CREDIT AGREEMENT
by and among
LINENS 'N THINGS, INC.,
THE SUBSIDIARY BORROWERS PARTY HERETO,
THE LENDERS PARTY HERETO,
and
THE BANK OF NEW YORK,
as Agent,
with
BNY CAPITAL MARKETS, INC., as Arranging Agent
--------------------------
$90,000,000
--------------------------
Dated as of March 31, 1998
CREDIT AGREEMENT, dated as of March 31, 1998, by and among LINENS 'N
THINGS, INC., a Delaware corporation (the "COMPANY"), each Subsidiary Borrower
which is a signatory hereto or becomes a party hereto pursuant to the provisions
of Section 2.10, the Lenders party hereto from time to time (each a "LENDER"
and, collectively, the "LENDERS") and THE BANK OF NEW YORK ("BNY"), as agent for
the Lenders (in such capacity, the "AGENT"). This Agreement amends and restates
in its entirety the Credit Agreement, dated as of November 20, 1996, by and
among the Company, each subsidiary party thereto, the lenders party thereto and
The Bank of New York, as agent, as amended (the "Prior Credit Agreement"). All
Loans, Letters of Credit and Reimbursement Obligations outstanding (and as
defined) under the Prior Credit Agreement on the Effective Date of this
Agreement shall constitute Loans, Letters of Credit and Reimbursement
Obligations under this Agreement.
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
When used in any Loan Document (as defined below), each of
the following terms shall have the meaning ascribed thereto unless the context
otherwise specifically requires:
"ABR Advances": the Revolving Credit Loans (or any portions thereof) at
such time as they (or such portions) are made or are being maintained at a rate
of interest based upon the Alternate Base Rate.
"Accumulated Funding Deficiency": defined in Section 302 of ERISA.
"Acquisition": with respect to any Person, the purchase or other
acquisition by such Person, by any means whatsoever (including by devise,
bequest, gift, through a dividend or otherwise), of (a) stock of, or other
equity securities of, any other Person if, immediately thereafter, such other
Person would be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern or division or
segment thereof, or (c) the Property of any other Person other than in the
ordinary course of business, provided, however, that no acquisition of
substantially all of the assets, or any division or segment, of such other
Person shall be deemed to be in the ordinary course of business.
"Affected Advance": defined in Section 3.8(b).
"Affiliate": with respect to any Person at any time and from time to
time, any other Person (other than a wholly-owned subsidiary of such Person)
which, at such time (a) controls such Person, (b) is controlled by such Person
or (c) is under common control with such Person. The term "control", as used in
this definition with respect to any Person, means the power, whether direct or
indirect through one or more intermediaries, to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities or other interests, by contract or otherwise.
"Agent": defined in the preamble.
"Aggregate Commitment Amount": at any time, the sum of the Commitment
Amounts of the Lenders at such time.
"Aggregate Credit Exposure": at any time, the sum of (a) the aggregate
Committed Credit Exposure of the Lenders at such time and (b) the aggregate
outstanding principal balance of all Competitive Bid Loans at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum equal to the
greater of (a) the BNY Rate in effect on such day, or (b) 0.50% plus the Federal
Funds Effective Rate (rounded, if necessary, to the nearest 1/100th of 1% or, if
there is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%) in effect
on such day.
"Applicable Margin": (i) with respect to the unpaid principal balance
of ABR Advances, the applicable percentage set forth below in the column
entitled "ABR Advances", (ii) with respect to the unpaid principal balance of
Eurodollar Advances, the applicable percentage set forth below in the column
entitled "Eurodollar Advances", (iii) with respect to the Facility Fee, the
applicable percentage set forth below in the column entitled "Facility Fee" (iv)
with respect to the Letter of Credit Participation Fee, the applicable
percentage set forth below in the column entitled "Standby Letters of Credit" or
"Commercial Letters of Credit"; in each case opposite the applicable Pricing
Level:
Standby Commercial
ABR Eurodollar Facility Letters Letters of
Pricing Level Advances Advances Fee of Credit Credit
------------------- -------- ---------- -------- -------- ----------
Pricing Level I 0% 0.475% 0.150% 0.475% 0.2375%
Pricing Level II 0% 0.565% 0.185% 0.565% 0.2825%
Pricing Level III 0% 0.650% 0.200% 0.650% 0.3250%
Pricing Level IV 0% 0.700% 0.300% 0.700% 0.3500%
Pricing Level V 0% 0.975% 0.400% 0.975% 0.4875%
Changes in the Applicable Margin resulting from a change in a
Pricing Level shall become effective upon the date of the delivery by the
Company to the Agent of a certificate pursuant to Section 7.7(c) evidencing a
change in the Fixed Charge Coverage Ratio which would affect the applicable
Pricing Level. If the Company shall fail to deliver a certificate within 50 days
after the end of each of the first three fiscal quarters (or 90 days after the
end of the last fiscal quarter) as required by Section 7.7(c), Pricing Level V
shall apply from and including the 51st day (the 91st day in the case of the
last quarter) after the end of such fiscal quarter to the date of the delivery
by the Company to the Agent of a certificate demonstrating that a different
Pricing Level is applicable.
"Approved Bank": any bank whose short-term commercial paper rating from
(i) S&P is at least A-1 or the equivalent thereof or (ii) ▇▇▇▇▇'▇ is at least
P-1 or the equivalent thereof.
"Assignment": defined in Section 12.7(c).
"Assignment and Acceptance Agreement": an assignment and acceptance
agreement executed by an assignor and an assignee pursuant to which, subject to
the terms and conditions hereof and thereof, the assignor assigns to the
assignee all or any portion of such assignor's interests under this Agreement,
substantially in the form of Exhibit G.
"Assignment Fee": defined in Section 12.7(c).
"Authorized Signatory": as to (i) any Person which is a corporation,
the chairman of the board, the president, any vice president, the chief
financial officer or any other officer (acceptable to the Agent) of such Person
and (ii) any Person which is not a corporation, the general partner or other
managing Person thereof.
"Benefited Lender": defined in Section 12.9(b).
"BNY": defined in the preamble.
"BNY Rate": a rate of interest per annum equal to the rate of interest
publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"BNYCMI": BNY Capital Markets, Inc., the Arranging Agent.
"Borrower Addendum": an Addendum in the form of Exhibit D pursuant to
which a Subsidiary of the Company may become a Subsidiary Borrower pursuant to
the provisions of Section 2.11.
"Borrowers": collectively, the Company and the Subsidiary Borrowers;
each a "Borrower".
"Borrowing Date": (i) in respect of Revolving Credit Loans, any
Business Day on which the Lenders shall make Revolving Credit Loans pursuant to
a Borrowing Request or pursuant to a Mandatory Borrowing, (ii) in respect of
Swing Line Loans, any Business Day on which the Swing Line Lender shall make a
Swing Line Loan pursuant to a Borrowing Request, (iii) in respect of Letters of
Credit, any Business Day on which the Issuer shall issue a Letter of Credit
pursuant to a Letter of Credit Request and (iv) in respect of Competitive Bid
Loans, any Business Day on which a Lender shall make a Competitive Bid Loan
pursuant to a Competitive Bid Request.
"Borrowing Request": a request for Revolving Credit Loans or Swing Line
Loans in the form of Exhibit B.
"Cash Equivalents": (i) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than six months from the date
of acquisition, (ii) Dollar denominated time deposits, certificates of deposit
and bankers acceptances of (x) any Lender or (y) any Approved Bank, in each case
with maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial or financial company with a long term
unsecured debt rating of at least A or A-2, or the equivalent of each thereof,
by S&P or Moody's, as the case may be, and in each case maturing within six
months after the date of acquisition, (iv) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's, (v) investments in money
market funds substantially all the assets of which are comprised of securities
of the types described in clauses (i) through (iv) above, (vi) investments in
tax-exempt municipal bonds maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable with respect thereto from either S&P or Moody's and
(vii) investments in overnight repurchase agreements with any Lender or any
primary securities dealer to the extent that such Lender or securities dealer is
able to segregate the securities subject to such repurchase agreements and such
securities consist of the type described in clauses (i) and (iii) above.
"Commitment": in respect of any Lender, such Lender's undertaking to
make Revolving Credit Loans, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not to exceed the Commitment Amount of
such Lender.
"Commitment Amount": at any time and with respect to any Lender, the
amount set forth adjacent to such Lender's name under the heading "Commitment
Amount" in Exhibit A at such time or, in the event that such Lender is not
listed on Exhibit A, the "Commitment Amount" which such Lender shall have
assumed upon becoming a Lender pursuant to Section 2.13 or assumed from another
Lender in accordance with Section 12.7 on or prior to such time, as the same may
be adjusted from time to time pursuant to Sections 2.6, 2.13 and 12.7(c).
"Commitment Percentage": at any time and with respect to any Lender, a
fraction the numerator of which is such Lender's Commitment Amount at such time,
and the denominator of which is the Aggregate Commitment Amount at such time.
"Commitment Period": the period commencing on the Effective Date and
ending on the Commitment Termination Date, or on such earlier date as all of the
Commitments shall have been terminated in accordance with the terms hereof.
"Commitment Termination Date": the earlier of _______, 2002 and the
date on which the Loans shall become due and payable, whether by acceleration,
notice of intention to prepay or otherwise.
"Committed Credit Exposure": with respect to any Lender at any time,
the sum at such time of (a) the outstanding principal balance of such Lender's
Revolving Credit Loans, (b) the Swing Line Exposure of such Lender and (c) the
Letter of Credit Exposure of such Lender.
"Company Guaranty": the guaranty of the Company as set forth in Section
11.
"Compensatory Interest Payment": defined in Section 3.4(c).
"Competitive Bid": an offer by a Lender, in the form of Exhibit L, to
make one or more Competitive Bid Loans.
"Competitive Bid Accept/Reject Letter": a notification made by the
Company on behalf of a Borrower pursuant to Section 2.4(d) in the form of
Exhibit M.
"Competitive Bid Loan": defined in Section 2.4(a).
"Competitive Bid Maximum Amount": $35,000,000.
"Competitive Bid Rate": with respect to any Competitive Bid made by a
Lender pursuant to Section 2.4(b), the fixed rate of interest (which shall be
expressed in the form of a decimal to no more than four decimal places) offered
by such Lender and accepted by the Company on behalf of a Borrower.
"Competitive Bid Request": a request by the Company on behalf of a
Borrower, in the form of Exhibit J, for Competitive Bids.
"Competitive Interest Period": as to any Competitive Bid Loan, the
period commencing on the date of such Competitive Bid Loan and ending on the
date requested in the Competitive Bid Request with respect thereto, which shall
not be earlier than 3 days after the date of such Competitive Bid Loan or later
than 180 days after the date of such Competitive Bid Loan; provided that if any
Competitive Interest Period would end on a day other than a Domestic Business
Day, such Interest Period shall be extended to the next succeeding Domestic
Business Day, unless such next succeeding Domestic Business Day would be a date
on or after the Commitment Termination Date, in which case such Competitive
Interest Period shall end on the next preceding Domestic Business Day. Interest
shall accrue from and including the first day of a Competitive Interest Period
to but excluding the last day of such Competitive Interest Period.
"Consolidated": the Company and the Subsidiaries on a consolidated
basis in accordance with GAAP.
"Contingent Obligation": as to any Person (the "secondary obligor"),
any obligation of such secondary obligor (a) guaranteeing or in effect
guaranteeing any return on any investment made by another Person, or (b)
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of such secondary obligor, whether contingent, (i) to purchase any
such primary obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the beneficiary of any such primary obligation of
the ability of the primary obligor to make payment of such primary obligation,
(iv) otherwise to assure or hold harmless the beneficiary of such primary
obligation against loss in respect thereof, and (v) in respect of the
Indebtedness of any partnership in which such secondary obligor is a general
partner, except to the extent that such Indebtedness of such partnership is
nonrecourse to such secondary obligor and its separate Property; provided that
the term "Contingent Obligation" shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business.
"Control Person": defined in Section 3.6.
"Convert", "Conversion" and "Converted": each, a reference to a
conversion pursuant to Section 3.3 of one Type of Revolving Credit Loan into
another Type of Revolving Credit Loan.
"Credit Exposure": with respect to any Lender at any time, the sum at
such time of (a) the sum of the outstanding principal balance of such Lender's
Revolving Credit Loans and Competitive Bid Loans, (b) the Swing Line Exposure of
such Lender and (c) the Letter of Credit Exposure of such Lender.
"Credit Parties": the Company, the Borrowers and the Guarantors; each a
"Credit Party".
"CVS": CVS Corporation, a Delaware corporation.
"Default": any of the events specified in Section 9.1, whether any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Disposition": with respect to any Person, any sale, assignment,
transfer or other disposition by such Person by any means, of:
(a) the Stock of, or other equity interests of, any other Person,
(b) any business, operating entity, division or segment thereof, or
(c) any other Property of such Person, other than sales of inventory
(other than in connection with bulk transfers);
provided, however, that the term "Disposition" shall not include a sale,
assignment, transfer or other disposition by a Subsidiary to any other
Subsidiary, provided that the same does not materially and adversely affect the
interests of the Lenders under the Loan Documents.
"Dollar or "$": lawful currency of the United States of America.
"Domestic Business Day": any day (other than a Saturday, Sunday or
legal holiday in the State of New York) on which banks are open for business in
New York City.
"EBITDA": earnings from operations of the Company and its Subsidiaries
on a Consolidated basis for the immediately preceding four fiscal quarter
period, plus the sum of, without duplication, (i) interest expense, (ii)
provision for income taxes and (iii) depreciation and amortization for such
period, each to the extent deducted from such earnings for such period. EBITDA
shall be adjusted to exclude nonrecurring gains and losses.
"Effective Date": defined in Section 12.20.
"Employee Benefit Plan": an employee benefit plan, within the meaning
of Section 3(3) of ERISA, maintained, sponsored or contributed to by the Company
, any Subsidiary or any ERISA Affiliate.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
ERISA, the PBGC or a provision of the Internal Revenue Code pertaining to
employee benefit plans, any Person that is a member of any group of
organizations within the meaning of Sections 414(b) or (c) of the Internal
Revenue Code or, solely with respect to the applicable provisions of the
Internal Revenue Code, Sections 414(m) or (o) of the Internal Revenue Code, of
which the Company or any Subsidiary is a member.
"Eurodollar Advance": a portion of the Revolving Credit Loans selected
by a Borrower to bear interest during a Eurodollar Interest Period selected by
such Borrower at a rate per annum based upon a Eurodollar Rate determined with
reference to such Interest Period, all pursuant to and in accordance with
Section 2.1 or 3.3.
"Eurodollar Business Day": any Domestic Business Day, other than a
Domestic Business Day on which banks are not open for dealings in Dollar
deposits in the interbank eurodollar market.
"Eurodollar Interest Period": the period commencing on any Eurodollar
Business Day selected by a Borrower in accordance with Section 2.1 or Section
3.3 and ending one, two, three or six months thereafter, as selected by such
Borrower in accordance with either such Sections, subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Eurodollar Business Day, such Interest Period shall be extended to the
immediately succeeding Eurodollar Business Day unless the result of such
extension would be to carry the end of such Interest Period into another
calendar month, in which event such Interest Period shall end on the Eurodollar
Business Day immediately preceding such day; and
(ii) if any Interest Period shall begin 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),
such Interest Period shall end on the last Eurodollar Business Day of such
latter calendar month.
"Eurodollar Rate": with respect to each Eurodollar Advance and as
determined by the Agent, the rate of interest per annum (rounded, if necessary,
to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, then to the
next higher 1/100 of 1%) equal to a fraction, the numerator of which is the rate
per annum quoted by BNY at approximately 11:00 A.M. (or as soon thereafter as
practicable) two Eurodollar Business Days prior to the first day of such
Interest Period to leading banks in the interbank eurodollar market as the rate
at which BNY is offering Dollar deposits in an amount approximately equal to its
Commitment Percentage of such Eurodollar Advance and having a period to maturity
approximately equal to the Interest Period applicable to such Eurodollar
Advance, and the denominator of which is an amount equal to 1.00 minus the
aggregate of the then stated maximum rates during such Interest Period of all
reserve requirements (including marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States money center banks are subject, in respect of eurocurrency
liabilities.
"Event of Default": any of the events specified in Section 9.1,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition has been satisfied.
"Expiration Date": the first date, occurring after the Commitments
shall have terminated or been terminated in accordance herewith, upon which
there shall be no Loans or Letters of Credit outstanding.
"Facility Fee": defined in Section 3.11.
"Federal Funds Effective Rate": for any period, a fluctuating interest
rate per annum equal for each day during such period 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 Domestic Business Day, for the next preceding Domestic
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Domestic Business Day, the average (rounded,
if necessary, to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fees": defined in Section 3.2.
"Financial Statements": defined in Section 4.13.
"Fixed Charge Coverage Ratio: at any time of determination, the ratio
of (i) the sum of EBITDA and Rental Expense to (ii) the sum of Interest Expense
and Rental Expense.
"Free Cash Flow": at any time of determination, EBITDA for the
immediately preceding fiscal year less the sum, without duplication, of
Consolidated capital expenditures, Consolidated interest expense, Consolidated
income taxes, permanent payments and prepayments of Consolidated Indebtedness
(excluding payments and prepayments of the Loans and Indebtedness under
revolving credit, line of credit or similar facilities which may be reborrowed)
and the net increase (if positive) in Consolidated working capital, in each case
for such immediately preceding fiscal year, all as determined in accordance with
GAAP.
"GAAP": generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination, consistently
applied.
"Governmental Authority": any foreign, federal, state, municipal or
other government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"Guaranties": collectively, the Company Guaranty and the Subsidiary
Guaranty; individually, a "Guaranty".
"Guarantor": at any time, the Company and the Subsidiaries party to the
Subsidiary Guaranty at such time.
"Highest Lawful Rate": the maximum rate of interest, if any, which at
any time or from time to time may be contracted for, taken, charged or received
on the Loans or the Notes or which may be owing to any Lender pursuant to this
Agreement under the laws applicable to such Lender and this Agreement.
"Increase Supplement": defined in Section 2.13.
"Indebtedness": as to any Person at a particular time, all items of
such Person which constitute, without duplication, (a) indebtedness for borrowed
money or the deferred purchase price of Property (other than trade payables and
accrued expenses incurred in the ordinary course of business), (b) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (c) obligations
with respect to any conditional sale or other title retention agreement, (d)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit (excluding for purposes of Section 7.10(b)
letters of credit obtained in the ordinary course of business by the Company or
any Subsidiary) issued for the account of such Person and, without duplication,
all drafts drawn thereunder to the extent such Person shall not have reimbursed
the issuer in respect of the issuer's payment of such drafts, (e) all
liabilities secured by any Lien on any Property owned by such Person even though
such Person shall not have assumed or otherwise become liable for the payment
thereof (other than carriers', warehousemen's, mechanics', repairmen's or other
like non-consensual Liens arising in the ordinary course of business), (f) that
portion of any obligation of such Person, as lessee, which in accordance with
GAAP is required to be capitalized on a balance sheet of such Person, and (g)
Contingent Obligations (excluding for purposes of Sections 7.10(b) Contingent
Obligations in respect of any indebtedness, obligation or liability other than
those described in items (a) - (f) above); provided that, for purposes of this
definition, Indebtedness shall not include Intercompany Debt and obligations in
respect of interest rate caps, collars, exchanges, swaps or other, similar
agreements.
"Indemnified Liabilities": defined in Section 12.5.
"Intercompany Debt": (i) Indebtedness of the Company to one or more of
the Subsidiaries and (ii) demand Indebtedness of one or more of the Subsidiaries
to the Company or any one or more of the other Subsidiaries.
