbrances except for Permitted Liens.
9.14. BANK ACCOUNTS. Each of the Guarantor and the Borrower will, and will
cause each of its Subsidiaries to, together with the employees, agents and other
Persons acting on behalf of the Guarantor and the Borrower or such Subsidiary,
receive and hold in trust for the Agent and the Banks all payments constituting
proceeds of the Collateral which come into their possession or under their
control and, immediately upon receipt thereof, deposit such payments in the form
received, with any appropriate endorsements, into any Agency Account or the
Blocked Account and will otherwise comply with the requirements of sec.3.2.2
hereof.
9.15. AGENCY ACCOUNT AGREEMENTS; CREDIT CARD PROVIDERS. As soon as
practicable, but in any event not later than forty-five (45) days after the
Closing Date, the Borrower shall use its best efforts to have delivered to the
Agent those Agency Account Agreements from each Agency Account Institution set
forth on SCHEDULE 9.15(a) hereto concerning the Agent's interest for the benefit
of the Banks and the Agent in such accounts. The Borrower shall use its best
efforts to enter into Agency Account Agreements with each bank at which it
establishes a bank account after the Closing Date pursuant to sec.10.9. As soon
as practicable, but in any event not later than forty-five (45) days after the
Closing Date, the Borrower shall use its best efforts to have delivered to the
Agent copies of the notices required pursuant to sec.3.2.2 hereof to be made to
each of the Credit Card Providers listed on SCHEDULE 9.15(b) hereto, executed
and delivered by each Credit Card Provider.
9.16. INVENTORY RESTRICTIONS. The Borrower shall cause all Eligible
Inventory to be located at all times solely at Permitted Inventory Locations,
and to be sold or otherwise disposed of in the ordinary course of such
Borrower's business, consistent with past practices, in connection with the
closing of any Store or as otherwise permitted in sec.10.5.2. Prior to the
opening by the Borrower of any new Store or warehouse facility at which Eligible
Inventory is to be located, the Borrower shall take all actions necessary or
advisable as requested by the Agent under applicable law, to establish and
perfect the Agent's security interest in the Collateral located or to be located
at such Store or warehouse facility.
9.17. LANDLORD WAIVERS. The Borrower will use its reasonable best efforts,
including making written requests and follow-up telephone calls, to obtain
Landlord Waivers from the
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applicable landlord for each lease by the Borrower as lessee of Real Estate at
which Eligible Inventory is held and as to which the Agent has not received
evidence, in form and substance satisfactory to the Agent that based upon then
existing law (as determined by the Agent in the exercise of its reasonable
discretion and on the advice of counsel), the landlord of such property would
not have a lien on inventory superior to the security interest granted under the
Security Documents, securing rent obligations more than thirty (30) days past
due or securing future rent obligations accruing after the Closing Date. The
Borrower will use its best efforts in negotiating any new lease or renewal or
extension entered into after the Closing Date to obtain Landlord Waivers from
the applicable landlord.
9.18. FURTHER ASSURANCES. Each of the Guarantor and the Borrower will, and
will cause each of its Subsidiaries to, cooperate with the Banks and the Agent
and execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the Agent has
any obligations to issue, extend or renew any Letters of Credit:
10.1. RESTRICTIONS ON INDEBTEDNESS. The Guarantor and the Borrower will
not, and will not permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents or in respect of interest rate protection arrangements;
(b) current liabilities of the Guarantor, the Borrower or such
Subsidiary incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except
for credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges (including any taxes, assessments, governmental charges or levies
arising or resulting from the audits being conducted as of the Closing
Date by state revenue authorities and described on SCHEDULE 10.1 hereto)
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in
accordance with the provisions of sec.9.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Guarantor,
the Borrower or such Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and
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in respect of which a stay of execution shall have been obtained pending
such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(f) obligations under Capitalized Leases not exceeding, in the
aggregate, $10,000,000 MINUS the amount of obligations under Capitalized
Leases set forth on SCHEDULE 10.1 hereto at any time outstanding;
(g) Indebtedness incurred in connection with the acquisition after
the date hereof of any real or personal property by the Guarantor, the
Borrower or such Subsidiary, PROVIDED that the aggregate principal amount
of such Indebtedness of the Guarantor, the Borrower and their Subsidiaries
shall not exceed the aggregate amount of $4,000,000 at any one time;
(h) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 10.1 hereto, including, but not limited to
obligations under Capitalized Leases listed and described thereon;
(i) Indebtedness, in an aggregate outstanding amount not to exceed
$1,000,000 at any time, to any federal or state chartered bank which is an
Agency Account Institution (other than any of the Banks) in respect of
overdrafts on demand deposit accounts maintained with such bank;
(j) Indebtedness in respect of reserves established on the books and
records of the Guarantor and the Borrower in accordance with generally
accepted accounting principles with respect to unresolved litigation;
(k) Indebtedness consisting of guaranties by the Guarantor or the
Borrower of obligations or liabilities of employees of either of the
Guarantor or the Borrower, to the extent that payment under such
guaranties is permitted by sec.10.3(f) hereof;
(l) Indebtedness of the Borrower to the Guarantor, or the Guarantor
to the Borrower;
(m) Indebtedness in respect of the Borrower's obligations to fund
the Supplemental Executive Retirement Plan not to exceed $3,000,000 in the
aggregate on any day prior to the payment in full of all the Obligations;
(n) Indebtedness (including guaranties of the Borrower) in respect
of the Monogram Agreement; and
(o) Indebtedness of the Borrower or the Guarantor (including
guaranties by the Borrower or the Guarantor) in respect of the obligations
of any Person, the business of which Person is of strategic importance in
the business plan of the Borrower previously delivered to the Agent and
the Banks, so long as the maximum contingent or actual liability of the
Borrower and the Guarantor in respect of all such
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Indebtedness, together with the Investments described in sec.10.3(h), does
not exceed $1,000,000 in the aggregate at any one time.
10.2. RESTRICTIONS ON LIENS. Neither the Guarantor nor the Borrower will,
and neither will permit any of its Subsidiaries to, (i) create or incur or
suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any of
its property or assets of any character whether now owned or hereafter acquired,
or upon the income or profits therefrom; (ii) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (iii) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (iv)
suffer to exist for a period of more than sixty (60) days after the same shall
have been due any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or (v) sell, assign, pledge or
otherwise transfer any accounts, contract rights, general intangibles, chattel
paper or instruments, with or without recourse; PROVIDED that the Guarantor, the
Borrower and any Subsidiary of the Guarantor or the Borrower may create or incur
or suffer to be created or incurred or to exist:
(a) liens in favor of the Guarantor or the Borrower on all or part
of the assets of Subsidiaries of the Guarantor or the Borrower securing
Indebtedness owing by Subsidiaries of the Guarantor or the Borrower to the
Guarantor or the Borrower;
(b) liens to secure taxes, assessments and other government charges
in respect of obligations not overdue or liens on properties to secure
claims for labor, material or supplies in respect of obligations not
overdue or otherwise discharged or bonded over within sixty (60) days
following the imposition of such liens;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by sec.10.1(d);
(e) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue or
otherwise discharged or bonded over within sixty (60) days following the
imposition of such liens;
(f) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Guarantor or the Borrower or a Subsidiary
of the Guarantor or the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Guarantor or the Borrower
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Guarantor, the Borrower and their
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Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Guarantor or the Borrower
individually or of the Guarantor, the Borrower and their Subsidiaries on a
consolidated basis;
(g) liens existing on the date hereof and listed on SCHEDULE 10.2
hereto;
(h) purchase money security interests in or purchase money mortgages
on real or personal property acquired after the date hereof to secure
purchase money Indebtedness of the type and amount permitted by
sec.10.1(g), incurred in connection with the acquisition of such property,
which security interests or mortgages cover only the real or personal
property so acquired;
(i) liens and encumbrances on each Mortgaged Property as and to the
extent permitted by the Mortgage applicable thereto;
(j) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents;
(k) liens (other than judgments and awards) created by or resulting
from any litigation or legal proceeding which is currently being contested
in good faith by appropriate proceedings and with respect to which
adequate reserves (in accordance with generally accepted accounting
principles) have been set aside for the payment thereof on the books and
records of the Guarantor and the Borrower, unless proceedings to foreclose
such liens have been commenced and have not been withdrawn or bonded;
(l) security deposits and liens to secure obligations owed to
landlords or lessors under leases or other rental agreements made in the
ordinary course of business and confined to the premises or property
rented;
(m) security interests in documents presented, or in the goods to
which such documents relate, in connection with a Letter of Credit
permitted by sec.10.1(a);
(n) liens created by Capitalized Leases up to the amount permitted
by sec.10.1(f);
(o) liens in favor of Monogram Credit Card Bank of Georgia created
by the Monogram Agreement as an effect on the Closing Date; and.