"Interest Expense": the sum of all interest (adjusted to give effect to
all interest rate swap, cap or other similar interest rate hedging arrangements,
all as determined in accordance with GAAP) paid or accrued in respect of
Consolidated Indebtedness for the immediately preceding four fiscal quarter
period, determined in accordance with GAAP.
"Interest Payment Date": (i) as to any ABR Advance, the last day of
each March, June, September and December, commencing on the first of such days
to occur after such ABR Advance is made or any Eurodollar Advance is converted
to an ABR Advance, (ii) as to any Swing Line Loan, the day on which the
outstanding principal balance of such Swing Line Loan shall become due and
payable in accordance with Section 2.2(a), (iii) as to any Eurodollar Advance in
respect of which a Borrower has selected an Interest Period of one, two or three
months, the last day of such Interest Period, (iv) as to any Competitive Bid
Loan in respect of which the Borrower has selected a Competitive Interest Period
of 90 days or less, the last day of such Interest Period and (v) as to any
Eurodollar Advance or Competitive Bid Loan in respect of which a Borrower has
selected an Interest Period greater than three months or 90 days, as the case
may be, the last day of the third month or the 90th day, as the case may be, of
such Interest Period and the last day of such Interest Period.
"Interest Period": a Eurodollar Interest Period, a Swing Line Interest
Period or a Competitive Interest Period, as the case may be.
"Internal Revenue Code": the Internal Revenue Internal Revenue Code of
1986, as amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Investments": defined in Section 8.12.
"Invitation to Bid": an invitation by the Agent to the Lenders to make
Competitive Bids in the form of Exhibit K.
"Issuer": BNY.
"Lender": defined in the preamble; such term to also include the Swing
Line Lender and the Issuer where the context hereof requires or permits such
inclusion.
"Letter of Credit": defined in Section 2.8, provided that each of the
letters of credit listed on Schedule 1.1L shall constitute a Letter of Credit
for the purposes of this Agreement.
"Letter of Credit Commitment": the commitment of the Issuer to issue
Letters of Credit in an aggregate face amount not in excess of $25,000,000
pursuant to Section 2.8.
"Letter of Credit Exposure": at any time, (a) in respect of all
Lenders, the sum, without duplication, of (i) the maximum aggregate amount which
may be drawn under all unexpired Letters of Credit at such time (whether the
conditions for drawing thereunder have or may be satisfied), (ii) the aggregate
amount, at such time, of all unpaid drafts (which have not been dishonored)
drawn under all Letters of Credit, and (iii) the aggregate unpaid Reimbursement
Obligations at such time, and (b) in respect of any Lender, an amount equal to
such Lender's Commitment Percentage at such time multiplied by the amount
determined under clause (a) of this definition.
"Letter of Credit Participation": with respect to each Lender, its
obligations to the Issuer under Section 2.9.
"Letter of Credit Participation Fee": defined in Section 3.12.
"Letter of Credit Request": a request in the form of Exhibit C.
"Leverage Ratio": at any time of determination, the ratio of (i) the
sum of Consolidated Indebtedness and eight times Minimum Rentals to (ii) the sum
of EBITDA plus Rental Expense.
"Lien": any mortgage, pledge, hypothecation, assignment, lien, deposit
arrangement, charge, encumbrance or other security arrangement or security
interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement and
any financing lease having substantially the same economic effect as any of the
foregoing.
"Loan": a Revolving Credit Loan, a Swing Line Loan or a Competitive Bid
Loan , as the case may be.
"Loan Documents": this Agreement, the Subsidiary Guaranty and, upon the
execution and delivery thereof, any Notes executed and delivered pursuant to
Section 2.12.
"Loans": the Revolving Credit Loans, the Swing Line Loans and the
Competitive Bid Loans.
"Mandatory Borrowing": defined in Section 2.2(b).
"Margin Stock": any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.
"Material Adverse": with respect to any change or effect, a material
adverse change in, or effect on, as the case may be, (i) the financial
condition, operations, business, or Property of the Company and the Subsidiaries
taken as a whole, (ii) the ability of any Credit Party to perform its
obligations under any Loan Document to which it is a party, or (iii) the ability
of the Agent or any Lender to enforce the Loan Documents.
"Minimum Rental": Consolidated minimum rentals (determined in the same
manner as set forth in the notes to the Financial Statements) excluding up to
$5,000,000 of Consolidated equipment rentals for the immediately preceding
fiscal year.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer plan
defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": with respect to a Swing Line Loan, the rate per
annum agreed to in writing by the Borrower requesting such Swing Line Loan and
the Swing Line Lender as the interest rate which such Swing Line Loan shall
bear.
"Net Worth": at any date of determination, the sum of all amounts which
would be included under shareholders' equity on a Consolidated balance sheet of
the Company and its Subsidiaries determined in accordance with GAAP as at such
date.
"Obligations": defined in Section 11.1.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to
the functions thereof.
"Pension Plan": at any time, any Employee Benefit Plan (including a
Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the
Internal Revenue Code, the funding requirements of which are, or at any time
within the six years immediately preceding the time in question, were in whole
or in part, the responsibility of the Company, any Subsidiary or an ERISA
Affiliate.
"Person": any individual, firm, partnership, limited liability company,
limited liability partnership, joint venture, corporation, association, business
trust, joint stock company, unincorporated association, trust, Governmental
Authority or any other entity, whether acting in an individual, fiduciary, or
other capacity, and for the purpose of the definition of "ERISA Affiliate", a
trade or business.
"Pricing Level I": any time when the Fixed Charge Coverage Ratio is
greater than or equal to 2.20:1.00.
"Pricing Level II": any time when (i) the Fixed Charge Coverage Ratio
is greater than or equal to 2.00:1.00 and (ii) Pricing Level I does not apply.
"Pricing Level III": any time when (i) the Fixed Charge Coverage Ratio
is greater than or equal to 1.80:1.00 and (ii) neither Pricing Level I nor
Pricing Level II applies.
"Pricing Level IV": any time when (i) the Fixed Charge Coverage Ratio
is greater than or equal to 1.60:1.00 and (ii) none of Pricing Level I, Pricing
Level II or Pricing Level III applies.
"Pricing Level V": any time when (i) the Fixed Charge Coverage Ratio is
less than 1.60:1.00 and (ii) none of Pricing Level I, Pricing Level II, Pricing
Level III or Pricing Level IV applies.
"Principal Office": from time to time, the principal office of BNY,
located on the date hereof in New York, New York.
"Prior Credit Agreement": defined in the preamble.
"Prohibited Transaction": a transaction that is prohibited under
Section 4975 of the Internal Revenue Code or Section 406 of ERISA and not exempt
under Section 4975 of the Internal Revenue Code or Section 408 of ERISA.
"Property": in respect of any Person, all types of real, personal or
mixed property and all types of tangible or intangible property owned or leased
by such Person.
"Regulatory Change": (a) the introduction or phasing in of any law,
rule or regulation after the date hereof, (b) the issuance or promulgation after
the date hereof of any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether having the force of
law), or (c) any change after the date hereof in the interpretation of any
existing law, rule, regulation, directive, guideline or request by any central
bank or United States or foreign Governmental Authority charged with the
administration thereof, in each case applicable to the transactions contemplated
by this Agreement.
"Reimbursement Obligations": all obligations and liabilities of the
Borrowers due and to become due hereunder in respect of Letters of Credit.
"Rental Expense": the sum of all rental expense (determined in the same
manner as set forth in the notes to the Financial Statements) of the Company and
its Subsidiaries on a Consolidated basis for the immediately preceding four
fiscal quarter period, determined in accordance with GAAP.
"Reportable Event": with respect to any Pension Plan, (a) any event set
forth in Sections 4043(b) (other than a Reportable Event as to which the 30 day
notice requirement is waived by the PBGC under applicable regulations), 4062(e)
or 4063(a) of ERISA, or the regulations thereunder, (b) an event requiring the
Company, any Subsidiary or any ERISA Affiliate to provide security to a Pension
Plan under Section 401(a)(29) of the Internal Revenue Code, or (c) the failure
to make any payment required by Section 412(m) of the Internal Revenue Code.
"Required Lenders": at any time prior to the Commitment Termination
Date or such earlier date as all of the Commitments shall have terminated or
been terminated in accordance herewith, Lenders having Commitment Amounts equal
to or more than 51% of the Aggregate Commitment Amount, and at all other times,
Lenders having Credit Exposures equal to or more than 51% of the Aggregate
Credit Exposure.
"Restricted Payment": with respect to any Person, any of the following,
whether direct or indirect: (a) the declaration or payment by such Person of any
dividend or distribution on any class of Stock of such Person, other than a
dividend payable solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any distribution on any
other type or class of equity interest or equity investment in such Person, and
(c) any redemption, retirement, purchase or acquisition of, or sinking fund or
other similar payment in respect of, any class of Stock of, or other type or
class of equity interest or equity investment in, such Person.
"Revolving Credit Loan" and "Revolving Credit Loans": defined in
Section 2.1(a).
"S&P": Standard & Poor's Ratings Services, a division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or any successor thereto.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (i) the fair value of the Property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's Property would constitute an unreasonably small amount of
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account
probable payments by co-obligors.
"Special Counsel": ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP.
"Stock": any and all shares, interests, participations or other
equivalents (however designated) of corporate stock.
"Subsidiary": at any time and from time to time, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which the Company and/or any Subsidiary of the Company,
directly or indirectly at such time, either (a) in respect of a corporation,
owns or controls more than 50% of the outstanding stock having ordinary voting
power to elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, limited liability company, joint venture or other business entity,
is entitled to share in more than 50% of the profits and losses, however
determined.
"Subsidiary Borrowers": collectively, wholly-owned Subsidiaries of the
Company which are signatories hereto on the Effective Date and each other
Subsidiary of the Company which becomes a party to this Agreement by the
execution of a Borrower Addendum pursuant to Section 2.11; each a "Subsidiary
Borrower".
"Subsidiary Guarantors": collectively, each Subsidiary of the Company
in existence on the Effective Date and each other Subsidiary which becomes a
party to the Subsidiary Guaranty by the execution of a Subsidiary Guaranty
Addendum; each a "Subsidiary Guarantor".
"Subsidiary Guaranty": the guaranty of each Subsidiary in the form of
Exhibit I.
"Subsidiary Guaranty Addendum": an addendum in the form of Annex B to
the Subsidiary Guaranty pursuant to which a new Subsidiary shall become a party
to the Subsidiary Guaranty as required by Section 8.11.
"Swing Line Commitment": the commitment of the Swing Line Lender to
make Swing Line Loans in accordance with the terms hereof, in an aggregate
outstanding principal amount not exceeding at any time $15,000,000, as the same
may be reduced pursuant to Section 2.6.
"Swing Line Commitment Period": the period from the Effective Date to,
but excluding, the Swing Line Termination Date.
"Swing Line Exposure": at any time, in respect of any Lender, an amount
equal to the aggregate principal balance of Swing Line Loans at such time
multiplied by such Lender's Commitment Percentage at such time.
"Swing Line Interest Period": as to any Swing Line Loan, the period
commencing on the date of such Swing Line Loan and ending on the date set forth
by the Borrower requesting such Swing Line Loan in the Borrowing Request with
respect thereto; provided that the last day of any Swing Line Interest Period
shall not be earlier than one day after the date of such Swing Line Loan or
later than 7 days after the date of such Swing Line Loan and in no event later
than the Swing Line Termination Date; and provided further that if any Swing
Line Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day.
"Swing Line Lender": BNY.
"Swing Line Loan" and "Swing Line Loans": defined in Section 2.2(a).
"Swing Line Maturity Date": defined in Section 2.2(a).
"Swing Line Participation Amount": defined in Section 2.2(c).
"Swing Line Termination Date": the date which is 10 days prior to the
Commitment Termination Date.
"Tangible Net Worth": at any time of determination, Net Worth less all
assets of the Company and its Subsidiaries included in such Net Worth,
determined on a Consolidated basis at such date, that would be classified as
intangible assets in accordance with GAAP.
"Termination Event": with respect to any Pension Plan, (a) a Reportable
Event, (b) the termination of a Pension Plan under Section 4041(c) of ERISA, or
the filing of a notice of intent to terminate a Pension Plan under Section
4041(c) of ERISA, or the treatment of a Pension Plan amendment as a termination
under Section 4041(e) of ERISA (except an amendment made after such Pension Plan
satisfies the requirement for a standard termination under Section 4041(b) of
ERISA), (c) the institution of proceedings by the PBGC to terminate a Pension
Plan under Section 4042 of ERISA, or (d) the appointment of a trustee to
administer any Pension Plan under Section 4042 of ERISA.
"Type": with respect to any Revolving Credit Loan, the characteristic
of such Loan as an ABR Advance or a Eurodollar Advance, each of which
constitutes a Type of Revolving Credit Loan.
"Unqualified Amount": defined in Section 3.4(c).
"Upstream Dividends": defined in Section 8.7.
1.2. Principles of Construction
(a) All capitalized terms defined in this Agreement shall have
the meanings given such capitalized terms herein when used in the other Loan
Documents or in any certificate, opinion or other document made or delivered
pursuant hereto or thereto, unless otherwise expressly provided therein.
(b) Unless otherwise expressly provided herein, the word
"fiscal" when used herein shall refer to the relevant fiscal period of the
Company. As used in the Loan Documents and in any certificate, opinion or other
document made or delivered pursuant thereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in each Loan Document shall refer to such Loan Document
as a whole and not to any particular provision of such Loan Document, and
Section, schedule and exhibit references contained therein shall refer to
Sections thereof or schedules or exhibits thereto unless otherwise expressly
provided therein.
(d) All references herein to a time of day shall mean the then
applicable time in New York, New York, unless otherwise expressly provided
herein.
(e) Section headings have been inserted in the Loan Documents
for convenience only and shall not be construed to be a part thereof. Unless the
context otherwise requires, words in the singular number include the plural, and
words in the plural include the singular.
(f) Whenever in any Loan Document or in any certificate or
other document made or delivered pursuant thereto, the terms thereof require
that a Person sign or execute the same or refer to the same as having been so
signed or executed, such terms shall mean that the same shall be, or was, duly
signed or executed by an Authorized Signatory of such Person.
(g) The words "include" and "including", when used in each
Loan Document, shall mean that the same shall be included "without limitation",
unless otherwise specifically provided.
(h) Certain provisions hereof concerning Credit Parties are
incorporated by reference into other Loan Documents as if fully set forth
therein.
2. AMOUNT AND TERMS OF LOANS
2.1. Revolving Credit Loans
(a) Subject to the terms and conditions hereof, each Lender
severally (and not jointly) agrees to make loans under this Agreement (each a
"Revolving Credit Loan" and, collectively with each other Revolving Credit Loan
of such Lender and/or with each Revolving Credit Loan of each other Lender, the
"Revolving Credit Loans") to one or more Borrowers from time to time during the
Commitment Period, during which period the Borrowers may borrow, prepay and
reborrow in accordance with the provisions hereof. Immediately after making each
Revolving Credit Loan and after giving effect to all Swing Line Loans and
Competitive Bid Loans repaid and all Reimbursement Obligations paid on the same
date, the Aggregate Credit Exposure will not exceed the Aggregate Commitment
Amount. With respect to each Lender, at the time of the making of any Revolving
Credit Loan and after giving effect thereto, such Lender's Credit Exposure will
not exceed the Commitment of such Lender at such time. During the Commitment
Period, each Borrower may borrow, prepay in whole or in part and reborrow
Revolving Credit Loans under the Commitments, all in accordance with the terms
and conditions hereof. At the option of a Borrower, indicated in its Borrowing
Request, Revolving Credit Loans may be made as ABR Advances or Eurodollar
Advances.
(b) The aggregate outstanding principal balance of all
Revolving Credit Loans shall be due and payable on the Commitment Termination
Date or on such earlier date upon which all of the Commitments shall have been
voluntarily terminated by the Borrower in accordance with Section 2.6.
2.2. Swing Line Loans
(a) Subject to the terms and conditions hereof, the Swing Line
Lender agrees to make loans under this Agreement (each a "Swing Line Loan" and,
collectively, the "Swing Line Loans") to one or more Borrowers from time to time
during the Swing Line Commitment Period. Swing Line Loans (i) may be repaid and
reborrowed in accordance with the provisions hereof, (ii) shall not, immediately
after giving effect thereto, result in the Aggregate Credit Exposure exceeding
the Aggregate Commitment Amount, and (iii) shall not, immediately after giving
effect thereto, result in the aggregate outstanding principal balance of all
Swing Line Loans exceeding the Swing Line Commitment. The Swing Line Lender
shall not be obligated to make any Swing Line Loan at a time when any Lender
shall be in default of its obligations under this Agreement unless the Swing
Line Lender has entered into arrangements satisfactory to it and the Company to
eliminate the Swing Line Lender's risk with respect to such defaulting Lender's
participation in such Swing Line Loan. The Swing Line Lender will not make a
Swing Line Loan if the Agent, or any Lender by notice to the Swing Line Lender,
the Company and the applicable Borrower no later than one Business Day prior to
the Borrowing Date with respect to such Swing Line Loan, shall have determined
that the conditions set forth in Sections 5 and 6 have not been satisfied and
such conditions remain unsatisfied as of the requested time of the making such
Loan. Each Swing Line Loan shall be due and payable on the day (the "Swing Line
Maturity Date") being the earliest of the last day of the Swing Line Interest
Period applicable thereto, the date on which the Swing Line Commitment shall
have been voluntarily terminated in accordance with Section 2.6, and the date on
which the Loans shall become due and payable pursuant to the provisions hereof,
whether by acceleration or otherwise. Each Swing Line Loan shall bear interest
at the Negotiated Rate applicable thereto. The Swing Line Lender shall disburse
the proceeds of Swing Line Loans at its office designated in Section 12.2 by
crediting such proceeds to an account of the Borrower thereof maintained with
the Swing Line Lender or as such Borrower shall otherwise direct in its
Borrowing Request therefor.
(b) On any Business Day on which a Swing Line Loan shall be
due and payable and shall remain unpaid, the Swing Line Lender may, in its sole
discretion, give notice to the Lenders and the applicable Borrower that such
outstanding Swing Line Loan shall be funded with a borrowing of Revolving Credit
Loans (provided that such notice shall be deemed to have been automatically
given upon the occurrence of a Default or an Event of Default under Sections
9.1(h) or (i)), in which case a borrowing of Revolving Credit Loans made as ABR
Advances to such Borrower (each such borrowing, a "Mandatory Borrowing"), shall
be made by all Lenders pro rata based on each such Lender's Commitment
Percentage on the Business Day immediately succeeding the giving of such notice.
The proceeds of each Mandatory Borrowing shall be remitted directly to the Swing
Line Lender to repay such outstanding Swing Line Loan. Each Lender irrevocably
agrees to make a Revolving Credit Loan pursuant to each Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the date
specified in writing by the Swing Line Lender notwithstanding: (i) the amount of
such Mandatory Borrowing may not comply with the minimum amount for Loans
otherwise required hereunder, (ii) whether any condition specified in Section 6
is then unsatisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the Borrowing Date of such Mandatory Borrowing, (v) the aggregate principal
amount of all Loans then outstanding, (vi) the Aggregate Credit Exposure at such
time and (vii) the amount of the Commitments at such time.
(c) Upon each receipt by a Lender of notice of an Event of
Default from the Agent pursuant to Section 10.5, such Lender shall purchase
unconditionally, irrevocably, and severally (and not jointly) from the Swing
Line Lender a participation in the outstanding Swing Line Loans (including
accrued interest thereon) in an amount equal to the product of its Commitment
Percentage and the outstanding balance of the Swing Line Loans (each, a "Swing
Line Participation Amount"). Each Lender shall also be liable for an amount
equal to the product of its Commitment Percentage and any amounts paid by a
Borrower pursuant to this Section that are subsequently rescinded or avoided, or
must otherwise be restored or returned. Such liabilities shall be unconditional
and without regard to the occurrence of any Default or Event of Default or the
compliance by any Borrower with any of its obligations under the Loan Documents.