(p) liens arising from the consignment of goods (where the Borrower
is the consignee) consigned to the Borrower in the ordinary course of
business, consistent with past practices, PROVIDED the net book value of
such consigned goods does not exceed $8,000,000 at any one time.
10.3. RESTRICTIONS ON INVESTMENTS. Neither the Guarantor nor the Borrower
will, and neither will permit any of its Subsidiaries to, make or permit to
exist or to remain outstanding any Investment except Investments in:
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(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by
the Borrower or the Guarantor, so long as at the time of the making of
such Investment, there are no Revolving Credit Loans outstanding except
for Eurodollar Rate Loans that are cash collateralized in accordance with
the terms of the Cash Collateral Agreement (which cash collateral may be
invested in Permitted Cash Collateral Investments);
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of the Banks that mature within thirty (30) days from
the date of purchase by the Guarantor, the Borrower or such Subsidiary, so
long as at the time of the making of such Investment, there are no
Revolving Credit Loans outstanding except for Eurodollar Rate Loans that
are cash collateralized in accordance with the terms of the Cash
Collateral Agreement (which cash collateral may be invested in Permitted
Cash Collateral Investments);
(c) securities commonly known as "commercial paper" issued by the
Banks or a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have
been rated and the ratings for which are not less than "P 1" if rated by
▇▇▇▇▇'▇ Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's, so long as at the time of the making of such
Investment, there are no Revolving Credit Loans outstanding except for
Eurodollar Rate Loans that are cash collateralized in accordance with the
terms of the Cash Collateral Agreement (which cash collateral may be
invested in Permitted Cash Collateral Investments);
(d) Investments existing on the date hereof and listed on SCHEDULE
10.3 hereto;
(e) Investments consisting of the Guaranty or Investments by the
Guarantor or the Borrower in Subsidiaries of the Guarantor or the Borrower
or Investments by the Guarantor or the Borrower in each other existing on
the Closing Date;
(f) Investments consisting of loans and advances to employees or
guarantees of such loans and advances for moving, entertainment, travel
and other similar expenses in the ordinary course of business not to
exceed $500,000 in the aggregate at any time outstanding;
(g) Investments by the Borrower in a demand deposit located at an
Agency Account Institution, provided that the amount of such Investments
does not exceed, in the aggregate, that amount set forth opposite such
Agency Account Institution's name on SCHEDULE 3.2.2(a); and
(h) other Investments of strategic importance to the business plan
of the Borrower previously delivered to the Agent and the Banks, the
amount of which, when combined with all outstanding obligations permitted
by sec.10.1(o), shall not exceed $1,000,000 in the aggregate at any one
time;
PROVIDED, HOWEVER, that, with the exception of loans and advances referred to in
sec.10.3(d) - (h), (a) such Investments will be considered Investments permitted
by this sec.10.3 only if such
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Investments are made through one of the Banks, and all actions have been taken
to the satisfaction of the Agent to provide to the Agent, for the benefit of the
Banks and the Agent, a first priority perfected security interest in all of such
Investments free of all encumbrances other than Permitted Liens, and (b) such
Investments are subject to the terms and conditions of the Cash Collateral
Agreement.
10.4. DISTRIBUTIONS. Neither the Guarantor nor the Borrower will make any
Distributions.
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. Neither the Guarantor nor the
Borrower will, and neither will permit any of its Subsidiaries to, become
a party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in
the ordinary course of business consistent with past practices) or open
any new Stores except (a) the merger or consolidation of one or more of
the Subsidiaries of the Borrower with and into the Borrower, (b) the
merger or consolidation of two or more Subsidiaries of the Borrower, (c)
the merger of the Borrower with the Guarantor, (d) the Guarantor and/or
the Borrower shall be permitted to enter into an agreement to effect a
merger so long as (i) the Guarantor and/or the Borrower, as the case may
be, provide the Banks with written notice promptly after entering into
such merger agreement, which notice shall set forth the terms of such
agreement in reasonable detail; (ii) such merger agreement provides for
the indefeasible repayment in full, in cash, of all of the Obligations and
a termination of the Total Commitment immediately upon the consummation of
the contemplated merger; and (iii) the Guarantor or the Borrower, as the
case may be, shall incur no liability or expense under the terms of the
merger agreement, other than reasonable expenses for professional fees
related thereto or (e) subject to the other requirements of this Credit
Agreement, the acquisition or opening of new Stores by the Borrower
PROVIDED that (i) the Borrower acquires or opens no more than six new
Stores per fiscal year and (ii) in the case of a stock acquisition, the
acquired Person is immediately merged with and into the Borrower with the
Borrower being the surviving entity.
10.5.2. DISPOSITION OF ASSETS. Subject at all times to the
requirements of sec.3.2.2, the Borrower and the Guarantor will not, and
will not permit any of its Subsidiaries to, become a party to or agree to
or effect any disposition of assets, other than (a) the disposition of
assets in the ordinary course of business, consistent with past practices,
(b) the sale or other disposition of furnishings, fixtures and equipment
which have become worn out, obsolete or no longer used or useful in the
ordinary course of business, (c) the disposition of assets of any Store,
including but not limited to leasehold rights , fixtures and inventory, in
connection with the closing of such Store; (d) any sale or other
disposition described on SCHEDULE 10.5.2 hereof; (e) the licensing in the
ordinary course of business of intangible assets, including trade names,
trademarks, service marks and copyrights, of the Borrower, provided that
such licenses do not individually or in the aggregate materially impair
the usefulness and value of any of such intangible asset(s) used or to be
used in the business or operations of the Borrower as now conducted or as
proposed to be conducted; and (f)
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the disposition of assets constituting inventory in connection with the
discontinuation or partial discontinuation of a product line, provided
such inventory is disposed of in the ordinary course of the Borrower's
business operations. In the event of a disposition of inventory or other
assets other than in the ordinary course of business, consistent with past
practices, which disposition is permitted by this sec.10.5.2, the Agent
shall release its security interest and liens on, as the case may be, such
permitted disposed assets upon receipt and use by the Agent of the Net
Proceeds from such disposition to prepay the Loans in accordance with the
provisions of sec.3.2.2.
10.6. SALE AND LEASEBACK. Neither the Guarantor nor the Borrower will, and
will not permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby the Guarantor, the Borrower or any Subsidiary of the
Guarantor or the Borrower shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that the
Guarantor or the Borrower or any Subsidiary of the Guarantor or the Borrower
intends to use for substantially the same purpose as the property being sold or
transferred.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither the Guarantor nor the
Borrower will, and neither will permit any of its Subsidiaries to, in any manner
that would violate any Environmental Law or bring any of the Real Estate in
violation of any Environmental Law, which violation would have a material
adverse effect on the business, assets or financial condition of the Guarantor,
the Borrower or any of their Subsidiaries after taking into consideration any
applicable business interruption insurance, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real Estate in any manner so
as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into the Real
Estate or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate.
10.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA Affiliate
will:
(a) engage in any "prohibited transaction" within the meaning of
sec.406 of ERISA or sec.4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in sec.302 of ERISA, whether
or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to sec.302(f) or sec.4068 of
ERISA; or
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(d) permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of sec.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
10.9. BANK ACCOUNTS. Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, (a) establish any bank accounts
other than those listed on SCHEDULE 8.20 without providing prior written notice
thereof to the Agent and complying with sec.9.15 hereof as it relates to such
bank account, (b) violate directly or indirectly any Agency Account Agreement or
Blocked Account Agreement in favor of the Agent for the benefit of the Banks and
the Agent with respect to such account, or (c) deposit into any of the payroll
accounts listed on SCHEDULE 8.20 any amounts in excess of amounts necessary to
pay current payroll obligations from such accounts.
10.10. AMENDMENTS TO MONOGRAM AGREEMENT. The Borrower shall not amend the
Monogram Agreement unless such amendment (a) does not provide for any net
increase of any costs or expenses to the Borrower; (b) will not cause a material
adverse effect on the Collateral; and (c) will not in any other manner
materially adversely effect the Agent or the Banks, or the Borrower's ability to
perform its obligations hereunder or under the other Loan Documents.