(d) In furtherance of Section 2.2(c), upon each receipt by a
Lender of notice of an Event of Default from the Agent pursuant to Section 10.5,
such Lender shall promptly make available to the Agent for the account of the
Swing Line Lender its Swing Line Participation Amount at the office of the Agent
specified in Section 12.2, in lawful money of the United States and in
immediately available funds. The Agent shall deliver the payments made by each
Lender pursuant to the immediately preceding sentence to the Swing Line Lender
promptly upon receipt thereof in like funds as received. Each Lender hereby
indemnifies and agrees to hold harmless the Agent and the Swing Line Lender from
and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, costs and expenses resulting
from any failure on the part of such Lender to pay, or from any delay in paying
the Agent any amount such Lender is required by notice from the Agent to pay in
accordance with this Section upon receipt of notice of an Event of Default from
the Agent pursuant to Section 10.5 (except in respect of losses, liabilities or
other obligations suffered by the Agent or the Swing Line Lender, as the case
may be, resulting from the gross negligence or willful misconduct of the Agent
or the Swing Line Lender, as the case may be), and such Lender shall pay
interest to the Agent for the account of the Swing Line Lender from the date
such amount was due until paid in full, on the unpaid portion thereof, at a rate
of interest per annum, whether before or after judgment, equal to (i) from the
date such amount was due until the third day therefrom, the Federal Funds
Effective Rate, and (ii) thereafter, the Federal Funds Effective Rate plus 2%,
payable upon demand by the Swing Line Lender. The Agent shall distribute such
interest payments to the Swing Line Lender upon receipt thereof in like funds as
received.
(e) Whenever the Agent is reimbursed by a Borrower for the
account of the Swing Line Lender for any payment in connection with Swing Line
Loans made to such Borrower and such payment relates to an amount previously
paid by a Lender pursuant to this Section, the Agent will promptly remit such
payment to such Lender.
2.3. Notice of Borrowing-Revolving Credit Loans and Swing Line Loans
Whenever a Borrower desires to borrow Revolving Credit Loans
or Swing Line Loans hereunder (excluding Mandatory Loans), the Company on behalf
of such Borrower agrees to notify the Agent (and with respect to a Swing Line
Loan, the Swing Line Lender), which notification shall be irrevocable, no later
than (a) 12:00 Noon on the proposed Borrowing Date in the case of Swing Line
Loans, (b) 10:00 A.M. on the proposed Borrowing Date in the case of Revolving
Credit Loans to consist of ABR Advances and (c) 9:00 A.M. at least two
Eurodollar Business Days prior to the proposed Borrowing Date in the case of
Revolving Credit Loans to consist of Eurodollar Advances. Each such notice shall
specify (i) the aggregate amount requested to be borrowed under the Commitments
or the Swing Line Commitment, (ii) the proposed Borrowing Date, (iii) whether a
borrowing of Revolving Credit Loans is to be of ABR Advances or Eurodollar
Advances, and the amount of each thereof (iv) the Interest Period for such
Eurodollar Advances and (v) the Swing Line Interest Period for, and the amount
of, each Swing Line Loan. Each such notice shall be promptly confirmed by
delivery to the Agent (and, with respect to a Swing Line Loan, the Swing Line
Lender) of a Borrowing Request. Each Eurodollar Advance to be made on a
Borrowing Date, when aggregated with all amounts to be Converted to Eurodollar
Advances on such date and having the same Interest Period as such Eurodollar
Advance, shall equal no less than $1,000,000, or an integral multiple of
$1,000,000 in excess thereof, (ii) each ABR Advance made on each Borrowing Date
shall equal no less than $500,000 or an integral multiple of $100,000 in excess
thereof and (iii) each Swing Line Loan made on each Borrowing Date shall equal
no less than $500,000 or an integral multiple of $100,000 in excess thereof. The
Agent shall promptly notify each Lender (by telephone or otherwise, such
notification to be confirmed by fax or other writing) of each such Borrowing
Request. Subject to its receipt of each such notice from the Agent and subject
to the terms and conditions hereof, (A) each Lender shall make immediately
available funds available to the Agent at the address therefor set forth in
Section 12.2 not later than 1:00 P.M. on each Borrowing Date in an amount equal
to such Lender's Commitment Percentage of the Revolving Credit Loans requested
on such Borrowing Date and/or (B) the Swing Line Lender shall make immediately
available funds available to the Borrower requesting the Swing Line Loan on such
Borrowing Date in an amount equal to the Swing Line Loan requested by such
Borrower.
2.4. Competitive Bid Loans and Procedure
(a) Subject to the terms and conditions hereof, the Company on
behalf of any Borrower may request competitive bid loans under this Agreement
(each a "Competitive Bid Loan") during the Commitment Period. In order for the
Company on behalf of any Borrower to request Competitive Bids, the Company on
behalf of such Borrower shall deliver by hand or fax to the Agent a duly
completed Competitive Bid Request not later than 12:00 noon, one Domestic
Business Day before the proposed Borrowing Date therefor. A Competitive Bid
Request that does not conform substantially to the format of Exhibit J may be
rejected by the Agent in the Agent's reasonable discretion, and the Agent shall
promptly notify the Company of such rejection by fax and telephone. Each
Competitive Bid Request shall specify (x) the applicable Borrower, (y) the
proposed Borrowing Date for the Competitive Bid Loans then being requested
(which shall be a Domestic Business Day) and the aggregate principal amount
thereof and (z) the Competitive Interest Period or Interest Periods (which shall
not exceed ten different Interest Periods in a single Competitive Bid Request),
with respect thereto (which may not end after the Domestic Business Day
immediately preceding the Commitment Termination Date). Promptly after its
receipt of each Competitive Bid Request that is not rejected as aforesaid, the
Agent shall invite by fax (in the form of Exhibit K) the Lenders to bid, on the
terms and conditions of this Agreement, to make Competitive Bid Loans pursuant
to such Competitive Bid Request. The aggregate outstanding principal amount of
all Competitive Bid Loans outstanding at any time shall not exceed the
Competitive Bid Maximum Amount.
(b) Each Lender, in its sole and absolute discretion, may make
one or more Competitive Bids to the applicable Borrower responsive to a
Competitive Bid Request. Each Competitive Bid by a Lender must be received by
the Agent not later than 10:00 A.M. on the proposed Borrowing Date for the
relevant Competitive Bid Loan. Multiple bids will be accepted by the Agent. Bids
to make Competitive Bid Loans that do not conform substantially to the format of
Exhibit L may be rejected by the Agent after conferring with, and upon the
instruction of, the Company on behalf of the applicable Borrower, and the Agent
shall notify the Lender making such non conforming bid of such rejection as soon
as practicable. Each Competitive Bid shall be irrevocable and shall specify (w)
the applicable Borrower, (x) the principal amount (which (1) shall be in a
minimum principal amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, and (2) may equal the entire principal amount requested by a
Borrower) of the Competitive Bid Loan or Competitive Bid Loans that the Lender
is willing to make to such Borrower, (y) the Competitive Bid Rate or Rates at
which the Lender is prepared to make such Competitive Bid Loan or Competitive
Bid Loans, and (z) the Competitive Interest Period with respect to each such
Competitive Bid Loan and the last day thereof. If any Lender shall elect not to
make a Competitive Bid, such Lender shall so notify the Agent by fax not later
than 10:00 A.M. on the proposed Borrowing Date therefor, provided that the
failure by any Lender to give any such notice shall not obligate such Lender to
make any Competitive Bid Loan in connection with the relevant Competitive Bid
Request.
(c) With respect to each Competitive Bid Request, the Agent
shall (i) notify the Company by fax by 11:00 A.M. on the proposed Borrowing Date
with respect thereto of each Competitive Bid made, the Competitive Bid Rate
applicable thereto and the identity of the Lender that made such Competitive
Bid, and (ii) send a list of all Competitive Bids to the Company for its records
as soon as practicable after completion of the bidding process. Each notice and
list sent by the Agent pursuant to this Section 2.4(c) shall list the
Competitive Bids in ascending yield order.
(d) The Company on behalf of the applicable Borrower may in
its sole and absolute discretion, subject only to the provisions of this Section
2.4(d), accept or reject any Competitive Bid made in accordance with the
procedures set forth in this Section 2.4, and the Company on behalf of such
Borrower shall notify the Agent by telephone, confirmed by fax in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has decided
to accept or reject any or all of such Competitive Bids not later than 12:00
Noon on the proposed Borrowing Date therefor, provided that the failure by the
Company to give such notice shall be deemed to be a rejection of all such
Competitive Bids. In connection with each acceptance of one or more Competitive
Bids by the Company on behalf of a Borrower:
(1) the Company shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Company has decided to reject a
Competitive Bid made at a lower Competitive Bid Rate unless the
acceptance of such lower Competitive Bid would subject the applicable
Borrower to any requirement to withhold any taxes or deduct any amount
from any amounts payable under the Loan Documents, in which case the
Company may reject such lower Competitive Bid,
(2) the aggregate amount of the Competitive Bids accepted by
the Company on behalf of a Borrower shall not exceed the principal
amount specified in the Competitive Bid Request therefor,
(3) if the Company shall desire to accept a Competitive Bid
made at a particular Competitive Bid Rate, it must accept all other
Competitive Bids at such Competitive Bid Rate, except for any such
Competitive Bid the acceptance of which would subject the applicable
Borrower to any requirement to withhold any taxes or deduct any amount
from any amounts payable under the Loan Documents, provided that if the
acceptance of all such other Competitive Bids would cause the aggregate
amount of all such accepted Competitive Bids to exceed the amount
requested, then such acceptance shall be made pro rata in accordance
with the amount of each such Competitive Bid at such Competitive Bid
Rate,
(4) except pursuant to clause (3) above, no Competitive Bid
shall be accepted unless the Competitive Bid Loan with respect thereto
shall be in a minimum principal amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, and
(5) no Competitive Bid shall be accepted and no Competitive
Bid Loan shall be made, if immediately after giving effect thereto, the
Aggregate Credit Exposure would exceed the Aggregate Commitment Amount
or the Competitive Bid Maximum Amount.
(e) The Agent shall promptly fax to each bidding Lender (with
a copy to the Company) a Competitive Bid Accept/Reject Letter advising such
Lender whether its Competitive Bid has been accepted (and if accepted, in what
amount and at what Competitive Bid Rate), and each successful bidder so notified
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Bid Loan in respect of which each of its Competitive
Bids has been accepted by making immediately available funds available to the
Agent at its address set forth in Section 11.2 not later than 1:00 P.M. on the
Borrowing Date for such Competitive Bid Loan in the amount thereof.
(f) Anything herein to the contrary notwithstanding, if the
Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it
shall submit such bid directly to the Company on behalf of the applicable
Borrower not later than 9:30 A.M. on the relevant proposed Borrowing Date.
(g) All notices required by this Section shall be given in
accordance with Section 12.2.
(h) Each Competitive Bid Loan shall be due and payable on the
last day of the Interest Period applicable thereto or on such earlier date upon
which the Loans shall become due and payable hereunder, whether by acceleration
or otherwise.
2.5. Use of Proceeds
Each Borrower agrees that the proceeds of the Loans and
Letters of Credit shall be used solely for its general corporate purposes not
inconsistent with the provisions hereof. Notwithstanding anything to the
contrary contained in any Loan Document, each Borrower further agrees that no
part of the proceeds of any Loan or Letter of Credit will be used, directly or
indirectly, for a purpose which violates any law, rule or regulation of any
Governmental Authority, including the provisions of Regulations G, U or X of the
Board of Governors of the Federal Reserve System, as amended or any provision of
this Agreement, including, without limitation, the provisions of Section 4.9.
2.6. Termination or Reduction of Commitments
(a) Voluntary Termination or Reductions. At the Company's
option and upon at least three Domestic Business Days' prior irrevocable notice
to the Agent, the Company may (i) terminate the Commitments, the Swing Line
Commitment and the Letter of Credit Commitment, at any time, or (ii) permanently
reduce the Aggregate Commitment Amount, the Swing Line Commitment or the Letter
of Credit Commitment, in part at any time and from time to time, provided that
(1) each such partial reduction shall be in an amount equal to at least (i) in
the case of the Aggregate Commitment Amount, $10,000,000 or an integral multiple
of $1,000,000 in excess thereof, (ii) in the case of the Swing Line Commitment,
$1,000,000, or an integral multiple of $1,000,000 in excess thereof, and (iii)
in the case of the Letter of Credit Commitment, $1,000,000, or an integral
multiple of $1,000,000 in excess thereof, and (2) immediately after giving
effect to each such reduction, (i) the Aggregate Commitment Amount shall equal
or exceed the sum of the aggregate outstanding principal balance of all Loans
and the Letter of Credit Exposure, (ii) the Swing Line Commitment shall equal or
exceed the aggregate outstanding principal balance of all Swing Line Loans and
(iii) the Letter of Credit Commitment shall equal or exceed the Letter of Credit
Exposure of all Lenders.
(b) In General. Each reduction of the Aggregate Commitment
Amount shall be made by reducing each Lender's Commitment Amount by a sum equal
to such Lender's Commitment Percentage of the amount of such reduction.
2.7. Prepayments of Loans
(a) Voluntary Prepayments. Each Borrower may prepay Revolving
Credit Loans and Swing Line Loans, in whole or in part, without premium or
penalty, but subject to Section 3.5 at any time and from time to time, by
notifying the Agent, which notification shall be irrevocable, by 9:00 A.M. at
least two Eurodollar Business Days, in the case of a prepayment of Eurodollar
Advances, or one Domestic Business Day, in the case of a prepayment of ABR
Advances, prior to the proposed prepayment date specifying (i) the Loans to be
prepaid, (ii) the amount to be prepaid, and (iii) the date of prepayment. Upon
receipt of each such notice, the Agent shall promptly notify each Lender
thereof. Each such notice given by a Borrower pursuant to this Section shall be
irrevocable. Each partial prepayment under this Section shall be in a minimum
amount of $1,000,000 ($500,000 in the case of ABR Advances and Swing Line Loans)
or an integral multiple of $1,000,000 ($100,000 in the case of ABR Advances and
Swing Line Loans) in excess thereof. Competitive Bid Loans may be prepaid in the
sole discretion of the Lenders thereof.
(b) Mandatory Prepayments.
(i) For 30 consecutive days during each period
beginning on December 15 and ending on the following February 28, the Borrowers
shall prepay and reduce to less than $35,000,000 the outstanding principal
balance of the Loans.
(ii) Subject to clause (iii) below with respect to
Swing Line Loans, simultaneously with each reduction of the Aggregate
Commitments under Section 2.5, the Borrowers shall prepay the Loans by the
amount, if any, by which the Aggregate Credit Exposure exceeds the amount of the
Aggregate Commitments as so reduced.
(iii) Simultaneously with each reduction of the Swing
Line Commitment under Section 2.6, the Borrowers shall prepay the Swing Line
Loans by the amount, if any, by which the outstanding principal balance of the
Swing Line Loans exceeds the amount of the Swing Line Commitment as so reduced.
(iv) If on any Borrowing Date or Conversion Date, the
Aggregate Credit Exposure shall exceed the Aggregate Commitments, the Borrowers
shall prepay the Loans in an aggregate principal amount such that immediately
after giving effect to the Loans or conversion to be made on such Borrowing Date
or Conversion Date the Aggregate Credit Exposure shall not exceed the Aggregate
Commitments.
(c) In General. Simultaneously with each prepayment hereunder,
the Borrowers shall prepay all accrued interest on the amount prepaid through
the date of prepayment and indemnify the Lenders in accordance with Section 3.5.
2.8. Letter of Credit Sub-facility
(a) Subject to the terms and conditions hereof, the Issuer
agrees, in reliance on the agreement of the other Lenders set forth in Section
2.9, to issue standby and commercial letters of credit (each a "Letter of
Credit" and, collectively, the "Letters of Credit") during the Commitment Period
for the account of a Borrower, provided that immediately after the issuance of
each Letter of Credit (i) the Letter of Credit Exposure of all Lenders shall not
exceed the Letter of Credit Commitment, and (ii) the Aggregate Credit Exposure
would not exceed the Aggregate Commitment Amount. Each Letter of Credit shall
have an expiration date which shall be not later than the earlier to occur of 12
months from the date of issuance thereof or 10 days prior to the Commitment
Termination Date. No Letter of Credit shall be issued if the Agent, or any
Lender by notice to the Agent, the Issuer and the Company no later than 3:00
P.M. one Domestic Business Day prior to the requested date of issuance of such
Letter of Credit, shall have determined that the conditions set forth in
Sections 5 and 6 have not been satisfied and such conditions remain unsatisfied
as of the requested date of issuance of such Letter of Credit.
(b) Each Letter of Credit shall be issued for the account of
the applicable Borrower in support of an obligation of such Borrower in favor of
a beneficiary who has requested the issuance of such Letter of Credit as a
condition to a transaction entered into in connection with such Borrower's
ordinary course of business. The Company on behalf of a Borrower shall give the
Agent a Letter of Credit Request for the issuance of each Letter of Credit by
12:00 Noon at least two Domestic Business Days (or such other period as the
Issuer and the Company may agree) prior to the requested date of issuance. Upon
receipt of such Letter of Credit Request from a Borrower, the Agent shall
promptly notify the Issuer and each other Lender thereof. The Issuer shall, on
the proposed date of issuance and subject to the other terms and conditions of
this Agreement, issue the requested Letter of Credit. Each Letter of Credit
shall be in form and substance reasonably satisfactory to the Issuer, with such
provisions with respect to the conditions under which a drawing may be made
thereunder and the documentation required in respect of such drawing as the
Issuer shall reasonably require. Each Letter of Credit shall be used solely for
the purposes described therein.
(c) Each payment by the Issuer of a draft drawn under a Letter
of Credit shall give rise to the obligation of the applicable Borrower to
immediately reimburse the Issuer for the amount thereof. If all or any portion
of any reimbursement obligation in respect of a Letter of Credit shall not be
paid when due (whether at the stated maturity thereof, by acceleration or
otherwise), such overdue amount shall bear interest, payable upon demand, at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin
applicable to ABR Advances plus 2%, from the date of such nonpayment until paid
in full (whether before or after the entry of a judgment thereon).
2.9. Letter of Credit Participation
(a) Each Lender hereby unconditionally and irrevocably,
severally (and not jointly) takes an undivided participating interest in the
obligations of the Issuer under and in connection with each Letter of Credit in
an amount equal to such Lender's Commitment Percentage of the amount of such
Letter of Credit. Each Lender shall be liable to the Issuer for its Commitment
Percentage of the unreimbursed amount of any draft drawn and honored under each
Letter of Credit. Each Lender shall also be liable for an amount equal to the
product of its Commitment Percentage and any amounts paid by a Borrower pursuant
to Sections 2.8 and 2.10 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be unconditional and
without regard to the occurrence of any Default or Event of Default or the
compliance by any Borrower with any of its obligations under the Loan Documents.
(b) The Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender (which notice shall be promptly confirmed in
writing), of the date and the amount of each draft paid under each Letter of
Credit with respect to which full reimbursement payment shall not have been made
by the applicable Borrower as provided in Section 2.8(c), and forthwith upon
receipt of such notice, such Lender shall promptly make available to the Agent
for the account of the Issuer its Commitment Percentage of the amount of such
unreimbursed draft at the office of the Agent specified in Section 12.2 in
lawful money of the United States and in immediately available funds. The Agent
shall distribute the payments made by each Lender pursuant to the immediately
preceding sentence to the Issuer promptly upon receipt thereof in like funds as
received. Each Lender shall indemnify and hold harmless the Agent and the Issuer
from and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any delay in providing,
the Agent with such Lender's Commitment Percentage of the amount of any payment
made by the Issuer under a Letter of Credit in accordance with this clause (b)
above (except in respect of losses, liabilities or other obligations suffered by
the Agent or the Issuer, as the case may be, resulting from the gross negligence
or willful misconduct of the Agent or the Issuer, as the case may be). If a
Lender does not make available to the Agent when due such Lender's Commitment
Percentage of any unreimbursed payment made by the Issuer under a Letter of
Credit, such Lender shall be required to pay interest to the Agent for the
account of the Issuer on such Lender's Commitment Percentage of such payment at
a rate of interest per annum equal to (i) from the date such Lender should have
made such amount available until the third day therefrom, the Federal Funds
Effective Rate, and (ii) thereafter, the Federal Funds Effective Rate plus 2%,
in each case payable upon demand by the Issuer. The Agent shall distribute such
interest payments to the Issuer upon receipt thereof in like funds as received.
(c) Whenever the Agent is reimbursed by a Borrower, for the
account of the Issuer, for any payment under a Letter of Credit and such payment
relates to an amount previously paid by a Lender in respect of its Commitment
Percentage of the amount of such payment under such Letter of Credit, the Agent
(or the Issuer, if such payment by a Lender was paid by the Agent to the Issuer)
will promptly pay over such payment to such Lender.
2.10. Absolute Obligation with respect to Letter of Credit Payments
A Borrower's obligation to reimburse the Agent for the account
of the Issuer for each payment under or in respect of each Letter of Credit
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which such
Borrower may have or have had against the beneficiary of such Letter of Credit,
the Agent, the Issuer, the Swing Line Lender, any Lender or any other Person,
including, without limitation, any defense based on the failure of any drawing
to conform to the terms of such Letter of Credit, any drawing document proving
to be forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit, provided, however, that, with respect
to any Letter of Credit, the foregoing shall not relieve the Issuer of any
liability it may have to a Borrower for any actual damages sustained by such
Borrower arising from a wrongful payment under such Letter of Credit made as a
result of the Issuer's gross negligence or willful misconduct.
2.11. Borrower Addenda
Provided that no Default or Event of Default has occurred and
is continuing, the Company may direct that any of its domestic wholly- owned
Subsidiaries which is a Subsidiary Guarantor and which is not then a Borrower
become a Borrower by submitting a Borrower Addendum to the Agent with respect to
such Subsidiary duly executed by an Authorized Signatory of each of the Company
and such Subsidiary together with (a) a certificate, dated the date of such
Borrower Addendum of the Secretary or Assistant Secretary of such Subsidiary (i)
attaching a true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action (in form and
substance satisfactory to the Agent) taken by it to authorize such Borrower
Addendum, this Agreement and the transactions contemplated hereby, (ii)
attaching a true and complete copy of its certificate of incorporation, by-laws
or other organizational documents, (iii) setting forth the incumbency of its
officer or officers who may sign such Borrower Addendum, including therein a
signature specimen of such officer or officers and (iv) attaching a certificate
of good standing (or equivalent) issued by the jurisdiction of its incorporation
or formation, and (b) an opinion of counsel to such Subsidiary with respect to
such Borrower Addendum in all respects reasonably satisfactory to the Agent.
Upon receipt of a Borrower Addendum and the supporting documentation referred to
above, the Agent shall confirm such Borrower Addendum by signing a copy thereof
and shall deliver a copy thereof to the Company and each Lender. Thereupon the
Subsidiary which executed such Borrower Addendum shall become a "Subsidiary
Borrower" hereunder.
2.12. Records; Notes
(a) Lender's Records. Each Lender will note (manually or
electronically) on its records with respect to each Loan made by it (i) the date
and amount of such Loan, (ii) whether such Loan is a Revolving Credit Loan, a
Swing Line Loan or a Competitive Bid Loan, (iii) the identity of the Borrower
thereof, (iv) the interest rate (in the case of a Eurodollar Advance, a Swing
Line Loan or a Competitive Bid Loan) and Interest Period, if any, applicable to
such Loan and (v) each payment and prepayment of the principal thereof.
(b) Agent's Records. The Agent shall keep records regarding
the Loans, the Letters of Credit and this Agreement in accordance with its
customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable law, be prima facie evidence of the existence and
amount of the obligations of the Company and each Borrower recorded therein;
provided, however, that the failure of the Agent or any Lender, as the case may
be, to make any notation on its records shall not affect the Company's or the
respective Borrower's obligations in respect of the Loans, the Letters of Credit
or this Agreement.
(d) Notes. Upon the request of any Lender (in connection with
a proposed assignment to a Federal Reserve Bank as contemplated by Section
12.7(b)) to the Agent and each Borrower, each Borrower agrees, at the expense of
the Company, to execute and deliver to the Agent for the account of such Lender
one or more promissory notes evidencing the Loan or Loans of such Lender to such
Borrower, in form and substance satisfactory to the Agent and such Lender.
2.13. Increases of Aggregate Commitment Amount.
Provided that no Default exists or would exist immediately
before and after giving effect thereto, the Company may at any time, at its sole
cost and expense, request any one or more of the Lenders to increase its
Commitment Amount (such decision to increase its Commitment Amount to be within
the sole and absolute discretion of such Lender), or any other new bank
reasonably satisfactory to the Agent and the Issuer to provide a new Commitment,
by submitting an Increase Supplement in the form of Exhibit H (an "Increase
Supplement"), duly executed by the Company and each Borrower and each such
Lender or new bank, as the case may be. If such Increase Supplement is in all
respects reasonably satisfactory to the Agent, the Agent shall execute such
Increase Supplement and deliver a copy thereof to the Company and each such
Lender or new bank, as the case may be. Upon execution and delivery of such
Increase Supplement, (i) in the case of each such Lender, such Lender's
Commitment Amount shall be increased to the amount set forth in such Increase
Supplement, (ii) in the case of each such new bank, such new bank shall become a
party hereto and shall for all purposes of the Loan Documents be deemed a
"Lender" with a Commitment Amount in the amount set forth in such Increase
Supplement, and (iii) in each case, the Commitment Amount of such Lender or new
bank, as the case may be, shall be as set forth in the applicable Increase
Supplement; provided, however, that:
(a) immediately after giving effect thereto, the
Aggregate Commitment Amount shall not have been increased pursuant to
this Section 2.13 to an aggregate amount greater than $125,000,000;
(b) if Revolving Credit Loans shall be outstanding
immediately after giving effect to such increase, each such Lender and
each such new bank shall enter into a master assignment and acceptance
agreement with the other Lenders in all respects reasonably
satisfactory to such other Lenders, pursuant to which each such other
Lender shall assign to it a portion of its Revolving Credit Loans
necessary to reflect proportionately the Commitment Amounts as adjusted
in accordance with this Section 2.13, and in connection with such
master assignment and acceptance agreement each such other Lender may
treat the assignment of Eurodollar Advances as a prepayment of such
Eurodollar Advances for purposes of Section 3.5;
(c) each such new bank shall have delivered to the
Agent and the Company all forms, if any, that are required to be
delivered by such new bank pursuant to Section 3.10(b); and
(d) the Agent shall have received such certificates,
legal opinions and other items as it shall reasonably request in
connection with such increase.
3. PROCEEDS, PAYMENTS, CONVERSIONS, INTEREST, YIELD PROTECTION AND FEES
3.1. Disbursement of the Proceeds of the Loans
The Agent shall disburse the proceeds of the Loans (other than
the Swing Line Loans) at its office specified in Section 12.2 by crediting to
the applicable Borrower's general deposit account with the Agent the funds
received from each Lender. Unless the Agent shall have received prior notice
from a Lender (by telephone or otherwise, such notice to be confirmed by fax or
other writing) that such Lender will not make available to the Agent such
Lender's Commitment Percentage of the Revolving Credit Loans, to be made by it
on a Borrowing Date, or the amount of the Competitive Bid Loan, the Agent may
assume that such Lender has made such amount available to the Agent on such
Borrowing Date in accordance with this Section, provided that, in the case of a
Revolving Credit Loan, such Lender received notice thereof from the Agent in
accordance with the terms hereof, and the Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such Borrowing Date a
corresponding amount. If and to the extent such Lender shall not have so made
such amount available to the Agent, such Lender and the applicable Borrower
severally agree to pay to the Agent, forthwith on demand, such corresponding
amount (to the extent not previously paid by the other), together with interest
thereon for each day from the date such amount is made available to such
Borrower until the date such amount is paid to the Agent, at a rate per annum
equal to, in the case of such Borrower, the applicable interest rate set forth
in Section 3.4(a) and, in the case of such Lender, the Federal Funds Effective
Rate from the date such payment is due until the third day after such date and,
thereafter, at the Federal Funds Effective Rate plus 2%. Any such payment by an
applicable Borrower shall be without prejudice to its rights against such
Lender. If such Lender shall pay to the Agent such corresponding amount, such
amount so paid shall constitute such Lender's Loan as part of such Loans to such
Borrower for purposes of this Agreement, which Loan shall be deemed to have been
made by such Lender to such Borrower on the Borrowing Date applicable to such
Loans.
3.2. Payments
(a) Each borrowing of Revolving Credit Loans by a Borrower
from the Lenders, any Conversion of Revolving Credit Loans from one Type to
another, and any reduction in the Commitments shall be made pro rata according
to the Commitment Percentage of each Lender. Each payment, including each
prepayment, of principal and interest on the Loans and of the Facility Fee and
the Letter of Credit Participation Fee (collectively, together with all of the
other fees to be paid to the Agent, the Lenders, the Issuer and the Swing Line
Lender in connection with the Loan Documents, the "Fees"), and of all of the
other amounts to be paid to the Agent and the Lenders in connection with the
Loan Documents shall be made by the Company and the Borrowers to the Agent at
its office specified in Section 12.2 in funds immediately available in New York
by 3:00 P.M. on the due date for such payment. The failure of a Borrower to make
any such payment by such time shall not constitute a default hereunder, provided
that such payment is made on such due date, but any such payment made after 3:00
P.M. on such due date shall be deemed to have been made on the next Domestic
Business Day or Eurodollar Business Day, as the case may be, for the purpose of
calculating interest on amounts outstanding on the Loans. If the Company or a
Borrower has not made any such payment prior to 3:00 P.M., the Company and such
Borrower hereby authorize the Agent to deduct the amount of any such payment
from such account(s) as the Company and such Borrower may from time to time
designate in writing to the Agent, upon which the Agent shall apply the amount
of such deduction to such payment. Promptly upon receipt thereof by the Agent,
each payment of principal and interest on the: (i) Revolving Credit Loans shall
be remitted by the Agent in like funds as received to each Lender (a) first, pro
rata according to the amount of interest which is then due and payable to the
Lenders, and (b) second, pro rata according to the amount of principal which is
then due and payable to the Lenders, (ii) Swing Line Loans shall be remitted by
the Agent in like funds as received to the Swing Line Lender and (iii)
Competitive Bid Loans shall be remitted by the Agent in like funds as received
to each applicable Lender. Each payment of the Fees shall be promptly
transmitted by the Agent in like funds as received to each party entitled
thereto pro rata to each Lender in the case of the Facility Fee and the Letter
of Credit Participation Fee according to such Lender's Commitment Amount or, if
the Commitments shall have terminated or been terminated, according to the
outstanding principal amount of such Lender's Revolving Credit Loans or Letter
of Credit Exposure, respectively.
(b) If any payment hereunder or under the Loans shall be due
and payable on a day which is not a Domestic Business Day or Eurodollar Business
Day, as the case may be, the due date thereof (except as otherwise provided in
the definition of Eurodollar Interest Period or Competitive Interest Period)
shall be extended to the next Domestic Business Day or Eurodollar Business Day,
as the case may be, and (except with respect to payments in respect of the
Facility Fee and in respect of the Letter of Credit Participation Fee) interest
shall be payable at the applicable rate specified herein during such extension.
3.3. Conversions; Other Matters
(a) The Company on behalf of a Borrower may elect at any time
and from time to time to Convert one or more Eurodollar Advances to an ABR
Advance by giving the Agent at least one Domestic Business Day's prior
irrevocable notice of such election, specifying the amount to be so Converted,
provided that any such Conversion shall only be made on the last day of the
Interest Period applicable to each such Eurodollar Advance. In addition, a
Borrower may elect from time to time to Convert an ABR Advance to any one or
more new Eurodollar Advances or to Convert any one or more existing Eurodollar
Advances to any one or more new Eurodollar Advances by giving the Agent at least
two Eurodollar Business Days' prior irrevocable notice, in the case of a
Conversion to Eurodollar Advances, of such election, specifying the amount to be
so Converted and the initial Interest Period relating thereto, provided that (i)
any Conversion of an ABR Advance to Eurodollar Advances shall only be made on a
Eurodollar Business Day and (ii) any Conversion of Eurodollar Advances shall
only be made on the last day of the Interest Period applicable thereto. The
Agent shall promptly provide the Lenders with notice of each such election. ABR
Advances and Eurodollar Advances may be Converted pursuant to this Section in
whole or in part, provided that the amount to be Converted to each Eurodollar
Advance, when aggregated with any Eurodollar Advance to be made on such date in
accordance with Section 2.1 and having the same Interest Period as such first
Eurodollar Advance, shall equal no less than $1,000,000 or an integral multiple
of $1,000,000 in excess thereof.
(b) Notwithstanding anything in this Agreement to the
contrary, upon the occurrence and during the continuance of a Default or an
Event of Default, no Borrower shall have the right to elect to Convert any
existing ABR Advance to a new Eurodollar Advance or to Convert any existing
Eurodollar Advance to a new Eurodollar Advance. In such event, such ABR Advance
shall be automatically continued as an ABR Advance or such Eurodollar Advance
shall be automatically Converted to an ABR Advance on the last day of the
Interest Period applicable to such Eurodollar Advance. The foregoing shall not
affect any other rights or remedies that the Agent or any Lender may have under
this Agreement, any other Loan Document.
(c) Each Conversion shall be effected by each Lender by
applying the proceeds of each new ABR Advance or Eurodollar Advance, as the case
may be, to the existing Advance (or portion thereof) being Converted (it being
understood that such Conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).
(d) Notwithstanding any other provision of any Loan Document:
(i) if a Borrower shall have failed to elect a
Eurodollar Advance under Section 2.3 or this Section 3.3, as the case
may be, in connection with any borrowing of new Revolving Credit Loans
or expiration of an Interest Period with respect to any existing
Eurodollar Advance, the amount of the Revolving Credit Loans subject to
such borrowing or such existing Eurodollar Advance shall thereafter be
an ABR Advance until such time, if any, as such Borrower shall elect a
new Eurodollar Advance pursuant to this Section 3.3,
(ii) a Borrower shall not be permitted to select a
Eurodollar Advance the Interest Period in respect of which ends later
than the Commitment Termination Date or such earlier date upon which
all of the Commitments shall have been voluntarily terminated in
accordance with Section 2.6, and
(iii) the Borrowers shall not be permitted to have
more than 15 Eurodollar Advances and Competitive Bid Loans outstanding
at any one time, it being understood and agreed that each borrowing of
Eurodollar Advances or Competitive Bid Loans pursuant to a single
Borrowing Request or Competitive Bid Request shall constitute the
making of one Eurodollar Advance or Competitive Bid Loan for the
purpose of calculating such limitation.
3.4. Interest Rates and Payment Dates
(a) Prior to Maturity. Except as otherwise provided in
Sections 3.4(b) and 3.4(c), the Loans shall bear interest on the unpaid
principal balance thereof at the applicable interest rate or rates per annum set
forth below:
LOANS RATE
Revolving Credit Loans Alternate Base Rate applicable
made as ABR Advances thereto plus the Applicable Margin.
Revolving Credit Loans Eurodollar Rate applicable
made as Eurodollar thereto
Advances plus the Applicable Margin.
Competitive Bid Loans Fixed rate of
interest applicable
thereto accepted by the
Company on behalf of
the applicable Borrower
pursuant to Section
2.4(d).
Swing Line Loans Negotiated Rate applicable
thereto as provided in
Section 2.2(a).
(b) After Maturity, Late Payment Rate. After maturity,
whether by acceleration, notice of intention to prepay or otherwise, the
outstanding principal balance of the Loans shall bear interest at the Alternate
Base Rate plus 2% per annum until paid (whether before or after the entry of any
judgment thereon). Any payment of principal, interest, Fees or any other amount
payable under the Loan Documents not paid on the date when due and payable shall
bear interest at (i) in the case of principal, the applicable interest rate set
forth in Section 3.4(a) plus 2% per annum and (ii) in the case of interest, Fees
or any other amount payable under the Loan Documents, the Alternate Base Rate
plus the Applicable Margin plus 2% per annum, in each case from the due date
thereof until the date such payment is made (whether before or after the entry
of any judgment thereon.
(c) Highest Lawful Rate. Notwithstanding anything to the
contrary contained in this Agreement, at no time shall the interest rate payable
to any Lender on any of its Loans, together with the Fees and all other amounts
payable hereunder to such Lender to the extent the same constitute or are deemed
to constitute interest, exceed the Highest Lawful Rate. If in respect of any
period during the term of this Agreement, any amount paid to any Lender
hereunder, to the extent the same shall (but for the provisions of this Section
3.4) constitute or be deemed to constitute interest, would exceed the maximum
amount of interest permitted by the Highest Lawful Rate during such period (such
amount being hereinafter referred to as an "Unqualified Amount"), then (i) such
Unqualified Amount shall be applied or shall be deemed to have been applied as a
prepayment of the Loans of such Lender, and (ii) if, in any subsequent period
during the term of this Agreement, all amounts payable hereunder to such Lender
in respect of such period which constitute or shall be deemed to constitute
interest shall be less than the maximum amount of interest permitted by the
Highest Lawful Rate during such period, then the applicable Borrower shall pay
to such Lender in respect of such period an amount (each a "Compensatory
Interest Payment") equal to the lesser of (x) a sum which, when added to all
such amounts, would equal the maximum amount of interest permitted by the
Highest Lawful Rate during such period, and (y) an amount equal to the aggregate
sum of all Unqualified Amounts less all other Compensatory Interest Payments.
(d) General. Interest shall be payable in arrears on each
Interest Payment Date and, to the extent provided in Section 2.7(b), upon each
prepayment of the Loans. Any change in the interest rate on the Loans resulting
from an increase or a decrease in the Alternate Base Rate or any reserve
requirement shall become effective as of the opening of business on the day on
which such change shall become effective. The Agent shall, as soon as
practicable, notify the Company on behalf of all Borrowers and the Lenders of
the effective date and the amount of each change in the BNY Rate, but any
failure to so notify shall not in any manner affect the obligation of the
Borrowers to pay interest on the Loans in the amounts and on the dates set forth
herein. Each determination by the Agent of the Alternate Base Rate, the Federal
Funds Effective Rate, the Eurodollar Rate and the Competitive Bid Rate pursuant
to this Agreement shall be conclusive and binding on the Borrowers absent
manifest error. Each Borrower acknowledges that to the extent interest payable
on the Loans is based on the Alternate Base Rate, such rate is only one of the
bases for computing interest on loans made by the Lenders, and by basing
interest payable on ABR Advances on the Alternate Base Rate, the Lenders have
not committed to charge, and the Borrowers have not in any way bargained for,
interest based on a lower or the lowest rate at which the Lenders may now or in
the future make extensions of credit to other Persons. All interest (other than
interest calculated with reference to the BNY Rate) shall be calculated on the
basis of a 360-day year for the actual number of days elapsed, and all interest
calculated with reference to the BNY Rate shall be made on the basis of a
365/366-day year for the actual number of days elapsed.