10.11. TRANSACTIONS WITH AFFILIATES. Neither the Guarantor nor the
Borrower will, nor will they permit any of their Subsidiaries to, enter into, or
cause, suffer or permit to exist any transaction or agreement with any Affiliate
except:
(a) employment agreements entered into in the ordinary course of
business by the Guarantor, the Borrower or any of their Subsidiaries and
loans and advances to employees of the Guarantor, the Borrower or any of
their Subsidiaries in the ordinary course of business for travel expenses,
drawing accounts or other similar business related expenses;
(b) any transaction or agreement having terms not less favorable to
the Guarantor, the Borrower and their Subsidiaries than would be the case
if such transaction or agreement had been entered into with a Person that
is not an Affiliate, PROVIDED that the aggregate potential value payable
or receivable by the Guarantor, the Borrower and their Subsidiaries in
connection with all such transactions during any fiscal year of the
Borrower (excluding transactions or agreements exclusively among or
between the Guarantor, the Borrower and their Subsidiaries) shall not
exceed $500,000; and
(c) as set forth on SCHEDULE 8.15.
11. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank
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has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
11.1. MINIMUM EBITDA. The Guarantor and the Borrower will not, as of the
end of any period described in the table set forth below, permit EBITDA for such
period, to be less than the amount set forth opposite such period in such table:
Period Amount
------ ------
Four consecutive fiscal quarters ending
on January 31, 1998 $14,500,000
Four consecutive fiscal quarters
ending on each of May 2, 1998 and
August 1, 1998 $15,000,000
Four consecutive fiscal quarters ending
on October 31, 1998 $17,500,000
Four consecutive fiscal quarters ending
on January 30, 1999 and thereafter $20,000,000
11.2. MINIMUM OPERATING CASH FLOW TO FIXED OBLIGATIONS RATIO. The
Guarantor and the Borrower will not permit the ratio of Consolidated Operating
Cash Flow to Consolidated Fixed Obligations for any period of four consecutive
fiscal quarters ending on the date set forth in the table below to be less than
the amount set forth opposite such date:
Period Ending Ratio
------------- -----
January 31, 1998 1.40:1.00
May 2, 1998 1.00:1.00
August 1, 1998 0.90:1.00
October 31, 1998 and
thereafter 1.50:1.00
12. CLOSING CONDITIONS.
The obligations of the Banks to make the Term Loan and the initial
Revolving Credit Loans and of the Agent to issue any initial Letters of Credit
shall be subject to the satisfaction of the following conditions precedent:
12.1. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall have
received from the Guarantor and the Borrower a certificate from a duly
authorized officer of such Person certifying to the effect that the copies of
each of its charter or other incorporation
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documents and its by-laws delivered to the Agent on May 23, 1996 in connection
with the Original Credit Agreement are true, correct and complete, remain in
full force and effect and there have been no amendments or revisions thereto.
12.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Guarantor and the Borrower of this
Credit Agreement and the other Loan Documents to which it is or is to become a
party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
12.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
the Guarantor and the Borrower an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of the Guarantor and the
Borrower, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Guarantor and the Borrower, each of the Loan Documents which the
Guarantor or the Borrower is or is to become a party; (b) in the case of the
Borrower, to make Loan Requests and Conversion Requests and to apply for Letters
of Credit; and (c) to give notices and to take other action on its behalf under
the Loan Documents.
12.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent for the benefit of the Agent and the Banks a legal,
valid and enforceable first (except for Permitted Liens entitled to priority
under applicable law) security interest in and lien upon the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such security
interests shall have been duly effected. The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.
12.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall have
received from each of the Guarantor and the Borrower an update of the Perfection
Certificate delivered by such Person on the Original Closing Date certified to
be true, correct and complete by such Person and the results of UCC searches
with respect to the Collateral, indicating no liens other than Permitted Liens
and otherwise in form and substance satisfactory to the Agent.
12.7. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and sec.9.7 and (b) certified copies
of all policies evidencing such insurance (or certificates therefore signed by
the insurer or an agent authorized to bind the insurer).
12.8. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of January 3, 1998.
12.9. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Guarantor and the Borrower dated as of the Closing
Date as to the solvency of the Guarantor and the Borrower and their Subsidiaries
following the consummation of the
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transactions contemplated herein and in form and substance reasonably
satisfactory to the Agent.
12.10. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Guarantor and the Borrower and its Subsidiaries; and
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., in-house counsel to the Guarantor and the
Borrower.
12.11. PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
Agent, as appropriate, the fees required pursuant to sec.6.1, as well as all
reasonable fees and expenses of the Agent, including, without limitation, the
fees and expenses of the Agent's Special Counsel and the costs and expenses of
appraisals, commercial finance examinations and the Agent's out-of-pocket
expenses.
12.12. DELIVERY OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ REPORT. The Agent shall have received a
report from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Partners, Inc. analyzing the Borrower's inventory,
which analysis shall be in form and substance reasonably satisfactory to the
Agent and the Banks.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, including Revolving Credit
Loans and the Term Loan, and of the Agent to issue, extend or renew any Letter
of Credit, in each case whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Guarantor, the Borrower and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
13.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank in reliance on advice of counsel to such Bank would make it illegal
for such Bank to make such Loan or to participate in the issuance, extension or
renewal of such Letter of Credit or in the reasonable opinion of the Agent in
reliance on advice of counsel to the Agent would make it illegal for the Agent
to issue, extend or renew such Letter of Credit.
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13.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
13.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as they may reasonably request.
13.5. BORROWING BASE REPORT. The Agent shall have received the most recent
Borrowing Base Report required to be delivered to the Agent in accordance with
sec.9.4(f).
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay (i) any principal of the Loans or
any Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment or (ii) any interest on the Loans
within three (3) Business Days following the date when the same shall
become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay the commitment fee, any Letter of
Credit Fee, or other sums due hereunder or under any of the other Loan
Documents, within five (5) Business Days following the date when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
(c) the Guarantor or the Borrower shall fail to comply with any of
its covenants contained in sec.sec.9 (other than the covenants contained
in secs.9.1 (which are governed by sec.14.1(a) and (b)), 9.6(b) or 9.8
(only with respect to state and local taxes, assessments, and other
governmental charges)), 10 (other than the covenants contained in
sec.10.8) or 11 or any of the covenants contained in any of the Mortgages
(after all applicable grace periods contained therein have elapsed);
(d) the Guarantor or the Borrower or any of their Subsidiaries shall
fail to perform any term, covenant or agreement contained herein or in any
of the other Loan Documents (other than those specified elsewhere in this
sec.14.1) for thirty (30) days after written notice of such failure has
been given to the Guarantor or the Borrower by the Agent or any Bank;
PROVIDED, HOWEVER, that in the event that any such failure to perform any
such term, covenant or agreement (other than the covenants contained
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in sec.9.8 (only with respect to state and local taxes, assessments and
other governmental charges) and sec.10.8) is capable of cure and so long
as the Guarantor or the Borrower, as the case may be, is using its best
efforts to effect such cure, the Guarantor or the Borrower, as the case
may be, shall have forty-five (45) days after the notice referred to above
has been given to cure such failure to perform; and PROVIDED, FURTHER,
that with respect to the covenants contained in sec.9.6(b), in the event
that any such failure to perform such covenant is not susceptible to cure
within thirty (30) days and so long as the Guarantor or the Borrower, as
the case may be, is using its best efforts to effect such cure, the
Guarantor or the Borrower, as the case may be, shall have such additional
time as may be necessary to cure such failure to perform;
(e) any representation or warranty of the Guarantor or the Borrower
or any of their Subsidiaries in this Credit Agreement or any of the other
Loan Documents or in any other document or instrument delivered pursuant
to or in connection with this Credit Agreement shall prove to have been
false or incorrect in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Guarantor or the Borrower or any of their Subsidiaries shall
fail to pay when due, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases in excess of $250,000, or fail to observe or perform
any material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases in excess of $250,000 for
such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) the Guarantor or the Borrower or any of their Subsidiaries shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Guarantor or the Borrower
or any of their Subsidiaries or of any substantial part of the assets of
the Guarantor or the Borrower or any of their Subsidiaries or shall
commence any case or other proceeding relating to the Guarantor or the
Borrower or any of their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law of any jurisdiction, now or hereafter in
effect, or shall take any action to authorize or in furtherance of any of
the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against the Guarantor
or the Borrower or any of their Subsidiaries and the Guarantor or the
Borrower or any of their Subsidiaries shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within ninety (90) days following the filing
thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Guarantor or the
Borrower or any of their Subsidiaries bankrupt or insolvent, or approving
a petition in any such case or other proceeding, or a decree or order for
relief is entered in respect of the Guarantor or the
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Borrower or any Subsidiary in an involuntary case under federal bankruptcy
laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than sixty (60) days, whether or not consecutive, any
final judgment against the Guarantor or the Borrower or any of their
Subsidiaries that, with other outstanding final judgments, undischarged,
against the Guarantor or the Borrower or any of their Subsidiaries exceeds
in the aggregate $1,000,000 (net of insurance coverage to the extent that
the Guarantor or the Borrower has filed a claim under applicable insurance
policies and reasonably and in good faith believes that the insurer is
obligated under the terms of such policy to pay such judgment) at any one
time;
(j) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents,
in each case otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or
any action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Guarantor or the Borrower or any of their Subsidiaries party
thereto or any of their respective stockholders (other than the
Guarantor's stockholders), or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more material provisions of the Loan Documents is