3.5. Indemnification for Loss
Notwithstanding anything contained herein to the contrary,
if a Borrower shall fail to borrow a Eurodollar Advance or if a Borrower shall
fail to Convert a Eurodollar Advance after it shall have given notice to do so
in which it shall have requested a Eurodollar Advance pursuant to Section 2.3 or
3.3, as the case may be, or if the Borrower shall fail to borrow a Swing Line
Loan after it shall have agreed to a Negotiated Rate with respect thereto in
accordance with Section 2.2(a), or if the applicable Borrower shall fail to
borrow a Competitive Bid Loan after the Company on behalf of such Borrower shall
have accepted any offer with respect thereto in accordance with Section 2.4, or
if a Eurodollar Advance, Swing Line Loan or Competitive Bid Loan shall be
terminated for any reason prior to the last day of the Interest Period
applicable thereto, or if any repayment or prepayment of the principal amount of
a Eurodollar Advance, Swing Line Loan or Competitive Bid Loan is made for any
reason on a date which is prior to the last day of the Interest Period
applicable thereto, such Borrower agrees to indemnify each Lender (or the Swing
Line Lender, as applicable) against, and to pay on demand directly to such
Lender the amount (calculated by such Lender using any method chosen by such
Lender which is customarily used by such Lender for such purpose) equal to any
loss or expense suffered by such Lender as a result of such failure to borrow or
Convert, or such termination, repayment or prepayment, including any loss, cost
or expense suffered by such Lender in liquidating or employing deposits acquired
to fund or maintain the funding of such Eurodollar Advance, Swing Line Loan or
Competitive Bid Loan, as the case may be, or redeploying funds prepaid or
repaid, in amounts which correspond to such Eurodollar Advance, Swing Line Loan
or Competitive Bid Loan , as the case may be, and any reasonable internal
processing charge customarily charged by such Lender in connection therewith.
3.6. Reimbursement for Costs, Etc.
If at any time or from time to time there shall occur a
Regulatory Change and the Issuer or any Lender shall have reasonably determined
that such Regulatory Change (i) shall have had or will thereafter have the
effect of reducing (A) the rate of return on the Issuer's or such Lender's
capital or the capital of any Person directly or indirectly owning or
controlling the Issuer or such Lender (each a "Control Person"), or (B) the
asset value (for capital purposes) to the Issuer or such Lender or such Control
Person, as applicable, of the Reimbursement Obligations, or any participation
therein, or the Loans, or any participation therein, in any case to a level
below that which the Issuer or such Lender or such Control Person could have
achieved or would thereafter be able to achieve but for such Regulatory Change
(after taking into account the Issuer's, such Lender's or such Control Person's
policies regarding capital), (ii) will impose, modify or deem applicable any
reserve, asset, special deposit or special assessment requirements on deposits
obtained in the interbank eurodollar market in connection with the Loan
Documents (excluding, with respect to any Eurodollar Advance, any such
requirement which is included in the determination of the rate applicable
thereto), (iii) will subject the Issuer, or such Lender or such Control Person,
as applicable, to any tax (documentary, stamp or otherwise) with respect to this
Agreement, any Loan Document, or (iv) will change the basis of taxation of
payments to the Issuer or such Lender or such Control Person, as applicable, of
principal, interest or fees payable under the Loan Documents (except, in the
case of clauses (iii) and (iv) above, for any tax or changes in the rate of tax
on the Issuer's, or such Lender's or such Control Person's net income) then, in
each such case, within ten days after demand by the Issuer or such Lender, as
applicable, the Company shall pay to the Issuer, such Lender or such Control
Person, as the case may be, such additional amount or amounts as shall be
sufficient to compensate the Issuer, such Lender or such Control Person, as the
case may be, for any such reduction, reserve or other requirement, tax, loss,
cost or expense (excluding general administrative and overhead costs)
attributable to the Issuer's, such Lender's or such Control Person's compliance
during the term hereof with such Regulatory Change. The Issuer and each Lender
may make multiple requests for compensation under this Section.
3.7. Illegality of Funding
Notwithstanding any other provision hereof, if any Lender
shall reasonably determine that any law, regulation, treaty or directive, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for such Lender to make or maintain any Eurodollar Advance as
contemplated by this Agreement, such Lender shall promptly notify the Company on
behalf of all Borrowers and the Agent thereof, and (a) the commitment of such
Lender to make such Eurodollar Advances or Convert ABR Advances to such
Eurodollar Advances shall forthwith be suspended, (b) such Lender shall fund its
portion of each requested Eurodollar Advance as an ABR Advance and (c) such
Lender's Loans then outstanding as such Eurodollar Advances, if any, shall be
Converted automatically to an ABR Advance on the last day of the then current
Interest Period applicable thereto or at such earlier time as may be required.
If the commitment of any Lender with respect to Eurodollar Advances is suspended
pursuant to this Section and such Lender shall have obtained actual knowledge
that it is once again legal for such Lender to make or maintain Eurodollar
Advances, such Lender shall promptly notify the Agent and the Company on behalf
of all Borrowers thereof and, upon receipt of such notice by each of the Agent
and the Company, such Lender's commitment to make or maintain Eurodollar
Advances shall be reinstated. If the commitment of any Lender with respect to
Eurodollar Advances is suspended pursuant to this Section, such suspension shall
not otherwise affect such Lender's Commitment.
3.8. Option to Fund; Substituted Interest Rate
(a) Each Lender has indicated that, if a Borrower requests a
Swing Line Loan, a Eurodollar Advance or a Competitive Bid Loan , such Lender
may wish to purchase one or more deposits in order to fund or maintain its
funding of its Commitment Percentage of such Swing Line Loan or Eurodollar
Advance or Competitive Bid Loan during the Interest Period with respect thereto;
it being understood that the provisions of this Agreement relating to such
funding are included only for the purpose of determining the rate of interest to
be paid in respect of such Swing Line Loan, Eurodollar Advance or Competitive
Bid Loan and any amounts owing under Sections 3.5 and 3.6. The Swing Line Lender
and each Lender shall be entitled to fund and maintain its funding of all or any
part of each Swing Line Loan, Eurodollar Advance and Competitive Bid Loan in any
manner it sees fit, but all such determinations hereunder shall be made as if
such Lender had actually funded and maintained its Swing Line Loan or
Competitive Bid Loan or its Commitment Percentage of each Eurodollar Advance
during the applicable Interest Period through the purchase of deposits in an
amount equal to the amount of such Swing Line Loan, Eurodollar Advance or
Competitive Bid Loan, and having a maturity corresponding to such Interest
Period. The Swing Line Lender, with respect to Swing Line Loans, and any Lender
may fund its Competitive Bid Loans or Commitment Percentage of each Eurodollar
Advance from or for the account of any branch or office of such Lender as such
Lender may choose from time to time, subject to Section 3.10.
(b) In the event that (i) the Agent shall have determined in
good faith (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank eurodollar
market either adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.3 or Section 3.3, or (ii) the
Required Lenders shall have notified the Agent that they have in good faith
determined (which determination shall be conclusive and binding on the
Borrowers) that the applicable Eurodollar Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining or funding loans bearing
interest based on such Eurodollar Rate with respect to any portion of the Loans
that a Borrower has requested be made as Eurodollar Advances or any Eurodollar
Advance that will result from the requested conversion of any portion of the
Loans into Eurodollar Advances (each, an "Affected Advance"), the Agent shall
promptly notify the Company on behalf of the Borrowers and the Lenders (by
telephone or otherwise, to be promptly confirmed in writing) of such
determination on or, to the extent practicable, prior to the requested Borrowing
Date or conversion date for such Affected Advances. If the Agent shall give such
notice, (A) any Affected Advances shall be made as ABR Advances (or, subject to
the terms hereof, Competitive Bid Loans), (B) the Loans (or any portion thereof)
that were to have been Converted to Affected Advances shall be Converted to or
continued as ABR Advances (or, subject to the terms hereof, Competitive Bid
Loans), and (C) any outstanding Affected Advances shall be Converted, on the
last day of the then current Interest Period with respect thereto, to ABR
Advances (or, subject to the terms hereof, Competitive Bid Loans). Until any
notice under clauses (i) or (ii), as the case may be, of this Section 3.8(b) has
been withdrawn by the Agent (by notice to the Company on behalf of the
Borrowers) promptly upon either (x) the Agent having determined that such
circumstances affecting the relevant market no longer exist and that adequate
and reasonable means do exist for determining the Eurodollar Rate pursuant to
Section 2.3 or Section 3.3, or (y) the Agent having been notified by such
Required Lenders that circumstances no longer render the Loans (or any portion
thereof) Affected Advances, no further Eurodollar Advances shall be required to
be made by the Lenders nor shall the Borrowers have the right to Convert all or
any portion of the Loans to Eurodollar Advances.
3.9. Certificates of Payment and Reimbursement
Each of the Issuer and each Lender agrees, in connection
with any request by it for payment or reimbursement pursuant to Section 3.5 or
3.6, to provide the applicable Borrower with a certificate, signed by an officer
of the Issuer or such Lender, as the case may be, setting forth a description in
reasonable detail of any such payment or reimbursement. Each determination by
the Issuer and each Lender of such payment or reimbursement shall be conclusive
absent manifest error.
3.10. Taxes; Net Payments
(a) All payments made by the Borrowers under the Loan
Documents shall be made free and clear of, and without reduction for or on
account of, any taxes required by law to be withheld from any amounts payable
under the Loan Documents. In the event that a Borrower is prohibited by law from
making such payments free of deductions or withholdings, then such Borrower
shall pay such additional amounts to the Agent, for the benefit of the Issuer
and the Lenders, as may be necessary in order that the actual amounts received
by the Issuer and the Lenders in respect of interest and any other amounts
payable under the Loan Documents after deduction or withholding (and after
payment of any additional taxes or other charges due as a consequence of the
payment of such additional amounts) shall equal the amount that would have been
received if such deduction or withholding were not required. In the event that
any such deduction or withholding can be reduced or nullified as a result of the
application of any relevant double taxation convention, the Lenders, the Issuer
and the Agent will, at the expense of the applicable Borrower, cooperate with
such Borrower in making application to the relevant taxing authorities seeking
to obtain such reduction or nullification, provided that the Lenders, the Issuer
and the Agent shall have no obligation to (i) engage in litigation with respect
thereto or (ii) disclose any tax return or other confidential information. If a
Borrower shall make any payment under this Section or shall make any deduction
or withholding from amounts paid under any Loan Document, such Borrower shall
forthwith forward to the Agent original or certified copies of official receipts
or other evidence acceptable to the Agent establishing each such payment,
deduction or withholding, as the case may be, and the Agent in turn shall
distribute copies thereof to the Issuer and each Lender. If any payment to the
Issuer or any Lender under any Loan Document is or becomes subject to any
withholding, the Issuer or such Lender, as the case may be, shall (unless
otherwise required by a Governmental Authority or as a result of any law, rule,
regulation, order or similar directive applicable to the Issuer or such Lender,
as the case may be) designate a different office or branch to which such payment
is to be made from that initially selected thereby, if such designation would
avoid such withholding and would not be otherwise disadvantageous to the Issuer
or such Lender, as the case may be, in any respect. In the event that the Issuer
or any Lender determines that it received a refund or credit for taxes paid by a
Borrower under this Section, the Issuer or such Lender, as the case may be,
shall promptly notify the Agent and such Borrower of such fact and shall remit
to such Borrower the amount of such refund or credit applicable to the payments
made by such Borrower in respect of the Issuer or such Lender, as the case may
be, under this Section.
(b) So long as it is lawfully able to do so, each Lender not
incorporated under the laws of the United States or any State thereof shall
deliver to the Company on behalf of itself and the other Borrowers such
certificates, documents, or other evidence as a Borrower may reasonably require
from time to time as are necessary to establish that such Lender is not subject
to withholding under Section 1441, 1442 or 3406 of the Internal Revenue Code or
as may be necessary to establish, under any law imposing upon such Borrower,
hereafter, an obligation to withhold any portion of the payments made by such
Borrower under the Loan Documents, that payments to the Agent on behalf of such
Lender are not subject to withholding. Notwithstanding any provision herein to
the contrary, a Borrower shall have no obligation to pay to the Issuer, the
Swing Line Lender or any Lender any amount which such Borrower is liable to
withhold due to the failure of the Issuer, the Swing Line Lender or such Lender,
as the case may be, to file any statement of exemption required by the Internal
Revenue Code.
3.11. Facility Fee
The Company agrees to pay to the Agent for the pro rata
account of each Lender a fee (the "Facility Fee"), payable quarterly in arrears
during the period commencing on the Effective Date and ending on the Expiration
Date on the last day of each March, June, September and December of each year,
commencing on the last day of the calendar quarter in which the Effective Date
shall have occurred, and on the Expiration Date, at a rate per annum equal to
the Applicable Margin of (i) prior to the Commitment Termination Date or such
earlier date upon which all of the Commitments shall have been voluntarily
terminated by the Company in accordance with Section 2.6, the Commitment Amount
of such Lender (whether used or unused), and (ii) thereafter, the sum of the
outstanding principal balance of all Revolving Credit Loans of such Lender, such
Lender's Swing Line Exposure and such Lender's Letter of Credit Exposure.
Notwithstanding anything to the contrary contained in this Section, on and after
the Commitment Termination Date, the Facility Fee shall be payable upon demand.
In addition, upon each reduction of the Aggregate Commitment Amount, the Company
shall pay the Facility Fee accrued on the amount of such reduction through the
date of such reduction. The Facility Fee shall be computed on the basis of a
360-day year for the actual number of days elapsed.
3.12. Letter of Credit Participation Fee
The Company agrees to pay to the Agent for the pro rata
account of each Lender a fee (the "Letter of Credit Participation Fee") with
respect to each Standby Letter of Credit and Commercial Letter of Credit,
payable quarterly in arrears during the period commencing on the Effective Date
and ending on the Commitment Termination Date on the last day of each March,
June, September and December of each year, commencing on the last day of the
calendar quarter in which the Effective Date shall have occurred, and ending on
the expiration date or the date of termination of such Letter of Credit, at a
rate per annum equal to the Applicable Margin of the average daily amount which
may be drawn under such Letter of Credit during such period (whether or not the
conditions for drawing thereunder have or may be satisfied) multiplied by such
Lender's Commitment Percentage. The Letter of Credit Participation Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, the Lenders and the Issuer to enter into
this Agreement, the Lenders to make the Loans and the Issuer to issue Letters of
Credit, the Company (on behalf of itself and all Borrowers) hereby makes the
following representations and warranties to the Agent, the Lenders and the
Issuer:
4.1. Existence and Power
Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (except, in the case of the Subsidiaries, where the
failure to be in such good standing could not reasonably be expected to have a
Material Adverse effect), has all requisite corporate power and authority to own
its Property and to carry on its business as now conducted, and is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real Property or in which the nature of
its business requires it to be so qualified (except those jurisdictions where
the failure to be so qualified or to be in good standing could not reasonably be
expected to have a Material Adverse effect).
4.2. Authority
Each Credit Party has full corporate power and authority to
enter into, execute, deliver and perform the terms of the Loan Documents to
which it is a party, all of which have been duly authorized by all proper and
necessary corporate action and are not in contravention of any applicable law or
the terms of its Certificate of Incorporation and By-Laws. No consent or
approval of, or other action by, shareholders of any Credit Party, any
Governmental Authority, or any other Person (which has not already been
obtained) is required to authorize in respect of such Credit Party, or is
required in connection with the execution, delivery, and performance by such
Credit Party of the Loan Documents to which it is a party, or is required as a
condition to the enforceability of the Loan Documents to which it is a party
against such Credit Party.
4.3. Binding Agreement
The Loan Documents to which it is a party constitute the
valid and legally binding obligations of each Credit Party, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
equitable principles relating to the availability of specific performance as a
remedy.
4.4. Litigation
There are no actions, suits, arbitration proceedings or
claims (whether purportedly on behalf of the Company or any Subsidiary or
otherwise) pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary or any of its respective Properties, or maintained by
the Company or any Subsidiary, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material Adverse effect.
There are no proceedings pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary (a) which call into question the validity
or enforceability of, or otherwise seek to invalidate any Loan Document, or (b)
which might, individually or in the aggregate, materially and adversely affect
any of the transactions contemplated by any Loan Document.
4.5. No Conflicting Agreements
(a) Neither the Company nor any Subsidiary is in default
under any agreement to which it is a party or by which it or any of its Property
is bound the effect of which could reasonably be expected to have a Material
Adverse effect. No notice to, or filing with, any Governmental Authority is
required for the due execution, delivery and performance by any Credit Party of
the Loan Documents to which it is a party.
(b) No provision of any existing material mortgage, material
indenture, material contract or material agreement or of any existing statute,
rule, regulation, judgment, decree or order binding on the Company or any
Subsidiary or affecting the Property of the Company or any Subsidiary conflicts
with, or requires any consent which has not already been obtained under, or
would in any way prevent the execution, delivery or performance by any Credit
Party of the terms of, any Loan Document to which it is a party. The execution,
delivery or performance by each Credit Party of the terms of each Loan Document
to which it is a party will not constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon the Property
of any Credit Party pursuant to the terms of any such mortgage, indenture,
contract or agreement.
4.6. Taxes
The Company and each Subsidiary has filed or caused to be
filed all tax returns, and has paid, or has made adequate provision for the
payment of, all taxes shown to be due and payable on said returns or in any
assessments made against it, the failure of which to file or pay could
reasonably be expected to have a Material Adverse effect, and no tax Liens
(other than Liens permitted under Section 8.2) have been filed against such
Credit Party and no claims are being asserted with respect to such taxes which
are required by GAAP to be reflected in the Financial Statements and are not so
reflected, except for taxes which have been assessed but which are not yet due
and payable. The charges, accruals and reserves on the books of the Company and
each Subsidiary with respect to all federal, state, local and other taxes are
considered by the management of the Company to be adequate, and the Company
knows of no unpaid assessment which (a) could reasonably be expected to have a
Material Adverse effect, or (b) is or might be due and payable against it or any
Subsidiary or any Property of the Company or any Subsidiary, except such thereof
as are being contested in good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set aside in accordance
with GAAP or which have been assessed but are not yet due and payable.
4.7. Compliance with Applicable Laws; Filings
Neither the Company nor any Subsidiary is in default with
respect to any judgment, order, writ, injunction, decree or decision of any
Governmental Authority which default could reasonably be expected to have a
Material Adverse effect. The Company and each Subsidiary is complying with all
applicable statutes, rules and regulations of all Governmental Authorities, a
violation of which could reasonably be expected to have a Material Adverse
effect. The Company and each Subsidiary has filed or caused to be filed with all
Governmental Authorities all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws, rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse effect.
4.8. Governmental Regulations
Neither the Company nor any Subsidiary nor any corporation
controlling the Company or any Subsidiary or under common control with the
Company or any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, or is subject to any statute or regulation which
regulates the incurrence of Indebtedness.
4.9. Federal Reserve Regulations; Use of Loan Proceeds
No Credit Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System, as amended. No part of the
proceeds of the Loans or the Letters of Credit has been or will be used,
directly or indirectly, to purchase, acquire or carry any Margin Stock or for a
purpose which violates any law, rule or regulation of any Governmental
Authority, including, without limitation, the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System, as amended.
Anything in this Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to a Borrower in violation of any limitation or
prohibition provided by any applicable law, regulation or statute, including
Regulation U of the Board of Governors of the Federal Reserve System.
4.10. No Misrepresentation
No representation or warranty contained in any Loan Document
and no certificate or written report furnished by a Credit Party to the Agent or
any Lender contains or will contain, as of its date, a misstatement of material
fact, or omits or will omit to state, as of its date, a material fact required
to be stated in order to make the statements therein contained not misleading in
the light of the circumstances under which made.
4.11. Plans
Each Employee Benefit Plan of the Company, each Subsidiary
and each ERISA Affiliate is in compliance with ERISA and the Internal Revenue
Code, where applicable, except where the failure to so comply would not be
material. The Company, each Subsidiary and each ERISA Affiliate have complied
with the material requirements of Section 515 of ERISA with respect to each
Pension Plan which is a Multiemployer Plan, except where the failure to so
comply would not be material. The Company and each Subsidiary and each ERISA
Affiliate has, as of the date hereof, made all contributions or payments to or
under each such Pension Plan required by law or the terms of such Pension Plan
or any contract or agreement. No liability to the PBGC has been, or is
reasonably expected by the Company, any Subsidiary or any ERISA Affiliate to be,
incurred by the Company or such Subsidiary or ERISA Affiliate. Liability, as
referred to in this Section 4.11, includes any joint and several liability, but
excludes any liability for premiums under Section 4007 of ERISA. Each Employee
Benefit Plan which is a group health plan within the meaning of Section
5000(b)(1) of the Internal Revenue Code is in material compliance with the
continuation of health care coverage requirements of Section 4980B of the
Internal Revenue Code.
4.12. Environmental Matters
Neither the Company nor any Subsidiary (a) has received
written notice or otherwise learned of any claim, demand, action, event,
condition, report or investigation indicating or concerning any potential or
actual liability which individually or in the aggregate could reasonably be
expected to have a Material Adverse effect, arising in connection with (i) any
non-compliance with or violation of the requirements of any applicable federal,
state or local environmental health or safety statute or regulation, or (ii) the
release or threatened release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment, (b) to the best knowledge
of the Company, has any threatened or actual liability in connection with the
release or threatened release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment which individually or in
the aggregate could reasonably be expected to have a Material Adverse effect,
(c) has received notice of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release or threatened release of
any toxic or hazardous waste, substance or constituent or other substance into
the environment for which the Company or such Subsidiary is or would be liable,
which liability would reasonably be expected to have a Material Adverse effect,
or (d) has received notice that the Company or such Subsidiary is or may be
liable to any Person under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq., or
any analogous state law, which liability would reasonably be expected to have a
Material Adverse effect. The Company and each Subsidiary is in compliance with
the financial responsibility requirements of federal and state environmental
laws to the extent applicable, including those contained in 40 C.F.R., parts 264
and 265, subpart H, and any analogous state law, except in those cases in which
the failure so to comply would not reasonably be expected to have a Material
Adverse effect.
4.13. Financial Statements
The Company has heretofore delivered to the Lenders through
the Agent copies of the audited Consolidated Balance Sheet of the Company and
its Subsidiaries as of December 31, 1997, and the related Consolidated Statement
of Income and Retained Earnings, and Consolidated Statement of Cash Flows, for
the fiscal year then ended, collectively, together with any related notes and
schedules, the "Financial Statements"). The Financial Statements fairly present
the Consolidated financial condition and results of the operations of the
Company and the Subsidiaries, in each case as of the dates and for the periods
indicated therein and, except as noted therein, have been prepared in conformity
with GAAP as then in effect. Neither the Company nor any Subsidiary has any
obligation or liability of any kind (whether fixed, accrued, contingent,
unmatured or otherwise) which, in accordance with GAAP as then in effect, should
have been disclosed in the Financial Statements and was not. Since December 31,
1997 (x) there has been no Material Adverse change, including as a result of any
change in law, in the consolidated financial condition, operations, business or
Property of the Company and its Subsidiaries and (y) the Company and its
Subsidiaries have conducted their businesses only in the ordinary course.
4.14. Solvency
Immediately after giving effect to the making of each Loan
and the issuance of each Letter of Credit, the Company and each Subsidiary is
and will be Solvent.
5. CONDITIONS OF EFFECTIVENESS OF THIS AGREEMENT
This Agreement shall become effective upon the fulfillment of the
following conditions precedent:
5.1. Evidence of Corporate Action
The Agent shall have received a certificate, dated the
Effective Date, of the Secretary or an Assistant Secretary of each Credit Party,
(i) attaching a true and complete copy of the resolutions of its Board of
Directors and of all documents evidencing all other necessary corporate action
(in form and substance reasonably satisfactory to the Agent) taken by such
Credit Party to authorize the Loan Documents to which it is a party and the
transactions contemplated thereby, (ii) setting forth any changes to its
Certificate of Incorporation and By-Laws since November 20 1996, (iii) setting
forth the incumbency of the officer or officers of such Credit Party who may
sign the Loan Documents to which it is a party and any other certificates,
requests, notices or other documents now or in the future required thereunder,
including therein a signature specimen of such officers, and (iv) attaching a
certificate of good standing of the Secretary of State of the state of
incorporation of the Company, LNT, Inc., Rockford L.T., Inc. and Bloomington,
MN. L.T.,Inc.
5.2. Opinion of Special Counsel
The Agent shall have received from Special Counsel an
opinion, dated the Effective Date, substantially in the form of Exhibit F.
5.3. Opinion of Counsel to the Credit Parties
The Agent shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Esq., counsel to the Credit Parties, dated the Effective Date, substantially in
the form of Exhibit E.
5.4. Subsidiary Guaranty
The Agent shall have received the Subsidiary Guaranty duly
executed by an Authorized Signatory of each Subsidiary Guarantor.
6. CONDITIONS OF LENDING-ALL LOANS AND LETTERS OF CREDIT
The obligation of each Lender on any Borrowing Date to make each
Revolving Credit Loan, the Swing Line Lender to make each Swing Line Loan, the
Issuer to issue each Letter of Credit and any Lender to make a Competitive Bid
Loan are subject to the fulfillment of the following conditions precedent:
6.1. Compliance
On each Borrowing Date, and after giving effect to the Loans
to be made or the Letters of Credit to be issued on such Borrowing Date, (a)
there shall exist no Default or Event of Default, and (b) the representations
and warranties contained in each Loan Document shall be true and correct with
the same effect as though such representations and warranties had been made on
such Borrowing Date, except those which are expressly specified to be made as of
an earlier date.
6.2. Requests
The Agent shall have received either or both, as applicable,
of a Borrowing Request or a Letter of Credit Request from the Company on behalf
of the applicable Borrower.
6.3. Loan Closings
All documents required by the provisions of this Agreement
to have been executed or delivered to the Agent, any Lender or the Issuer on or
before the applicable Borrowing Date shall have been so executed or delivered on
or before such Borrowing Date.
7. AFFIRMATIVE AND FINANCIAL COVENANTS
The Company covenants and agrees that on and after the Effective Date
and until the later to occur of (a) the Commitment Termination Date, and (b) the
payment in full of the Loans, the Reimbursement Obligations, the Fees and all
other sums payable under the Loan Documents, the Company will:
7.1. Legal Existence
Except as may otherwise be permitted by Sections 8.3 and
8.4, maintain, and cause each Subsidiary to maintain, its corporate existence in
good standing in the jurisdiction of its incorporation or formation and in each
other jurisdiction in which the failure so to do could reasonably be expected to
have a Material Adverse effect, except that the corporate existence of
Subsidiaries operating closing or discontinued operations may be terminated.
7.2. Taxes
Pay and discharge when due, and cause each Subsidiary so to
do, all taxes, assessments, governmental charges, license fees and levies upon
or with respect to the Company and such Subsidiary, and upon the income, profits
and Property thereof unless, and only to the extent, that either (i)(a) such
taxes, assessments, governmental charges, license fees and levies shall be
contested in good faith and by appropriate proceedings diligently conducted by
the Company or such Subsidiary, and (b) such reserve or other appropriate
provision as shall be required by GAAP shall have been made therefor, or (ii)
the failure to pay or discharge such taxes, assessments, governmental charges,
license fees and levies could not reasonably be expected to have a Material
Adverse effect.
7.3. Insurance
Keep, and cause each Subsidiary to keep, insurance with
responsible insurance companies in such amounts and against such risks as is
usually carried by businesses similar to the Company and the Subsidiaries.
7.4. Performance of Obligations
Pay and discharge promptly when due, and cause each
Subsidiary so to do, all lawful Indebtedness, obligations and claims for labor,
materials and supplies or otherwise which, if unpaid, could reasonably be
expected to (a) have a Material Adverse effect, or (b) become a Lien on the
Property of the Borrower or any Subsidiary, except those Liens permitted under
Section 8.2, provided that neither the Company nor such Subsidiary shall be
required to pay or discharge or cause to be paid or discharged any such
Indebtedness, obligation or claim so long as (i) the validity thereof shall be
contested in good faith and by appropriate proceedings diligently conducted by
the Company or such Subsidiary, and (ii) such reserve or other appropriate
provision as shall be required by GAAP shall have been made therefor.
7.5. Condition of Property
Except for ordinary wear and tear, at all times, maintain,
protect and keep in good repair, working order and condition, all material
Property necessary for the operation of its business (other than Property which
is replaced with similar Property) as then being operated, and cause each
Subsidiary so to do.
7.6. Observance of Legal Requirements
Observe and comply in all material respects, and cause each
Subsidiary so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time hereafter
may be applicable to it or to such Subsidiary, a violation of which could
reasonably be expected to have a Material Adverse effect.
7.7. Financial Statements and Other Information
Maintain, and cause each Subsidiary to maintain, a standard
system of accounting in accordance with GAAP, and furnish to each Lender:
(a) As soon as available and, in any event, within 90 days
after the close of each fiscal year, a copy of (x) the Company's 10-K in respect
of such fiscal year, and (y) (i) the Company's Consolidated Balance Sheet as of
the end of such fiscal year, and (ii) the related Consolidated Statements of
Earnings, Shareholders' Equity and Cash Flows, as of and through the end of such
fiscal year, setting forth in each case in comparative form the corresponding
figures in respect of the previous fiscal year, all in reasonable detail, and
accompanied by a report of the Company's auditors, which report shall contain no
qualification as to scope of audit or going concern and shall state that (A)
such auditors audited such financial statements, (B) such audit was made in
accordance with generally accepted auditing standards in effect at the time and
provides a reasonable basis for such opinion, and (C) said financial statements
have been prepared in accordance with GAAP;
(b) As soon as available, and in any event within 50 days
after the end of each of the first three fiscal quarters of each fiscal year, a
copy of (x) the Company's 10-Q in respect of such fiscal quarter, and (y) (i)
the Company's Consolidated Balance Sheet as of the end of such quarter, and (ii)
the related Consolidated Statements of Earnings, Shareholders' Equity and Cash
Flows for (A) such quarter, and (B) the period from the beginning of the then
current fiscal year to the end of such quarter, in each case in comparable form
with the prior fiscal year, all in reasonable detail and prepared in accordance
with GAAP (without footnotes and subject to year-end adjustments);
(c) Simultaneously with the delivery of the financial
statements required by clauses (a) and (b) above, a certificate of the chief
financial officer or treasurer of the Company (or such other officer as shall be
acceptable to the Agent) certifying that no Default or Event of Default shall
have occurred or be continuing or, if so, specifying in such certificate all
such Defaults and Events of Default, and setting forth computations in
reasonable detail demonstrating compliance with Sections 7.10, 8.1, 8.5, 8.12
and 8.16 as at the end of such fiscal quarter or fiscal year, as the case may
be;
(d) Promptly upon becoming available, copies of all regular
or periodic reports (including, without limitation, current reports on Form 8-K)
which the Company or any Subsidiary may now or hereafter be required to file
with or deliver to the Securities and Exchange Commission, or any other
Governmental Authority succeeding to the functions thereof, and copies of all
material news releases sent to all stockholders;
(e) Prompt written notice of: (i) any citation, summons,
subpoena, order to show cause or other order naming the Company or any
Subsidiary a party to any proceeding before any Governmental Authority which
could reasonably be expected to have a Material Adverse effect, and include with
such notice a copy of such citation, summons, subpoena, order to show cause or
other order, (ii) any lapse or other termination of any license, permit,
franchise or other authorization issued to the Company or any Subsidiary by any
Governmental Authority, (iii) any refusal by any Governmental Authority to renew
or extend any license, permit, franchise or other authorization, and (iv) any
dispute between the Company or any Subsidiary and any Governmental Authority,
which lapse, termination, refusal or dispute, referred to in clause (ii), (iii)
or (iv) above, could reasonably be expected to have a Material Adverse effect;
(f) Prompt written notice of the occurrence of (i) each
Default, (ii) each Event of Default, and (iii) each Material Adverse change;
(g) Promptly upon receipt thereof, copies of any audit
reports and management letters delivered in connection with the statements
referred to in Section 7.7(a); and
(h) From time to time, such other information regarding the
financial position or business of the Company and the Subsidiaries, as the
Agent, at the request of any Lender, may reasonably request.
7.8. Records
Upon reasonable notice and during normal business hours,
permit representatives of the Agent and each Lender to visit the offices of the
Company and each Subsidiary, to examine the books and records (other than tax
returns and work papers related to tax returns) thereof and auditors' reports
relating thereto, to discuss the affairs of the Company and each Subsidiary with
the respective officers thereof, and to meet and discuss the affairs of the
Company and each Subsidiary with the Company's auditors. Any meeting with the
Company's auditors shall be at the expense of the Company if, at the time
thereof, a Default shall have occurred and be continuing.
7.9. Authorizations
Maintain and cause each Subsidiary to maintain, in full
force and effect, all copyrights, patents, trademarks, trade names, franchises,
licenses, permits, applications, reports, and other authorizations and rights,
which, if not so maintained, would individually or in the aggregate have a
Material Adverse effect.
7.10. Financial Covenants
(a) Fixed Charge Coverage Ratio. Maintain at all times a
Fixed Charge Coverage Ratio of not less than 1.35:1.00.
(b) Leverage Ratio. Maintain at all times a Leverage Ratio
of not more than 4.75:1.00.
(c) Minimum Tangible Net Worth. Maintain at all times
Tangible Net Worth in an amount not less than the sum of (i) $200,378,000, (ii)
50% of cumulative Consolidated net income (without giving effect to any net
losses) for each fiscal year commencing with the 1997 fiscal year and (iii) 100%
of the cumulative net proceeds received by the Company from any sale to the
public of its capital Stock for the period commencing after the Effective Date.
8. NEGATIVE COVENANTS
The Company covenants and agrees that on and after the Effective Date
and until the later to occur of (a) the Commitment Termination Date, and (b) the
payment in full of the Loans, the Reimbursement Obligations, the Fees and all
other sums which are payable under the Loan Documents, the Company will not:
8.1. Indebtedness
Create, incur, assume or suffer to exist any Indebtedness,
or permit any Subsidiary so to do, except (i) the Loans and the Letters of
Credit, (ii) capitalized lease, purchase money and real estate mortgage
Indebtedness of the Company and the Subsidiary Guarantors in an aggregate
outstanding principal amount not exceeding $12,500,000, (iii) Intercompany Debt,
(iv) additional unsecured Indebtedness of the Company and the Subsidiary
Guarantors in an aggregate outstanding principal amount not exceeding
$25,000,000 and (v) additional short-term Indebtedness of the Company in an
aggregate outstanding principal amount not exceeding $25,000,000 to finance the
construction of new stores.
8.2. Liens
Create, incur, assume or suffer to exist any Lien against or
on any Property now owned or hereafter acquired by the Company or any of the
Subsidiaries, or permit any Subsidiary so to do, except any one or more of the
following types of Liens: (a) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which phrase shall
not be construed to refer to ERISA or the minimum funding obligations under
Section 412 of the Code), (b) Liens to secure the performance of bids, tenders,
letters of credit (other than letters of credit securing the payment of
Indebtedness), contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics', workmen's, carriers',
warehousemen's, materialmen's, landlords', or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, (d) Liens for taxes, assessments, fees or governmental
charges the payment of which is not required by Section 7.2, (e) easements,
rights of way, restrictions, leases of Property to others, easements for
installations of public utilities, title imperfections and restrictions, zoning
ordinances and other similar encumbrances affecting Property which in the
aggregate do not materially impair its use for the operation of the business of
the Company or such Subsidiary, (f) Liens on Property under capital leases and
Liens on Property (excluding Liens on the Stock of any Subsidiary) acquired
(whether as a result of purchase, capital lease, merger or other acquisition)
and either existing on such Property when acquired, or created contemporaneously
with such acquisition to secure the payment or financing of the purchase price
of such Property (including the construction, development, substantial repair,
alteration or improvement thereof), provided that such Liens attach only to the
Property so purchased or acquired (including any such construction, development,
substantial repair, alteration or improvement thereof) and provided further that
the Indebtedness secured by such Liens is permitted by Section 8.1, (g)
statutory Liens in favor of lessors arising in connection with Property leased
to the Company or any of the Subsidiaries, (h) Liens of attachments, judgments
or awards against the Company or any of the Subsidiaries with respect to which
an appeal or proceeding for review shall be pending or a stay of execution shall
have been obtained, or which are otherwise being contested in good faith and by
appropriate proceedings diligently conducted, and in respect of which adequate
reserves shall have been established in accordance with GAAP on the books of the
Company or such Subsidiary, and (i) Liens securing Indebtedness of a Subsidiary
to the Company or another Subsidiary.
8.3. Dispositions
Make any Disposition, or permit any Subsidiary so to do,
except any one or more of the following:
(a) Dispositions of inventory in the ordinary course of
business;
(b) Dispositions of individual stores consistent with past
practices;
(c) Dispositions in the form of a sale/lease-back
transaction with respect to any store or distribution center constructed or
owned by the Company or any Subsidiary, provided the net proceeds from such
sale/lease-back transaction are immediately applied to the prepayment of the
Loans; and
(d) Restricted Payments to the extent permitted pursuant to
Section 8.6.
8.4. Merger or Consolidation, Etc.
Consolidate with, be acquired by, or merge into or with any
Person, or convey or otherwise transfer all or substantially all of its
Property, or permit any Subsidiary so to do, except that:
(a) any wholly-owned Subsidiary may consolidate with or
merge with any other wholly-owned Subsidiary, or convey or transfer all or
substantially all of its Property to any other wholly-owned Subsidiary, provided
that immediately before and after giving effect thereto no Default or Event of
Default shall or would exist;
(b) any wholly-owned Subsidiary may consolidate with or
merge with the Company, or convey or transfer all or substantially all of its
Property to the Company, provided that (x) immediately before and after giving
effect thereto no Default or Event of Default shall or would exist and (y) the
Company shall be the survivor of such consolidation or merger; and
(c) any Subsidiary may consolidate with or merge with
another Person, or any Subsidiary may convey or transfer all or substantially
all of its Property to such other Person, in each case solely in connection with
and as part of a permitted Disposition under Section 8.3 or a permitted
Acquisition under Section 8.5, provided that (x) immediately before and after
giving effect thereto no Default or Event of Default shall or would exist and
(y) in the event that the Company is party to any such merger or consolidation,
the Company shall be the survivor of such consolidation or merger;
provided that in connection with each such merger, conveyance or transfer the
Company and each Subsidiary party thereto shall execute and deliver to the Agent
such documents and opinions as the Agent shall require in connection therewith.
8.5. Acquisitions
Make any Acquisition, or permit any of the Subsidiaries so
to do, except any one or more of the following: (a) Acquisitions of store
leaseholds in the ordinary course of the Company's business and (b) other
Acquisitions by the Company or any of the Subsidiaries, provided that (i)
immediately before and after giving effect to each such other Acquisition, no
Default or Event of Default shall or would exist and (ii) the aggregate amount
expended on such other Acquisitions does not exceed $10,000,000 through the
Expiration Date.
8.6. Restricted Payments
Make any Restricted Payment, or permit any Subsidiary so to
do, except any one or more of the following Restricted Payments: (a) any direct
or indirect wholly-owned Subsidiary may make dividends or other distributions to
the Company or to any other direct or indirect wholly- owned Subsidiary, and (b)
the Company may make Restricted Payments in the form of repurchases of its Stock
pursuant to and in accordance with the Company's Incentive Compensation Plan,
provided that, in the case of this clause (b), immediately before and after
giving effect thereto, no Default or Event of Default shall or would exist.