illegal, invalid or unenforceable in accordance with the terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in
their reasonable discretion that such event reasonably could be expected
to result in liability of the Borrower or any of its Subsidiaries to the
PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
$5,000,000 and such event in the circumstances occurring reasonably could
constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Guaranteed Pension Plan; or a
trustee shall have been appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted proceedings to
terminate such Guaranteed Pension Plan;
(l) the Guarantor, the Borrower or any of their Subsidiaries 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
thirty (30) days (unless such incident is covered by business interruption
insurance and the Guarantor, the Borrower or such Subsidiary has filed a
claim under applicable insurance policies and reasonably and in good faith
believes that the insurer is obligated under the terms of such policy or
policies to pay such claim);
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(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether 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 thirty
(30) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Guarantor, the Borrower or any
of their Subsidiaries, and such occurrence has a material adverse effect
on the business, financial condition or assets of the Guarantor, the
Borrower or any of their Subsidiaries;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Guarantor, the Borrower or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material adverse
effect on the business or financial condition of the Guarantor, the
Borrower or such Subsidiary;
(o) the Guarantor, the Borrower or any of their Subsidiaries shall
be indicted for a state or federal crime classified as a felony, or any
civil or criminal action shall otherwise have been brought against the
Guarantor, the Borrower or any of their Subsidiaries, a punishment for
which in any such case could include the forfeiture of any assets of the
Guarantor, the Borrower or such Subsidiary having a fair market value in
excess of $1,000,000; or
(p) (i) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
thirty percent (30%) or more of the outstanding shares of common stock of
the Guarantor, (ii) the Guarantor shall at any time legally or
beneficially own less than 100% of the capital stock of the Borrower or
(iii) during any period of twelve (12) consecutive calendar months,
individuals who were directors of the Guarantor or the Borrower on the
first day of such period shall cease to constitute a majority of the board
of directors of the Guarantor or the Borrower, as the case may be;
then, and in any such event, so long as the same may be continuing, the Agent,
upon the request of the Majority Banks shall, by notice in writing to the
Borrower declare all amounts owing to the Banks with respect to this Credit
Agreement, the Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; PROVIDED that in the
event of any Event of Default specified in secs.14.1(g) or 14.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in sec.14.1(g) or sec.14.1(h) shall occur, any unused portion
of the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans to the
Borrower and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall
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have occurred and be continuing, the Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrower, terminate the unused portion
of the credit hereunder, and upon such notice being given such unused portion of
the credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve the Guarantor, Borrower or
any of their Subsidiaries of any of the Obligations.
14.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Agent shall have
accelerated the maturity of the Loans pursuant to sec.14.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
14.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Event of Default, the Agent or
any Bank, as the case may be, applies any cash held pursuant to the Cash
Collateral Agreement or receives any monies in connection with the enforcement
of any of the Security Documents or otherwise with respect to the realization
upon any of the Collateral, or by voluntary payment, setoff in accordance with
sec.15 hereof or otherwise, such monies shall be distributed for application as
follows (it being understood that any amounts which are to be applied to the
Revolving Credit Loans pursuant to this sec.14.4. shall, to the extent BKB has
advanced Revolving Credit Loans to the Borrower pursuant to sec.2.6.2 hereof for
which a Settlement has not occurred, first be paid to BKB to be applied to any
Revolving Credit Loans made by BKB to the Borrower pursuant to sec.2.6.2 hereof
and in which a Settlement has not, at the time of such repayment, been
effected):
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses (to the extent such costs, expenses,
disbursements or losses are reimbursable expenses by the Borrower pursuant
to the terms of this Credit Agreement) which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent on
behalf of the Banks under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision
of adequate indemnity to the Agent against any taxes or liens which by law
shall have, or may have, priority over the rights of the Agent to such
monies;
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(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; PROVIDED, HOWEVER, that distributions in
respect of Obligations owing to the Banks with respect to each type of
Obligation such as interest, principal, fees and expenses, shall be made
among the Banks PRO RATA; and PROVIDED, FURTHER, that the Agent may in its
discretion make proper allowance to take into account any Obligations not
then due and payable, such amounts to be cash collateralized in accordance
with the Cash Collateral Agreement (which cash collateral may be invested
in Permitted Cash Collateral Investments);
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid
pursuant to sec.9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
15. SETOFF.
Regardless of the adequacy of any Collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of any Bank may be applied to or set off by any Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to any Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to any Bank, other than Indebtedness evidenced by
the Notes held by any Bank or constituting Reimbursement Obligations owed to any
Bank, such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by any Bank or constituting
Reimbursement Obligations owed to any Bank, and (b) if any Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Notes held by, or constituting Reimbursement Obligations owed to, any Bank by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Bank, or Reimbursement Obligations owed to, any Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, PRO TANTO
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement Obligations owed
it, its proportionate payment as contemplated by this Credit Agreement; PROVIDED
that if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.
16. THE AGENT.
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16.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
16.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
16.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
16.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the
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validity, enforceability or collectibility of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Guarantor, the Borrower or any of their Subsidiaries, or be bound to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect any of
the properties, books or records of the Guarantor, the Borrower or any of their
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Guarantor, the Borrower or any
holder of any of the Notes shall have been duly authorized or is true, accurate
and complete. The Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Banks
with respect to the credit worthiness or financial conditions of the Guarantor,
the Borrower or any of their Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
upon such information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
16.5. PAYMENTS.
16.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's PRO RATA share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
16.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
16.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (a) to make available to the Agent its PRO RATA share of
any Loan or to purchase any Letter of Credit Participation or (b) to
comply with the provisions of sec.15 with respect to making dispositions
and arrangements with the other Banks, where such Bank's share of any
payment received, whether by setoff or otherwise, is in excess of its PRO
RATA share of such payments due and payable to all of the Banks, in each
case as, when and to the full extent required by the provisions of this
Credit 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,
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whether on account of outstanding Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations. The Delinquent
Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective PRO RATA shares of
all outstanding Loans and Unpaid Reimbursement Obligations. 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
Loans and Unpaid Reimbursement Obligations of the nondelinquent Banks, the
Banks' respective PRO RATA shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
16.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any Note
or the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
16.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by sec.17), and liabilities of every nature and character arising out
of or related to this Credit Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that any
of the same shall be directly caused by the Agent's willful misconduct or gross
negligence.
16.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
16.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days' prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
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16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this sec.16.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
16.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
17. EXPENSES.
The Guarantor and the Borrower jointly and severally agree to pay (a) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein; (b)
any taxes (including any interest and penalties in respect thereto) payable by
the Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's net income) on or with respect to the transactions contemplated by this
Credit Agreement (the Guarantor and the Borrower hereby agreeing to indemnify
the Agent and each Bank with respect thereto); (c) the reasonable fees, expenses
and disbursements of the Agent's Special Counsel, or any local counsel to the
Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder; (d) the reasonable fees, expenses and disbursements
(but excluding internal overhead costs and expenses) of the Agent incurred by
the Agent in connection with the preparation, administration or interpretation
of the Loan Documents and other instruments mentioned herein, including all
title insurance premiums and appraisal charges; (e) any reasonable fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Agent in establishing, maintaining or handling Agency Accounts, Blocked
Accounts and other accounts for the collection of any of the Collateral; (f) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of any rights under any
of the Loan Documents against the Guarantor, the Borrower or any their
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Bank's or the Agent's
relationship with the Guarantor, the Borrower or any of their Subsidiaries; (g)
without
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duplication, all reasonable expenses incurred by the Banks (including counsel
and investment banking or financial consultant fees) in connection with any
investigation of any Default or Event of Default, the enforcement and collection
of the Notes and in connection with any amendment or requested amendment of, or
waiver or consent under or with respect to any of the Loan Documents, whether or
not such amendment or waiver becomes effective; and (h) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection with
UCC filings or mortgage recordings contemplated by the Loan Documents and UCC
searches conducted (i) prior to the Closing Date, (ii) on one occasion after the
Closing Date with respect to any new UCC-1 filings and (iii) after the
occurrence of an Event of Default. The covenants of this sec.17 are joint and
several and shall survive payment or satisfaction of all other Obligations.