8.7. Limitation on Upstream Dividends by Subsidiaries
Permit or cause any of the Subsidiaries to enter into or
agree, or otherwise be or become subject, to any agreement, contract or other
arrangement (other than this Agreement) with any Person pursuant to the terms of
which (a) such Subsidiary is or would be prohibited from declaring or paying any
cash dividends on any class of its stock owned directly or indirectly by the
Company or any of the other Subsidiaries or from making any other distribution
on account of any class of any such stock (herein referred to as "Upstream
Dividends"), or (b) the declaration or payment of Upstream Dividends by a
Subsidiary to the Company or another Subsidiary, on an annual or cumulative
basis, is or would be otherwise limited or restricted.
8.8. Limitation on Negative Pledges
Enter into any agreement, other than (i) this Agreement and
(ii) purchase money Lien documentation or capital leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed thereby), or permit any Subsidiary so to do, which
prohibits or limits the ability of the Company or such Subsidiary to create,
incur, assume or suffer to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter acquired.
8.9. Certain Documents
Amend, modify or otherwise change any term or provision of
the organizational documents of any Credit Party if such change would adversely
affect the interest of the Agent or the Lenders under the Loan Documents.
8.10. Business Change
Materially change the nature of the business of the Company
and the Subsidiaries as conducted on the Effective Date.
8.11. New Subsidiaries
Create or acquire any Subsidiary not existing on the
Effective Date, or permit any Subsidiary so to do, except (a) the Company or any
Subsidiary may create a new Subsidiary in connection with the construction or
acquisition of any new store, (b) the Company or any Subsidiary may acquire a
new Subsidiary in connection with an Acquisition permitted by Section 8.5 and
(c) the Company or any Subsidiary may create a new Subsidiary in the ordinary
course of its business. Within 30 days after each time the Agent notifies the
Company that the Agent has determined that one or more of the new Subsidiaries
which are not Subsidiary Guarantors is material, the Company shall cause such
new Subsidiaries as the Agent shall designate to execute and deliver to the
Agent a Subsidiary Guaranty Addendum and such other documents and opinions as
the Agent shall require in connection therewith. In addition, at any time the
Company may cause any Subsidiary which is not a Subsidiary Guarantor to become a
Subsidiary Guarantor by executing and delivering to the Agent a Subsidiary
Guaranty Addendum and such other documents and opinions as the Agent shall
require in connection therewith
8.12. Investments, Acquisitions, Loans, Etc.
At any time, purchase or otherwise acquire, hold or invest
in the Stock or Property of, or any other interest in, any Person, or make any
loan or advance to, or enter into any arrangement for the purpose of providing
funds or credit to, or make any other investment, whether by way of capital
contribution, deposit or otherwise, in or with any Person, or permit any
Subsidiary so to do (all of which are sometimes referred to herein as
"Investments"), except:
(a) Investments in cash or Cash Equivalents;
(b) normal business banking accounts and short-term
certificates of deposit and time deposits in, or issued by, federally insured
institutions in amounts not exceeding the limits of such insurance;
(c) Investments in the form of purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business; and
(d) Investments permitted by Sections 8.4, 8.5, 8.6 and
8.11.
8.13. Sale and Leaseback
Enter into any arrangement with any Person providing for the
leasing by it of Property which has been or is to be sold or transferred by it
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such Property or its rental
obligations, or permit any Subsidiary so to do, except to the extent permitted
under Section 8.3.
8.14. Fiscal Year
Change its fiscal year from that in effect on the Effective
Date, or permit any Subsidiary so to do, except, with 30 days' prior notice to
the Agent and the Lenders, the Company and all of the Subsidiaries may change
their fiscal year.
8.15. Transactions with Affiliates
Become a party to any transaction with an Affiliate unless
the terms and conditions relating thereto are as favorable to it as those which
would be obtainable at the time in a comparable arms-length transaction with a
Person other than an Affiliate, or permit any Subsidiary so to do.
8.16. Capital Expenditures
During any fiscal year, make any capital expenditures, or
incur any obligation so to do, or permit any Subsidiary so to do, in excess of
the following amounts during the following periods:
Period Amount
1998 fiscal year $65,000,000
1999 fiscal year $65,000,000
2000 fiscal year $75,000,000
2001 fiscal year $75,000,000
The amount set forth above for any fiscal year to the extent not used in such
fiscal year may be carried forward and added to the amount set forth above for
the next fiscal year. Each amount set forth above for the 1998, 1999, 2000 and
2001 fiscal years shall be increased, on a non-cumulative basis, by an amount
equal to 40% of Free Cash Flow generated in the immediately preceding fiscal
year.
9. DEFAULT
9.1. Events of Default
The following shall each constitute an "Event of Default"
hereunder:
(a) Any payment of principal on any Loan or any
reimbursement payment in respect of any Letter of Credit shall not be paid when
due and payable; or
(b) Any payment of interest on any Loan or of any Fee shall
not be paid when due and payable and such default shall continue unremedied for
a period of 5 Domestic Business Days after the same shall be due and payable; or
(c) The failure of a Borrower to observe any agreement
contained in Section 2.5; or
(d) The failure of the Company to observe or perform any
covenant or agreement contained in Sections 7.1, 7.10 or in Section 8; or
(e) The failure of the Company or any Borrower to observe or
perform any other covenant or agreement contained in this Agreement, and such
failure shall have continued unremedied for a period of 30 days after the
Company or any Borrower shall have become aware of such failure; or
(f) Any representation or warranty made in any Loan
Document, or made in any certificate, report, opinion (other than an opinion of
counsel) or other document delivered on or after the date hereof shall in any
such case prove to have been incorrect or misleading (whether because of
misstatement or omission) in any material respect when made; or
(g) (i) Obligations in an aggregate Consolidated amount in
excess of $2,500,000 of the Company and the Subsidiaries, (other than
obligations hereunder) whether as principal, guarantor, surety or other obligor,
for the payment of any Indebtedness or any net liability under interest rate
swap, collar, exchange or cap agreements, (A) shall become or shall be declared
to be due and payable prior to the expressed maturity thereof, or (B) shall not
be paid when due or within any grace period for the payment thereof, or (ii) any
holder of any such obligations shall have the right to declare the Indebtedness
evidenced thereby due and payable prior to its stated maturity; or
(h) The Company or any Subsidiary shall (i) suspend or
discontinue its business (except for store closings in the ordinary course of
business and except in connection with a permitted Disposition under Section 8.3
and as may otherwise be expressly permitted herein), or (ii) make an assignment
for the benefit of creditors, or (iii) generally not be paying its debts as such
debts become due, or (iv) admit in writing its inability to pay its debts as
they become due, or (v) file a voluntary petition in bankruptcy, or (vi) become
insolvent (however such insolvency shall be evidenced), or (vii) file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment of debt, liquidation or dissolution or similar relief
under any present or future statute, law or regulation of any jurisdiction
(including under any law applicable to insurance companies), or (viii) petition
or apply to any tribunal, or any other Governmental Authority, for any receiver,
custodian or any trustee for any substantial part of its Property, or (ix) be
the subject of any proceeding specified in clause (vii) or (viii) filed against
it which remains undismissed for a period of 60 consecutive days, or (x) file
any answer admitting or not contesting the material allegations of any such
petition filed against it, or of any order, judgment or decree approving such
petition in any such proceeding, or (xi) seek, approve, consent to, or acquiesce
in any such proceeding, or in the appointment of any trustee, receiver,
custodian, liquidator, or fiscal agent for it, or any substantial part of its
Property, or an order is entered appointing any such trustee, receiver,
custodian, liquidator or fiscal agent and such order remains unstayed and in
effect for 60 consecutive days, or (xii) take any formal action for the purpose
of effecting any of the foregoing (except as may otherwise be expressly
permitted herein); or
(i) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court or other
Governmental Authority having jurisdiction and continues unstayed and in effect
for a period of 60 consecutive days (i) adjudging the Company or any Subsidiary
bankrupt or insolvent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of, or in
respect of the Company or any Subsidiary under the United States bankruptcy laws
or any other applicable Federal or state law, or (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Company or any Subsidiary or of substantially all of the
Property of any thereof, or (iv) ordering the winding up or liquidation of the
affairs of the Company or any Subsidiary; or
(j) Judgments or decrees in an aggregate Consolidated amount
in excess of $2,500,000 against the Company and the Subsidiaries shall remain
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of 60 days; or
(k) After the Effective Date any Person, acting alone or
with a group of Persons (within the meaning of Section 13(d) of the Securities
Act of 1934, as amended) acting in concert, (i) shall have or acquire beneficial
ownership of securities (or options therefor) having 20% or more of the ordinary
voting power of the Company, or (ii) shall possess, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
Company, whether through the ownership of voting securities, by contract or
otherwise; or
(l) (i) Any Termination Event shall occur (x) with respect
to any Pension Plan (other than a Multiemployer Plan) or (y) with respect to any
other retirement plan subject to Section 302 of ERISA or Section 412 of the
Internal Revenue Code, which plan, during the five year period prior to such
Termination Event, was the responsibility in whole or in part of the Company,
any Subsidiary or any ERISA Affiliate, provided that this clause (y) shall only
apply if, in connection with such Termination Event, it is reasonably likely
that liability under Section 4069 of ERISA in an aggregate Consolidated amount
in excess of $1,000,000 will be imposed upon the Company, any Subsidiary or any
ERISA Affiliate; (ii) any Accumulated Funding Deficiency, whether or not waived,
in an aggregate Consolidated amount in excess of $1,000,000 shall exist with
respect to any Pension Plan with respect to any Pension Plan (other than a
Multiemployer Plan); (iii) any Person shall engage in any Prohibited Transaction
involving any Employee Benefit Plan; (iv) the Company, any Subsidiary or any
ERISA Affiliate shall fail to pay when due an amount which is payable by it to
the PBGC or to a Pension Plan (including a Multiemployer Plan) under Title IV of
ERISA; (v) the imposition of any tax under Section 4980(B)(a) of the Internal
Revenue Code; or (vi) the assessment of a civil penalty with respect to any
Employee Benefit Plan under Section 502(c) of ERISA; in each case, to the extent
such event or condition would have a Material Adverse effect; or
(m) A default shall occur under the Company Guaranty or the
Subsidiary Guaranty or if for any reason, after the execution and delivery
thereof, the Company Guaranty or the Subsidiary Guaranty is not in full force
and effect.
9.2. Remedies
(a) Upon the occurrence of an Event of Default or at any
time thereafter during the continuance of an Event of Default, the Agent, at the
written request of the Required Lenders, shall notify the Company (on behalf of
all Borrowers) that the Commitments, the Swing Line Commitment and the Letter of
Credit Commitment have been terminated and/or that all of the Loans and the
Reimbursement Obligations and all accrued and unpaid interest on any thereof and
all other amounts owing under the Loan Documents have been declared immediately
due and payable, provided that upon the occurrence of an Event of Default under
Section 9.1(h) or (i), the Commitments, the Swing Line Commitment and the Letter
of Credit Commitment shall automatically terminate and all of the Loans and the
Reimbursement Obligations and all accrued and unpaid interest on any thereof and
all other amounts owing under the Loan Documents shall become immediately due
and payable without declaration or notice. To the fullest extent not prohibited
by law, except for the notice provided for in the preceding sentence, each
Borrower expressly waives any presentment, demand, protest, notice of protest or
other notice of any kind in connection with the Loan Documents and its
obligations thereunder. To the fullest extent not prohibited by law, each
Borrower further expressly waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar law, now or at any time
hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of the Loan Documents.
(b) In the event that the Commitments, the Swing Line
Commitment and the Letter of Credit Commitment shall have been terminated or all
of the Loans and the Reimbursement Obligations shall have been declared due and
payable pursuant to the provisions of this Section, (i) the Company shall
forthwith deposit an amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the exclusive control of the Agent, and (ii)
the Agent, the Issuer and the Lenders agree, among themselves, that any funds
received from or on behalf of the Company under any Loan Document by the Issuer
or any Lender (except funds received by the Issuer or any Lender as a result of
a purchase from the Issuer or such Lender, as the case may be, pursuant to the
provisions of Section 12.9) shall be remitted to the Agent, and shall be applied
by the Agent in payment of the Loans, the Reimbursement Obligations and the
other obligations of the Credit Parties under the Loan Documents in the
following manner and order: (1) first, to reimburse the Agent, the Issuer and
the Lenders, in that order, for any expenses due from the Company and the
Borrowers pursuant to the provisions of Section 12.5 and the Reimbursement
Agreements, (2) second, to the payment of the Fees, (3) third, to the payment of
any expenses or amounts (other than the principal of and interest on the Loans
and the Reimbursement Obligations) payable by the Company and the Borrowers to
the Agent, the Issuer or any of the Lenders under the Loan Documents, (4)
fourth, to the payment, pro rata according to the outstanding principal balance
of the Loans and the Letter of Credit Exposure of each Lender, of interest due
on the Loans and the Reimbursement Obligations, (5) fifth, to the payment, pro
rata according to the sum of (A) the aggregate outstanding principal balance of
the Loans plus (B) the aggregate outstanding balance of the Reimbursement
Obligations, of the aggregate outstanding principal balance of the Loans and the
aggregate outstanding balance of the Reimbursement Obligations, and (6) sixth,
any remaining funds shall be paid to whosoever shall be entitled thereto or as a
court of competent jurisdiction shall direct.
(c) In the event that the Loans and the Reimbursement
Obligations shall have been declared due and payable pursuant to the provisions
of this Section 9.2, the Agent upon the written request of the Required Lenders,
shall proceed to enforce the Reimbursement Obligations and the rights of the
holders of the Loans by suit in equity, action at law and/or other appropriate
proceedings, whether for payment or the specific performance of any covenant or
agreement contained in the Loan Documents. In the event that the Agent shall
fail or refuse so to proceed, the Issuer and each Lender shall be entitled to
take such action as the Required Lenders shall deem appropriate to enforce its
rights under the Loan Documents.
10. THE AGENT
10.1. Appointment
Each Lender hereby irrevocably designates and appoints BNY
as the Agent of such Lender under the Loan Documents, and each Lender
irrevocably authorizes the Agent to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of the Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained in the Loan Documents,
the Agent shall not have any duties or responsibilities except those expressly
set forth in the Loan Documents, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Loan Documents or otherwise exist against the
Agent.
10.2. Delegation of Duties
The Agent may execute any of its rights or duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to rely upon the advice of counsel concerning all matters pertaining thereto,
and shall not be liable for any action taken or omitted to be taken in good
faith upon the advice of such counsel.
10.3. Exculpatory Provisions
None of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by the Agent or such Person under
or in connection with the Loan Documents (except the Agent for its own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any party contained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any of
the Loan Documents or for any failure of any Credit Party or any other Person to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire into the observance or performance of
any of the covenants or agreements contained in, or conditions of, the Loan
Documents, or to inspect the Property, books or records of the Company or any
Subsidiary. The Agent shall not be under any liability or responsibility to any
Credit Party or any other Person as a consequence of any failure or delay in
performance, or any breach, by any Lender of any of its obligations under any of
the Loan Documents. The Lenders acknowledge that the Agent shall not be under
any duty to take any discretionary action permitted under the Loan Documents
unless the Agent shall be requested in writing to do so by the Required Lenders.
10.4. Reliance by Agent
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, request, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, fax, telex or
teletype message, statement, order or other document or conversation reasonably
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
(including counsel to the Company), independent accountants and other experts
selected by the Agent. The Agent may treat each Lender, or the Person designated
in the last notice filed under Section 12.7, as the holder of all of the
interests of such Lender in its Loans until written notice of transfer, signed
by such Lender (or the Person designated in the last notice filed with the
Agent) and by the Person designated in such written notice of transfer, in form
and substance satisfactory to the Agent, shall have been filed with the Agent
and all requirements of Section 12.7 have been satisfied. The Agent shall not be
under any duty to examine or pass upon the validity, effectiveness or
genuineness of the Loan Documents or any instrument, document or communication
furnished pursuant thereto or in connection therewith, and the Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The Agent
shall be fully justified in failing or refusing to take any action not expressly
required under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under the
Loan Documents in accordance with a request of the Required Lenders or, if
required by Section 12.1, all Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Credit Parties, all
the Lenders and all future holders of the Loans.
10.5. Notice of Default
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default unless the Agent shall have
received written notice thereof from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating such notice
is a "Notice of Default." In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action or give such directions, or refrain from taking
such action or giving such directions, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the Lenders.
10.6. Non-Reliance
Each Lender expressly acknowledges that neither the Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender and that no
act by the Agent hereafter, including any review of the affairs of the Company
or the Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that
such Lender has, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own evaluation of and investigation into the business,
operations, Property, financial and other condition and creditworthiness of the
Company and the Subsidiaries and has made its own decision to enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking action under
the Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, Property, financial and other
condition and creditworthiness of the Company and the Subsidiaries. Each Lender
acknowledges that a copy of this Agreement and all exhibits and schedules hereto
have been made available to it and its individual counsel for review, and each
Lender acknowledges that it is satisfied with the form and substance thereof.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, Property, financial and other condition or
creditworthiness of the Company or the Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7. Indemnification
Each Lender agrees to indemnify the Agent in its capacity as
such (to the extent not promptly reimbursed by the Company and without limiting
the obligation of the Company to do so), pro rata according to (i) at any time
when no Loans are outstanding, its Commitment Percentage, or if no Commitments
then exist, its Commitment Percentage on the last day on which Commitments did
exist, and (ii) at any time when Loans are outstanding (x) if the Commitments
then exist, its Commitment Percentage or (y) if the Commitments have been
terminated or otherwise no longer exist, the percentage equal to the fraction
(A) the numerator of which is such Lender's share of the Aggregate Credit
Exposure and (B) the denominator of which is the Aggregate Credit Exposure, from
and against any and all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever, including any amounts paid to the Lenders by or for the account
of the Company pursuant to the terms of the Loan Documents that are subsequently
rescinded or avoided (or must otherwise be restored or returned), which may at
any time (including at any time following the payment of the Loans and the
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other document
contemplated by or referred to therein or the transactions contemplated thereby
or any action taken or omitted to be taken by the Agent under or in connection
therewith; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the gross negligence or willful misconduct of the Agent. The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable under the Loan Documents. If the Agent is subsequently
reimbursed by the Company for such amounts, the Agent shall remit to the Lenders
their pro rata shares of such reimbursement to the extent they previously paid
such amounts.
10.8. Agent in Its Individual Capacity
BNY and each Affiliate thereof, may make loans to, accept
deposits from, issue letters of credit for the account of and generally engage
in any kind of business with the Borrower and the Subsidiaries as though it were
not the Agent and BNYCMI did not arrange the transactions contemplated hereby.
With respect to the Commitment made or renewed by BNY, BNY shall have the same
rights and powers under the Loan Documents as any Lender and may exercise the
same as though it were not the Agent, the Issuer and the Swing Line Lender and
the term "Lender" shall include BNY.
10.9. Successor Agent
If at any time the Agent deems it advisable, in its sole
discretion, it may submit to each Lender a written notification of its
resignation as Agent under the Loan Documents, such resignation to be effective
on the earlier to occur of (a) the thirtieth day after the date of such notice,
and (b) the date upon which any successor to the Agent, in accordance with the
provisions of this Section, shall have accepted in writing its appointment as
successor Agent. Upon any such resignation, the Required Lenders shall have the
right to appoint from among the Lenders a successor Agent. If no such successor
Agent shall have been so appointed by the Required Lenders and accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which successor Agent shall be a commercial bank organized and
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
written acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall automatically become a party to this Agreement and
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent's rights,
powers, privileges and duties as Agent under the Loan Documents shall be
terminated. The Credit Parties and the Lenders shall execute such documents as
shall be necessary to effect such appointment. After any retiring Agent's
resignation as Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent. If at any time there shall not be a duly appointed and acting Agent, upon
notice duly given, the Credit Parties agree to make each payment when due under
the Loan Documents directly to the Lenders entitled thereto during such time.