18. INDEMNIFICATION.
Each of the Guarantor and the Borrower agrees to indemnify and hold
harmless the Agent and the Banks (and each of such Person's employees, officers,
directors, agents, attorneys or other advisors and shareholders) from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including, without
limitation, (a) any actual or proposed use by the Borrower of the proceeds of
any of the Loans or Letters of Credit, (b) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from Agency
Accounts or Blocked Accounts or in connection with the provisional honoring of
checks or other items, (c) any actual or alleged infringement of any patent,
copyright, trademark, service ▇▇▇▇ or similar right of the Guarantor or the
Borrower comprised in the Collateral, (d) the Guarantor or Borrower entering
into or performing this Credit Agreement or any of the other Loan Documents or
(e) with respect to the Guarantor or the Borrower and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding; PROVIDED, HOWEVER, that such indemnity shall not apply to the
portion, if any, of such losses, claims, damages, liabilities or related
expenses of any Person seeking indemnification that is determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
from the gross negligence or willful misconduct of the Person seeking
indemnification; and PROVIDED, FURTHER, that such indemnity shall not apply to
the portion, if any, of any losses, claims, damages, liabilities or related
expenses of any Bank resulting directly from any breach by such Bank of its
obligations under this Credit Agreement. In litigation, or the preparation
therefor, the Banks and the Agent shall be entitled to select their own counsel
and, in addition to the foregoing indemnity, the Guarantor and the Borrower
jointly and severally agree to pay promptly the reasonable fees and expenses of
such counsel. If, and to the extent that the obligations of Guarantor or the
Borrower under this sec.18 are unenforceable for any reason, the Guarantor and
the Borrower each hereby agree to make the maximum contribution to the payment
in satisfaction of such obligations which is permissible under applicable law.
The
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covenants contained in this sec.18 shall survive payment or satisfaction in
full of all other Obligations.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Guarantor, the Borrower or any of their
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Loans and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Notes or any of
the other Loan Documents remains outstanding or any Bank has any obligation to
make any Loans or the Agent has any obligation to issue, extend or renew any
Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All statements contained in any certificate
or other paper delivered to any Bank or the Agent at any time by or on behalf of
the Guarantor, the Borrower or any of their Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Guarantor, the Borrower or such Subsidiary
hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); PROVIDED that (a) the
Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower shall have given their prior written consent to such
assignment, which consent will not be unreasonably withheld, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (c) each
partial assignment shall be in an amount that is not less than $10,000,000 (or
the entire interest of such assigning Bank, if less than $10,000,000), and (d)
the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT F hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in sec.20.3, be
released from its obligations under this Credit Agreement. The Borrower, the
Agent and the Banks shall retain any claims or actions against the assigning
Bank to the extent that such claims or actions accrued or arose prior to the
effective date specified in such Assignment and Acceptance.
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20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Guarantor, the Borrower and their Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by the Guarantor, the Borrower and their
Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this
Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in sec.8.4 and sec.9.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank 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 Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
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(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its PRO
RATA share of Letter of Credit Fees in respect of outstanding Letters of
Credit.
20.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,500.
20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be substantially in the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this sec.20.4, the Borrower shall deliver an opinion of counsel
(which counsel may be the Borrower's internal counsel), addressed to the Banks
and the Agent, relating to the due authorization, execution and delivery of such
new Notes and the legality, validity and binding effect thereof, in a form
substantially similar to the opinions of counsel delivered on the Closing Date
and otherwise in form and substance reasonably satisfactory to the Banks. The
surrendered Notes shall be cancelled and returned to the Borrower.
20.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) any such sale or participation shall not affect the rights and duties
of the selling Bank hereunder to the Borrower and (b) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Bank as it relates to such participant or extend any
regularly scheduled payment date for principal or interest.
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20.6. DISCLOSURE. Each of the Guarantor and the Borrower agrees that in
addition to disclosures made in accordance with standard and customary banking
practices any Bank may disclose information obtained by such Bank pursuant to
this Credit Agreement to assignees or participants and potential assignees or
participants hereunder; PROVIDED that such assignees or participants or
potential assignees or participants shall agree (a) to treat in confidence such
information unless such information otherwise becomes public knowledge, (b) not
to disclose such information to a third party, except as required by law or
legal process and (c) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Guarantor or the Borrower, then any such
assignee Bank shall have no right to vote as a Bank hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to sec.14.1
or sec.14.2, and the determination of the Majority Banks shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans. If any Bank sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is the Guarantor or the Borrower or an
Affiliate of the Guarantor or the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to sec.14.1 or sec.14.2 to the
extent that such participation is beneficially owned by the Guarantor or the
Borrower or any Affiliate of the Guarantor or the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans to the extent of such participation.
20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
its rights to be indemnified pursuant to sec.18 with respect to any claims or
actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this sec.20 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Credit Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under sec.4 of the Federal Reserve Act, 12 U.S.C. sec.341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
20.9. ASSIGNMENT BY BORROWER. Neither the Guarantor nor the Borrower shall
assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks.
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21. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Guarantor or the Borrower, at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President and a separate copy
to ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., at the Borrower's address, with a copy to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Zinnershine LLP, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address for notice
as the Guarantor or the Borrower shall last have furnished in writing to
the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Mailstop 01-09-06,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice
President with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
22. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
GUARANTOR AND THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON GUARANTOR OR THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN
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SEC.21. EACH OF THE GUARANTOR AND THE BORROWER HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
23. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
sec.27.
26. WAIVER OF JURY TRIAL.
Each of the Guarantor and the Borrower hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, each of the
Guarantor and the Borrower hereby waives any right it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Each of the Guarantor and the Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Guarantor or the Borrower or any of their Subsidiaries of any terms of this
Credit Agreement, the other Loan Documents or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a
85
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particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Borrower and the written consent of the
Majority Banks. Notwithstanding the foregoing, the rate of interest on the Notes
(other than interest accruing pursuant to sec.6.10.2 following the effective
date of any waiver by the Majority Banks of the Default or Event of Default
relating thereto), the term of the Notes, the amount of the Commitments of the
Banks, and the amount of commitment fee or Letter of Credit Fees hereunder may
not be changed without the written consent of the Borrower and the written
consent of each Bank affected thereby; the Borrower's Obligations under the
Credit Agreement to pay principal and/or interest on account of the Loans may
not be forgiven in whole or in part without the written consent of all of the
Banks and the Borrower; this sec.27 may not be changed without the written
consent of all of the Banks and the Borrower; the definition of Majority Banks
may not be amended without the written consent of all of the Banks and the
Borrower; the release of any Guarantor or the release of any Collateral (other
than releases required by applicable law or in connection with dispositions
permitted under sec.10.5.2), if the aggregate value of all such Collateral
released from and after the Closing Date exceeds $10,000,000, may not be
consented to without the consent of all of the Banks; and the amount of any
Letter of Credit Fees payable for the Agent's account and sec.16 may not be
amended without the written consent of the Agent and the Borrower. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of or the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances. Nothing contained in sec.5.5 or sec.16.1 shall
be deemed to waive or impair any claims that the Borrower may have against any
of the Banks for any failure by such Bank to comply with its obligations under
this Credit Agreement.
28. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
29. CONFIDENTIALITY.
Each of the parties hereto acknowledges and agrees that, pursuant to the
Credit Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby, it may be the recipient of proprietary and confidential
information of the other parties hereto (any such information, the "Confidential
Information"). Each of the parties hereto agrees that it will hold any
Confidential Information of any other party hereto in confidence and will not
disclose such Confidential Information other than (a) to its employees or
professional advisors to the extent necessary for them to perform their duties
as employees or professional advisors, (b) disclosures by any of the Banks in
accordance with standard and customary practices, (c) to the extent permitted by
sec.20.6, (d) in the event that such party may be required to effect such
disclosure by order of a court of competent jurisdiction, or (e) any
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Confidential Information which is or becomes general public knowledge for a
reason other than such party's failure to comply with the provisions of this
sec.29.
30. TRANSITIONAL ARRANGEMENTS
30.1. ORIGINAL CREDIT AGREEMENT SUPERSEDED. This Credit Agreement shall on
the Closing Date supersede the Original Credit Agreement in its entirety, except
as provided in this sec.30. On the Closing Date, the rights and obligations of
the parties evidenced by the Original Credit Agreement shall be evidenced by the
Credit Agreement and other Loan Documents, the "Revolving Credit Loans" as
defined in the Original Credit Agreement shall be converted to Revolving Credit
Loans as defined herein, and all outstanding letters of credit issued by the
Agent for the account of the Borrower prior to the Closing Date shall, for the
purposes of this Credit Agreement, be Letters of Credit.
30.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably practicable
after its receipt of its Notes hereunder on the Closing Date, the Banks will
promptly return to the Borrower, marked "Substituted" or "Cancelled", as the
case may be, any notes of the Borrower held by the Banks pursuant to the
Original Credit Agreement.
30.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and fees
and expenses, if any, owing or accruing under or in respect of the Original
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (prorated in the case of any fractional periods), and shall be paid at the
times set forth in the Original Credit Agreement as if the Original Credit
Agreement were still in effect. In addition, any Loans (as defined in the
Original Credit Agreement) bearing interest at the Eurodollar Rate (as defined
in the Original Credit Agreement) shall continue as Eurodollar Rate Loans until
the end of the Interest Period (as defined in the Original Credit Agreement)
applicable to such Loans.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
FILENE'S BASEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
and Chief Financial Officer
FILENE'S BASEMENT CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
and Chief Financial Officer
BANKBOSTON, N.A. (f/k/a The First National
Bank of Boston), individually and as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
88
SCHEDULE 1
---------------------------------------------------------------------------------------------------------------------------
COMMITMENT TERM LOAN AMOUNT OF
BANK PERCENTAGE COMMITMENT PERCENTAGE TERM LOAN
---- ---------- ---------- ---------- ---------
---------------------------------------------------------------------------------------------------------------------------
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON)
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President 33.333333334% $21,666,666.66 33.333333334% $4,166,666.68
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ FINANCIAL, INC.
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President 33.333333333% $21,666,666.67 33.333333333% $4,166,666.66
---------------------------------------------------------------------------------------------------------------------------
BANKAMERICA BUSINESS CREDIT, INC.
Domestic and Eurodollar Lending Office:
East Division
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Division Manager 33.333333333% $21,666,666.67 33.333333333% $4,166,666.66
---------------------------------------------------------------------------------------------------------------------------
TOTAL 100% $65,000,000 100% $ 12,500,000
---------------------------------------------------------------------------------------------------------------------------
89
EXHIBIT A
FORM OF
BORROWING BASE REPORT
__________ __, 199_
BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Amended and Restated Revolving Credit and Term
Loan Agreement, dated as of January 30, 1998 (as amended and in effect from time
to time, the "Credit Agreement"), between the undersigned, Filene's Basement
Corp. (the "Guarantor"), BankBoston, N.A. (f/k/a The First National Bank of
Boston) and the other lending institutions listed on SCHEDULE 1 thereto (the
"Banks"), and BankBoston, N.A. as agent for the Banks (the "Agent"). Capitalized
terms which are used herein without definition and which are defined in the
Credit Agreement shall have the same meanings herein as therein.
The undersigned hereby certifies as follows: (a) the information furnished
in the materials attached hereto was true, correct and complete as of the last
day of the calendar week immediately preceding the date of this certificate; (b)
as of the date hereof, there exists no Default or Event of Default; and (c) the
representations and warranties contained in sec.8 of the Credit Agreement were
correct when made and are correct at and as of the date hereof except to the
extent any such representation or warranty expressly relates to an earlier date.
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Certificate on behalf of Filene's Basement, Inc. as of the date first written
above.
FILENE'S BASEMENT, INC.
By:______________________________
Title:
90
[worksheet to be provided by Borrower]
91
EXHIBIT B
FORM OF AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$________________________ as of January 30, 1998
FOR VALUE RECEIVED, the undersigned FILENE'S BASEMENT, INC., a
Massachusetts corporation (the "Borrower"), hereby promises to pay to the order
of _______________________________, a _______________________ (the "Bank") at
the Agent's Head Office (as defined in the Credit Agreement, as hereinafter
defined):
(a) prior to or on the Maturity Date the principal amount of
_______________________ Dollars ($_______________) or, if less, the
aggregate unpaid principal amount of Revolving Credit Loans advanced by
the Bank to the Borrower pursuant to the Amended and Restated Revolving
Credit and Term Loan Agreement dated as of January 30, 1998 (as amended
and in effect from time to time, the "Credit Agreement"), among the
Borrower, the Bank and other parties thereto;
(b) the principal outstanding hereunder from time to time at the
times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through and
including the final payment in full hereof at the times and at the rate
provided in the Credit Agreement.
This Amended and Restated Revolving Credit Note (this "Note") evidences
borrowings under and has been issued by the Borrower in accordance with the
terms of the Credit Agreement. This Note has been issued in substitution for,
but not in satisfaction of, the Revolving Credit Note issued by the Borrower on
June 28, 1996 to the order of the Bank. The Bank and any holder hereof is
entitled to the benefits of the Credit Agreement, the Security Documents and the
other Loan Documents, and may enforce the agreements of the Borrower contained
therein, and any holder hereof may exercise the respective remedies provided for
thereby or otherwise available in respect thereof, all subject to and in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Revolving Credit Loan or at the
time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to any
Revolving Credit Loans shall be, absent manifest error, PRIMA FACIE evidence of
the principal amount thereof
92
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owing and unpaid to the Bank, but the failure to record, or any error in so
recording, any such amount on any such grid, continuation or other record shall
not limit or otherwise affect the obligation of the Borrower hereunder or under
the Credit Agreement to make payments of principal of and interest on this Note
when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SEC.21 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated
Revolving Credit Note to be signed in its corporate name and its corporate seal
to be impressed thereon by its duly authorized officer as of the day and year
first above written.
[Corporate Seal]
FILENE'S BASEMENT, INC.
By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
and Chief Financial Officer
94
EXHIBIT C
FORM OF
LOAN REQUEST
Date: __________
BankBoston, N.A.,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Ladies and Gentlemen:
The undersigned authorized officer of Filene's Basement, Inc. (the
"Borrower"), refers to the Amended and Restated Revolving Credit and Term Loan
Agreement, dated as of January 30, 1998 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the Borrower,
Filene's Basement Corp. (the "Guarantor"), BankBoston, N.A. (f/k/a The First
National Bank of Boston) and the other lending institutions listed on SCHEDULE 1
thereto (the "Banks"), and BankBoston, N.A. as agent for the Banks (hereinafter
in such capacity, the "Agent"), and hereby [gives you notice] [confirms the
telephonic notice previously given] pursuant to sec.2.6 of the Credit Agreement
that the Borrower hereby requests a Revolving Credit Loan under the Credit
Agreement, and in that connection sets forth below the information relating to
such Loan (the "Proposed Loan") as required by sec.2.6 of the Credit Agreement:
(i) The requested Drawdown Date of the Proposed Loan is ________;
(ii) The aggregate amount of the Proposed Loan is $___________;
(iii) The Type of the Proposed Loan is _______; and
(iv) If such Proposed Loan is a Eurodollar Rate Loan, the Interest Period
is ___________.
The undersigned authorized officer of the Borrower hereby certifies on
behalf of the Borrower that:
(i) no Default or Event of Default under the Credit Agreement exists on
the date of this Loan Request, or shall occur as a result of the
Proposed Loan to which this Loan Request relates;
95
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(ii) the representations and warranties contained in the Credit Agreement
were true and correct as of the date on which made and are true and
correct as of the date hereof with the same effect as if made at and
as of such time, except to the extent that the facts upon which such
representations and warranties are based may have changed in the
ordinary course as a result of transactions permitted or
contemplated by the Credit Agreement and to the extent such
representations and warranties relate expressly to an earlier time;
(iii) the Borrower has performed all obligations and complied with all
covenants and conditions required by the Credit Agreement to be
performed or complied with by it on or prior to the date hereof; and
(iv) the matters certified herein shall remain true from and after the
date hereof through the date of the Proposed Loan unless the
Borrower shall deliver to the Agent a certificate as to any change
in any such matters, which the Borrower hereby agrees to give
promptly after obtaining knowledge thereof.
We hereby authorize you to disburse the proceeds of the Proposed Loan as
follows:
[insert applicable disbursement instructions]
The undersigned does not assume any personal liability for the accuracy of
this certificate.
Very truly yours,
FILENE'S BASEMENT, INC.
By:____________________________________
Title:
96
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The Borrower hereby confirms that the above-requested Loan was funded on
________, __, ____ by the Banks in accordance with the Credit Agreement.
FILENE'S BASEMENT, INC.
By:____________________________________
Title:
97
EXHIBIT D
FORM OF
TERM NOTE
$_____________________ as of January 30, 1998
FOR VALUE RECEIVED, the undersigned FILENE'S BASEMENT, INC., a
Massachusetts corporation, (the "Borrower"), hereby promises to pay to the order
of ___________________________, a ____________________________ (the "Bank") at
the Agent's Head Office (as defined in the Credit Agreement, as hereinafter
defined):
(a) prior to or on the Maturity Date the principal amount of
_________________ Dollars ($_____________), evidencing the Term Loan made
by the Bank to the Borrower pursuant to the Amended and Restated Revolving
Credit and Term Loan Agreement dated as of January 30, 1998 (as amended
and in effect from time to time, the "Credit Agreement"), by and among the
Borrower, the Bank and other parties thereto;
(b) the principal outstanding hereunder from time to time at the
times provided in the Credit Agreement; and
(c) interest from the date hereof on the principal amount from time
to time outstanding to and including the maturity hereof at the rates and
times and in all cases in accordance with the terms of the Credit
Agreement.
This Term Note (this "Note") evidences borrowings under and has been
issued by the Borrower in accordance with the terms of the Credit Agreement. The
Bank and any holder hereof is entitled to the benefits of the Credit Agreement,
the Security Documents and the other Loan Documents, and may enforce the
agreements of the Borrower contained therein, and any holder hereof may exercise
the respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Note and not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the receipt of
such payment. The outstanding amount of the Term Loan set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to the
Term Loan shall be, absent manifest error, PRIMA FACIE evidence of the principal
amount of the Term Loan owing and unpaid to the Bank, but the failure to record,
or any error in so recording, any such amount on any such grid, continuation or
other record shall not limit or otherwise affect the obligation of the Borrower
hereunder or under the Credit Agreement to make payments of principal of and
interest on this Note when due.
98
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The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any future occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SEC.21 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed in
its corporate name and its corporate seal to be impressed thereon by its duly
authorized officer as of the day and year first above written.
[Corporate Seal]
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FILENE'S BASEMENT, INC.
By: _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice
President and Chief Financial Officer
100
EXHIBIT E
FORM OF
COMPLIANCE CERTIFICATE
Pursuant to sec.9.4 of the Amended and Restated Revolving Credit and Term
Loan Agreement (the "Credit Agreement") dated as January 30, 1998, among
Filene's Basement Corp. (the "Guarantor"), Filene's Basement, Inc. (the
"Borrower"), BankBoston, N.A. (f/k/a The First National Bank of Boston) and the
lending institutions referred to therein as Banks (collectively, the "Banks"),
BankBoston, N.A. as agent for the Banks (the "Agent"), the undersigned [INSERT
NAME], the duly elected and qualified [CHIEF FINANCIAL OFFICER] [CHIEF
ACCOUNTING OFFICER] [TREASURER] of the Borrower, hereby certifies as of the date
hereof the following:
NO DEFAULTS: I have read the Credit Agreement and, to the best of my
knowledge and belief, neither the Borrower nor the Guarantor is in default in
the performance or observance of any of the covenants, terms or provisions of
the Credit Agreement. [IF THE BORROWER OR GUARANTOR IS IN DEFAULT, THE SIGNER OF
THIS CERTIFICATE SHALL SPECIFY ALL SUCH DEFAULTS AND THE NATURE THEREOF.]
Attached hereto is SCHEDULE A, on which are set forth all relevant calculations
needed to determine whether the Borrower and the Guarantor are in compliance
with the covenants set forth in sec.11 of the Credit Agreement, which
calculations are based on the most recent financial statements required to be
supplied by the Borrower and the Guarantor under the Credit Agreement. I have no
knowledge of the occurrence of any event since the date of such financial
statements which would render this certificate incorrect as of the date hereof.
REPRESENTATIONS AND WARRANTIES: The representations and warranties
contained in the Credit Agreement were true and correct as of the date on which
made and are true and correct as of the date hereof with the same effect as if
made at and as of such time, except to the extent that the facts upon which such
representations and warranties are based may have changed in the ordinary course
as a result of transactions permitted or contemplated by the Credit Agreement
and to the extent such representations and warranties relate expressly to an
earlier time.
The undersigned does not assume any personal liability for the accuracy of
this certificate.
____________________________________
Name:
Title:
____________________________________
Date:
101
SCHEDULE A
TO
COMPLIANCE CERTIFICATE
For the period ended ________________________.
The computations which produced the figures set forth on this SCHEDULE A
are set forth on ANNEX A hereto. Capitalized terms used herein without
definition shall have the meanings assigned to such terms in the Credit
Agreement.
SEC.11.1 MINIMUM EBITDA
(a) EBITDA $__________
(b) Minimum permissible EBITDA
Period Amount
------ ------
Four consecutive fiscal quarters ending
on January 31, 1998 $14,500,000
Four consecutive fiscal quarters
ending on May 2, 1998 $15,000,000
Four consecutive fiscal quarters ending
on August 1, 1998 $15,000,000
Four consecutive fiscal quarters ending
on October 31, 1998 $17,500,000
Four consecutive fiscal quarters ending
on January 30, 1999 and thereafter $20,000,000
102
SEC.11.2 MINIMUM OPERATING CASH FLOW TO FIXED OBLIGATIONS
(a) Ratio of Consolidated Operating Cash
Flow to Fixed Obligations ____:1:00
(b) Minimum permissible ratio:
Period Ending Ratio
------------- -----
January 31, 1998 1.40:1.00
May 2, 1998 1.00:1.00
August 1, 1998 .90:1.00
October 31, 1998 and thereafter 1.50:1.00
103
ANNEX A
For the period ended __________.
Capitalized items used herein without definition shall have the meanings
assigned to such terms in the Credit Agreement.
SEC.11.1 MINIMUM EBITDA
(a) Consolidated Net Income for such period, $___________
PLUS
(b) depreciation and amortization for such period, $___________
PLUS
(c) without duplication, other non-cash charges
(exclusive of current period accruals) per
definition made in calculating Consolidated
Net Income for such period, $___________
PLUS
(d) tax expense for such period, $___________
PLUS
(e) Consolidated Total Interest Expense during
such period to the extent deducted
in the calculation of Consolidated Net Income $___________
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SEC.11.2 MINIMUM OPERATING CASH FLOW TO FIXED OBLIGATIONS
(a) Consolidated Operating Cash Flow:
(i) EBITDA for such four fiscal
quarters $___________
(ii) the aggregate amount of Capital Expenditures
made during such four fiscal quarters $___________
(iii) Expenditures made during FYE 1/30/99 for the
opening of new stores or remodeling of existing
stores up to a maximum amount of $12,500,000 $___________
(iv) cash payments for all taxes made during such
period $___________
(v) Consolidated Operating Cash Flow $___________
((i) MINUS (ii) PLUS (iii) MINUS (iv))
(b) Consolidated Fixed Obligations:
(i) regularly scheduled principal payments
for such four fiscal quarters $___________
(ii) regularly scheduled interest payments
for such four fiscal quarters $___________
(iii) Consolidated Fixed Obligations
((i) PLUS (ii)) $___________
(c) Ratio of Consolidated Operating Cash Flow to
Consolidated Fixed Obligations
(ratio of (a)(v) to (b)(iii)) _____:1.00
105
EXHIBIT F
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of ____, 19__
Reference is made to the Amended and Restated Revolving Credit and Term
Loan Agreement, dated as of January 30, 1998 (as from time to time amended and
in effect, the "Credit Agreement"), by and among Filene's Basement, Inc. (the
"Borrower"), Filene's Basement Corp. (the "Guarantor"), each a Massachusetts
corporation, BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association and the other lending institutions listed on
SCHEDULE 1 thereto (the "Banks"), and BankBoston, N.A. as agent for the Banks
(hereinafter in such capacity, the "Agent"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.
[NAME OF ASSIGNOR] (the "Assignor") and [NAME OF ASSIGNEE] (the
"Assignee") hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment and
Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$___________ interest in and to the rights, benefits, indemnities and
obligations of the Assignor under the Credit Agreement equal to ____________% in
respect of the Total Commitment with respect to Revolving Credit Loans and
Letter of Credit Participations and the same percentage in respect of the Term
Loan, each as in effect immediately prior to the Effective Date (as hereinafter
defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (a) represents and warrants
(i) that it is legally authorized to enter into this Assignment and Acceptance,
(ii) as of the date hereof, its Commitment (with respect to Revolving Credit
Loans and Letter of Credit Participations) is $______________, its Commitment
Percentage is __________%, the aggregate outstanding principal balance of its
Revolving Credit Loans equals $_____________, the aggregate amount of its Letter
of Credit Participations equals $_____________ and the aggregate outstanding
balance of its Term Loan equals $______________ (in each case after giving
effect to the assignment contemplated hereby but without giving effect to any
contemplated assignments which have not yet become effective), and (iii)
immediately after giving effect to all assignments which have not yet become
effective, the Assignor's Commitment Percentage will be sufficient to give
effect to this Assignment and Acceptance, (b) makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto or the attachment, perfection or priority of any
security interest or mortgage, other than that it is the legal and beneficial
owner of the
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interest being assigned by it hereunder free and clear of any claim or
encumbrance; (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Guarantor,
Borrower or any of their Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance or
observance by the Guarantor, Borrower or any of their Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of its obligations under the Credit Agreement or any of the other Loan
Documents or any other instrument or document delivered or executed pursuant
thereto; and (d) attaches hereto the Amended and Restated Revolving Credit Note
(the "Revolving Credit Note") and the Term Note (the "Term Note") delivered to
it under the Credit Agreement.
The Assignor requests that the Borrower exchange the Assignor's Revolving
Credit Note and Term Note for new Revolving Credit Notes and Term Notes payable
to the Assignor and the Assignee as follows:
Notes Payable to Amount of Revolving Amount of
The Order of: Credit Note Term Note
------------- ----------- ---------
Assignor $______________ $______________
Assignee $______________ $______________
3. ASSIGNEE'S REPRESENTATIONS. The Assignee (a) represents and warrants
that (i) it is duly and legally authorized to enter into this Assignment and
Acceptance, (ii) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any agreement binding on the Assignee, (iii) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Assignment and
Acceptance, and to render the same the legal, valid and binding obligation of
the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to sec.sec.8.4 and 9.4 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Bank 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 the Credit Agreement; (d) represents and warrants that it is an
Eligible Assignee; (e) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (f) agrees that
it will perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank; (g)
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance and (h) acknowledges that it has made arrangements
with the Assignor satisfactory to the Assignee with respect to its PRO RATA
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
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4. EFFECTIVE DATE. The effective date for this Assignment and Acceptance
shall be ___________" \@ "MMMM d, yyyy" \* charformat ___________ (the
"Effective Date"). Following the execution of this Assignment and Acceptance,
each party hereto shall deliver its duly executed counterpart hereof to the
Agent for acceptance by the Agent and recording in the Register by the Agent.
SCHEDULE 1 to the Credit Agreement shall thereupon be replaced as of the
Effective Date by the SCHEDULE 1 annexed hereto.
5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance and recording, from
and after the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Bank thereunder, and (b) the Assignor shall,
with respect to that portion of its interest under the Credit Agreement assigned
hereunder, relinquish its rights and (subject to the terms of sec.20.1 of the
Credit Agreement) be released from its obligations under the Credit Agreement;
PROVIDED, HOWEVER, that the Assignor shall retain its rights to be indemnified
pursuant to sec.18 of the Credit Agreement with respect to any claims or actions
arising prior to the Effective Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by the
Agent and such recording, from and after the Effective Date, the Agent shall
make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO
CONFLICT OF LAWS).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
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IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[NAME OF ASSIGNOR]
By:________________________________
Title:
[NAME OF ASSIGNEE]
By:________________________________
Title:
CONSENTED TO:
BANKBOSTON, N.A. (F/K/A THE
FIRST NATIONAL BANK OF BOSTON),
as Agent
By:___________________________
Title:
FILENE'S BASEMENT, INC.
By:___________________________
Title:
109
EXHIBIT G
FORM OF LANDLORD WAIVER
The undersigned person, or corporation, business trust, joint venture,
association, company, partnership, government or other entity, named on the
first signature page hereto on the line above the word Lessor (the "Lessor")
represents and warrants that he, she or it, as the case may be, is the owner and
lessor of the leased premises related to the Lease/Leases (as defined below),
with the buildings thereon (the "Premises"), leased to Filene's Basement, Inc.,
a Massachusetts corporation (such corporation and its successors in interest
being hereinafter referred to as the "Lessee") under the terms and conditions of
a lease or leases identified on SCHEDULE A attached hereto (together with all
amendments thereto, the "Lease/Leases"). The Lessee has entered into a revolving
credit and term loan facility (the "Credit Facility") with certain lenders (the
"Lenders") under the terms of which the Lessee may grant a security interest to
the Lenders in all assets of the Lessee located upon the Premises and in all
proceeds and products thereof (such assets and such proceeds and products being
collectively referred to as the "Collateral"). Notwithstanding anything to the
contrary contained herein, Collateral shall not include leasehold improvements
and fixtures (other than removable trade fixtures which can be removed without
damage to the premises). In recognition and acknowledgment thereof, the Lessor,
for good and valuable consideration, the receipt and sufficiency which are
hereby acknowledged, does hereby:
(1) Agree that any and all Collateral located upon the Premises is and
will remain personal property of the Lessee or its affiliates and
will not become part of the Premises; and
(2) Waive, relinquish and release any and all rights of distraint,
attachment, lien, levy or execution against or upon, or security
interest in, the Collateral for any rent or other sum now or
hereinafter due Lessor under the terms and conditions of the
Lease/Leases or otherwise, and all claims and demands of every kind
and nature whatsoever against the Collateral during the term of the
Credit Facility and any renewals, restatements, amendments,
extensions or modifications thereof or substitutions therefor (and
the Lessor hereby represents and warrants that he, she or it, as the
case may be, has not previously assigned, pledged or otherwise
transferred any such rights, claims or demands).
110
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IN WITNESS WHEREOF, the Lessor has executed this Lessor's Waiver as of
this ___ day of ________________19__.
Signed and delivered
in the presence of:
___________________________ __________________________________
Lessor
___________________________ By:_______________________________
Name:
Title:
111
EXHIBIT 3
FILENE'S BASEMENT CORP.
EXECUTIVE SEVERANCE PLAN TRUST AGREEMENT
DIRECTION TO PAY PREMIUMS
Date:__________
To:____________________________
____________________________
____________________________
as Trustee of the Filene's Basement Corp.
Executive Severance Plan Trust
Deposited herewith is the sum of ___________________ dollars and
______________ cents ($________). You are directed to hold and invest such
amount pursuant to the terms of the Filene's Basement Corp. Executive Severance
Plan Trust Agreement ("Trust Agreement"), and to apply trust assets to the
payment of premiums on Policies as follows:
Policy #______________
Amount to be applied to premium payment: $____________
Premium due date: _____________________
Name and address of insurer:
_______________________________
_______________________________
_______________________________
_______________________________
Wire transfer instructions:
You are hereby directed to transmit the designated amount to the insurer
by U.S. mail, first class, postage prepaid, five (5) business days prior to the
premium due date; provided that if wire transfer instructions have been provided
above, you shall wire transfer such amount to the insurer on the premium due
date.
Filene's Basement Corp.
By____________________________________
____________________________________
Title
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112
EXHIBIT 4
FILENE'S BASEMENT CORP.
EXECUTIVE SEVERANCE PLAN TRUST AGREEMENT
CERTIFICATE OF TERMINATION OF EXECUTIVE'S
EMPLOYMENT UNDER CONDITIONS THAT
DO NOT RELEASE THE REFUND RIGHT TO EXECUTIVE
Date:______________________
To: ________________________
________________________
________________________
as Trustee of the Filene's Basement Corp.
Executive Severance Plan Trust
You are hereby directed, pursuant to Section 6.2 of the Trust Agreement,
to release the Refund Right to Filene's Basement Corp. upon receipt of this
certificate in properly completed form.
The undersigned, under penalties of perjury, hereby certify that
Executive's employment with Filene's Basement Corp. terminated on
_________________________ under conditions that do not require the release of
the Refund Right with respect to the Policies listed below to the Executive.
This certificate must be executed by Filene's Basement Corp. and (a)
executed by Executive, (b) executed by Executive's executor or personal
representative and accompanied by evidence that the signatory is Executive's
personal representative, or (c) accompanied by a certified death certificate of
Executive showing a date of death no later than the above-stated date of
termination of Executive's employment.
Name of Executive:________________________
Affected Policy Nos.____________________
FILENE'S BASEMENT CORP.
By:_____________________________
Name:___________________________
________________________________ Title:__________________________
Executive or Executive's
Executor or Personal Representative
NOTARY STATEMENT
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