11. GUARANTY OF THE COMPANY
In order to induce the Agent, the Issuing Bank and the Lenders to enter
into this Agreement, to make the Loans contemplated hereby and to issue and
participate in the Letters of Credit, the Company hereby agrees as follows:
11.1. Guaranty
The Company hereby absolutely, irrevocably and
unconditionally guarantees to the Agent, the Issuing Bank, the Swing Line Lender
and the Lenders the full and prompt payment when due, whether at stated
maturity, by acceleration, by mandatory prepayment, by notice of intention to
prepay or otherwise, of all obligations, now existing or hereafter arising, of
the Subsidiary Borrowers, including all principal and interest (whether accruing
before or after any event set forth in Sections 9.1(h) or (i) and whether or not
allowed) under this Agreement to which it is a party and whether direct,
indirect or contingent, incurred as primary obligor or otherwise, secured or
unsecured and all costs and expenses incurred by the Agent, the Issuing Bank,
the Swing Line Lender and the Lenders in enforcing any thereof, whether or not
suit is instituted (as the same may be amended, increased, modified, renewed,
refunded, extended, increased or refinanced from time to time, collectively, the
"Obligations"). Regardless of whether the Agent, the Issuing Bank, the Swing
Line Lender or the Lenders are prevented or otherwise hindered by law from
collecting or otherwise enforcing any of the Obligations in accordance with
their terms, whether as the result of the commencement of any bankruptcy or
similar proceedings against any of the Subsidiary Borrowers or otherwise, the
Agent, the Issuing Bank, the Swing Line Lender and the Lenders shall be entitled
to receive hereunder from the Company upon demand therefor the sums which would
have been otherwise due had such collection or enforcement not been prevented or
hindered.
11.2. Absolute Obligation
The obligations of the Company under this Guaranty shall be
absolute, irrevocable, unconditional and continuing until the Aggregate
Commitments have been terminated, the Swing Line Commitment has been terminated,
the Letter of Credit Commitment has been terminated, all Letters of Credit have
expired or otherwise terminated and all of the Obligations are indefeasibly paid
in full in cash and shall not be subject to any counterclaim, right or set-off
or any defense whatsoever. The Company acknowledges and agrees that the Agent,
the Issuing Bank, the Swing Line Lender and the Lenders have no responsibility
or liability, and shall not be deemed to have made any representation or
warranty, with respect to the validity, enforceability or collectibility of this
Agreement or any document executed or delivered in connection therewith, or any
preference or priority ranking with respect to the payment of the Obligations or
the validity or perfection of any security interest under any of this Agreement.
The Agent, the Issuing Bank, the Swing Line Lender and the Lenders shall have no
obligation to enforce this Agreement or any collateral security hereunder, by
any action, including, without limitation, making or perfecting any claim
against any of the Subsidiary Borrowers, prior to being entitled to the benefits
of this Guaranty. Nothing except the indefeasible cash payment in full of the
Obligations shall release the Company from liability under this Guaranty. The
Company hereby irrevocably and forever waives any right to succeed to any of the
rights of the Agent, the Issuing Bank, the Swing Line Lender and the Lenders
against the Subsidiary Borrowers under this Agreement, whether by way of
subrogation or otherwise until all Obligations have been indefeasibly paid in
full in cash.
11.3. Guaranty of Payment
This Guaranty is a guaranty of payment. The liability and
obligations of the Company shall be primary, direct and absolute, and the
Company hereby waives any right to require that resort be had by the Agent, the
Issuing Bank, the Swing Line Lender and the Lenders against any of the
Subsidiary Borrowers or any other Person, or to require that resort be had by
the Agent, the Issuing Bank, the Swing Line Lender and the Lenders to any direct
or indirect collateral security. The Agent may, at its option, proceed against
the Company in the first instance to enforce any obligation to collect any
monies, the payment of which is guaranteed hereby, without first proceeding
against any of the Subsidiary Borrowers or any other Person and without first
resorting to any other remedies, as the Agent may deem advisable. The liability
of the Company hereunder shall in no way be affected or impaired by any
acceptance by the Agent, the Issuing Bank, the Swing Line Lender or the Lenders
or any direct or indirect security for, or other guarantor upon, any
indebtedness, liability or obligation of the Subsidiary Borrowers to the Agent,
the Issuing Bank, the Swing Line Lender and the Lenders, or by any failure,
delay, neglect or omission of the Agent, the Issuing Bank, the Swing Line Lender
or any Lenders to realize upon or perfect any such security, indebtedness,
liability or obligation, or by any direct or indirect collateral security
therefor, or by the bankruptcy, reorganization or insolvency of, or by any other
proceeding for the relief of debtors commenced against, any of the Subsidiary
Borrowers or any other Person, or by the release, exchange, substitution or any
loss or impairment of any collateral security, or the liability of any other
Person in respect of the Obligations, including, without limitation, the release
of any other guarantor or any collateral security provided thereby, or by the
invalidity or unenforceability of this Agreement, or any of the Obligations
against any of the Subsidiary Borrowers for any reason, or by any amendment or
waiver of or any consent to or departure from this Agreement, or by any reason
or circumstance which might constitute a defense available to or a discharge of
any Subsidiary Borrower or the Company in its capacity as a guarantor,
including, without limitation, any defense of sovereign immunity or any similar
defense available to any Subsidiary Borrower or the Company under applicable
law, from any of its obligations (including, without limitation, in respect of
the Obligations), or by the fact that at any time or from time to time none of
the Obligations may be outstanding, or by the merger or consolidation of any
Subsidiary Borrower with any other Person, or by the dissolution or liquidation
of any Subsidiary Borrower, or by any law, rule, regulation or decree now or
hereafter in effect which might affect any of the terms or conditions of the
Obligations, or by the preference, priority ranking or collectibility of any of
the Obligations, or by the existence or exercise of any right of set-off by the
Agent, the Issuing Bank, the Swing Line Lender or any Lender, or by any other
reason whatsoever.
11.4. Repayment in Bankruptcy
If, at any time or times subsequent to the performance by
the Company of its obligations hereunder or the termination of this Guaranty,
the Agent, the Issuing Bank, the Swing Line Lender or any Lender shall be
required to repay any amounts previously paid by or on behalf of any of the
Subsidiary Borrowers in reduction of the Obligations under this Agreement by
virtue of an order of any court having jurisdiction in the premises, including,
without limitation, as a result of an adjudication that such amounts constituted
preferential payments or fraudulent conveyances, this Guaranty shall continue to
be effective, or shall be reinstated, as the case may be, all as though such
payments had not been made.
11.5. Other Provisions in Guaranty
(i) No failure by the Agent, the Issuing Bank, the Swing
Line Lender or any of the Lenders to exercise, and no delay by the Agent in
exercising, any right or remedy under this Agreement shall operate as a waiver
thereof.
(ii) The Company waives all errors or omissions of the
Agent, the Issuing Bank, the Swing Line Lender or any of the Lenders in
connection with the administration of this Agreement, the Letters of Credit and
any collateral security therefor, except errors or omissions which constitute
gross negligence or willful misconduct.
(iii) Without limiting the foregoing, the Company waives any
act or omission of the Agent, the Issuing Bank, the Swing Line Lender or any of
the Lenders which may affect or change in any way the liability of the Company
under this Guaranty.
(iv) This Guaranty shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Agent, the Issuing
Bank, the Swing Line Lender and the Lenders and their respective successors and
assigns, provided that the Company may not assign its obligations under this
Guaranty without the consent of all of the Lenders.
(v) Except as expressly provided in Section 9.1, the Company
hereby waives presentment, demand for payment, notice of default, non-
performance and dishonor, protest and notice of protest of or in respect of this
Agreement and the incurrence of the Obligations, and notice of acceptance of
this Guaranty and reliance hereupon by the Agent, the Issuing Bank, the Swing
Line Lender and the Lenders.
(vi) The Company agrees that this Guaranty shall
automatically extend, without any further action, to this Agreement and the
Obligations as the same may be amended, increased, extended, modified,
supplemented or waived from time to time in accordance with the terms hereof.
12. OTHER PROVISIONS
12.1. Amendments, Waivers, Etc.
With the written consent of the Required Lenders, the Agent
and the Credit Parties thereto may, from time to time, enter into written
amendments, supplements or modifications of the Loan Documents and, with the
written consent of the Required Lenders, the Agent on behalf of the Lenders may
execute and deliver to any such parties a written instrument waiving or
consenting to the departure from, on such terms and conditions as the Agent may
specify in such instrument, any of the requirements of the Loan Documents or any
Default or Event of Default and its consequences, provided that no such
amendment, supplement, modification, waiver or consent shall, without the
consent of all of the Lenders (i) increase the Commitment Amount of any Lender
(provided that no waiver of a Default or Event of Default shall be deemed to
constitute such an increase), (ii) extend the Commitment Period, (iii) reduce
the amount, or extend the time of payment, of the Fees, (iv) reduce the rate, or
extend the time of payment of, interest on any Loan, any Note or any
Reimbursement Obligation (other than the applicability of any post-default
increase in such rate of interest), (v) reduce the amount, or extend the time of
payment of any payment of any Reimbursement Obligation or principal on any Loan
or any Note, (vi) decrease or forgive the principal amount of any Loan, any Note
or any Reimbursement Obligation, (vii) consent to any assignment or delegation
by a Credit Party of any of its rights or obligations under any Loan Document to
which it is a party (except as expressly contemplated by Section 8.4), (viii)
release either Guaranty or any Guarantor thereunder, (ix) change the provisions
of this Section 12.1, (x) change the definition of Required Lenders, (xi) change
the several nature of the obligations of the Lenders, or (xii) change the
sharing provisions among Lenders. Notwithstanding the foregoing, no such
amendment, supplement, modification, waiver or consent shall (A) amend, modify
or waive any provision of Section 10 or otherwise change any of the rights or
obligations of the Agent, the Issuer or the Swing Line Lender under any Loan
Document without the written consent of the Agent, the Issuer or the Swing Line
Lender, as the case may be, (B) change the Letter of Credit Commitment, change
the amount or the time of payment of the Letter of Credit Commissions, or change
any other term or provision which relates to the Letter of Credit Commitment or
the Letters of Credit without the written consent of the Issuer or (C) change
the Swing Line Commitment, change the amount or the time of payment of the Swing
Line Loans or interest thereon or change any other term or provision which
relates to the Swing Line Commitment or the Swing Line Loans without the written
consent of the Swing Line Lender. Any such amendment, supplement, modification,
waiver or consent shall apply equally to each of the Lenders and shall be
binding upon the parties to the applicable Loan Document, the Lenders, the Agent
and all future holders of the Loans and the Reimbursement Obligations. In the
case of any waiver, the Credit Parties, the Lenders and the Agent shall be
restored to their former position and rights under the Loan Documents, but any
Default or Event of Default waived shall not extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
Notwithstanding anything to the contrary contained in this Section 12.1, the
Aggregate Commitment Amount and a Lender's Commitment Amount may be changed to
the extent provided in Section 2.13.
12.2. Notices
Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing and, if in writing, shall be deemed to have been duly given
or made (a) when delivered by hand, (b) one Domestic Business Day after having
been sent by overnight courier service at the cost of the sender, (c) five
Domestic Business Days after having been deposited in the mail, first-class
postage prepaid, or (d) in the case of fax notice, when sent, addressed as
follows in the case of the Company for itself and on behalf of each other Credit
Party, the Agent, the Issuer and the Swing Line Lender, and as set forth in
Exhibit A in the case of each of the Lenders, or to such other addresses as to
which the Agent may be hereafter notified by the respective parties hereto or
any future holders of the Notes:
The Company:
Linens 'n Things, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent, the Swing Line Lender and the Issuer:
in the case of each Borrowing Request, each notice of
prepayment under Section 2.7, each Letter of Credit
Request, each Competitive Bid Request, each
Competitive Bid, and each Competitive Bid
Accept/Reject Letter:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇,
Agency Function Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,6366 or 6367
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
in all other cases:
The Bank of New York
Retailing Industry Division
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
except that any notice, request or demand by a Borrower to or upon the Agent or
the Lenders pursuant to Sections 2.3, 2.4, 2.6, 2.7, 2.8, 2.9, 2.11, 2.13 or 3.3
shall not be effective until received. Any party to a Loan Document may rely on
signatures of the parties thereto which are transmitted by fax or other
electronic means as fully as if originally signed, provided that any notice of
Default or Event of Default and notices under Section 9.2 shall be required to
be given or made in accordance with clauses (a), (b) or (c) of this Section
12.2.
12.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the
part of the Agent, any Lender or the Issuer, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
12.4. Survival of Representations and Warranties
All representations and warranties made in the Loan
Documents and in any document, certificate or statement delivered pursuant
thereto or in connection therewith shall survive the execution and delivery of
the Loan Documents.
12.5. Payment of Expenses and Taxes; Indemnified Liabilities
The Company agrees, promptly upon presentation of a
statement or invoice therefor setting forth in reasonable detail the items
thereof, and whether any Loan is made or Letter of Credit is issued, (a) to pay
or reimburse the Agent and BNYCMI for all their reasonable costs and expenses
actually incurred in connection with the development, syndication, preparation
and execution of, and any amendment, waiver, consent, supplement or modification
to, the Loan Documents, any documents prepared in connection therewith and the
consummation of the transactions contemplated thereby, whether such Loan
Documents or any such amendment, waiver, consent, supplement or modification
thereto or any documents prepared in connection therewith are executed and
whether the transactions contemplated thereby are consummated, including the
reasonable fees and disbursements of Special Counsel, (b) to pay, indemnify, and
hold the Agent, the Lenders and the Issuer harmless from any and all recording
and filing fees and any and all liabilities and penalties with respect to, or
resulting from any delay (other than penalties to the extent attributable to the
negligence of the Agent, the Lenders or the Issuer, as the case may be, in
failing to pay such fees or other liabilities when due) in paying, stamp, excise
and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan
Documents and any such other documents, and (c) to pay, reimburse, indemnify and
hold the Agent, the Lenders and the Issuer and each of their respective
officers, directors and employees harmless from and against any and all other
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever (including reasonable counsel fees and disbursements of counsel
(including the allocated costs of internal counsel) and such local counsel as
may be required) actually incurred with respect to the enforcement, performance
of, and preservation of rights under, the Loan Documents (all the foregoing,
collectively, the "Indemnified Liabilities") and, if and to the extent that the
foregoing indemnity may be unenforceable for any reason, the Company agrees to
make the maximum payment permitted under applicable law; provided that the
Company shall have no obligation hereunder to pay Indemnified Liabilities to any
indemnified person under this Section arising from the gross negligence or
willful misconduct of such indemnified person. The agreements in this Section
shall survive the termination of the Commitments and the payment of the Loans
and the Notes and all other amounts payable under the Loan Documents.
12.6. Lending Offices
Each Lender shall have the right at any time and from time
to time to transfer any Loan to a different office of such Lender, subject to
Section 3.10.
12.7. Successors and Assigns
(a) The Loan Documents shall be binding upon and inure to
the benefit of the Credit Parties, the Lenders, the Agent, the Issuer, all
future holders of the Loans, the Notes and the Reimbursement Obligations and
their respective successors and assigns; provided that no Credit Party shall
assign, transfer or delegate any of its rights or obligations under the Loan
Documents to which it is a party without the prior consent of the Agent, the
Issuer and all of the Lenders.
(b) Notwithstanding Section 12.7(c), but subject to Section
12.7(e), each Lender may at any time assign all or any portion of its rights
under any Loan Document to any Federal Reserve Bank.
(c) In addition to its rights under Section 12.7(b), each
Lender shall have the right, at any time, upon written notice to the Agent of
its intent to do so, to sell, assign, transfer or negotiate (each an
"Assignment") all or any portion of all of its Loans, its Commitment and its
Notes, if any, and its interest in the Loan Documents to any subsidiary or
Affiliate of such Lender, to any other Lender or, with the prior written consent
of the Company, the Swing Line Lender and the Issuer (which consents shall not
be unreasonably withheld and shall not be required of the Company if, at the
time of such Assignment, an Event of Default shall exist), to any other bank,
insurance company, pension fund, mutual or other similar fund or other financial
institution, provided that (i) each such Assignment shall be of a constant, and
not varying, percentage of all of the assigning Lender's rights and obligations
under Loan Documents and be in a minimum amount of $5,000,000 (which minimum
amount shall not be applicable to an Assignment by a Lender to a subsidiary or
Affiliate of such Lender) or the full amount of such Lender's Commitment, and
(ii) the parties to each such Assignment (excluding a Credit Party if such
Credit Party is a party to such assignment) shall execute and deliver to the
Agent an Assignment and Acceptance Agreement, together with a fee (the
"Assignment Fee"), payable to the Agent, of $3,500, provided that no Assignment
Fee shall be payable with respect to an Assignment by a Lender to one or more of
its Affiliates. Upon receipt of each such executed Assignment and Acceptance
Agreement together with the Assignment Fee therefor, the Agent shall execute the
same and, in the event that either the assignee thereunder is a Lender (or a
subsidiary or Affiliate thereof) or the Company shall have consented to such
assignment (to the extent that such consent was not unreasonably withheld and is
required as aforesaid), (i) record the same and execute two copies of such
Assignment and Acceptance Agreement in the appropriate place, deliver one copy
to the assignor and one copy to the assignee, and (ii) request one or more of
the Borrowers, subject to Section 2.12(d), to execute and deliver (1) to such
assignee, one or more Notes, in an aggregate principal amount equal to the Loans
assigned to, and Commitment assumed by, such assignee, and (2) to such assignor,
in the event that such assignor shall retain any Loans and Commitment, one or
more Notes in an aggregate principal amount equal to the balance of such
assignor Lender's Loans and Commitment, in each case against receipt of such
assignor Lender's existing Note or Notes, as the case may be, appropriately
marked to indicate their substitution. Each Borrower agrees that it shall, upon
each such request of the Agent, execute and deliver such new Notes at its own
cost and expense. Upon such delivery, acceptance and recording by the Agent,
from and after the effective date specified in such Assignment and Acceptance
Agreement, the assignee thereunder shall be a party hereto and shall for all
purposes of the Loan Documents be deemed a "Lender" and, to the extent provided
in such Assignment and Acceptance Agreement, the assignor Lender thereunder
shall be released from its obligations under the Loan Documents.
(d) In addition to the participations provided for in
Section 12.9(b), each Lender may grant participations in all or any part of its
Loans, its Notes and its Commitment to one or more banks, insurance companies,
pension funds, mutual funds or other financial institutions, provided that (i)
such Lender's obligations under the Loan Documents shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties to the Loan
Documents for the performance of such obligations, (iii) the Borrowers, the
Agent, the Issuer and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents, no subparticipations shall be permitted and (v) the voting
rights of any holder of any participation shall be limited to decisions that in
accordance with Section 12.1 require the consent of all of the Lenders. The
Company acknowledges and agrees that any such participant shall for purposes of
Section 3.5, 3.6, 3.10 and 11.5 be deemed to be a "Lender", provided that in no
event shall the Company be liable for any amounts under said Sections in excess
of the amounts for which it would be liable but for such participation.
(e) No Lender shall, as between and among the Borrowers, the
Agent, the Issuer, the Swing Line Lender and such Lender, be relieved of any of
its obligations under the Loan Documents as a result of any assignment of or
granting of participations in, all or any part of its Loans, its Commitment and
its Notes, except that a Lender shall be relieved of its obligations to the
extent of any such assignment of all or any part of its Loans, its Commitment or
its Notes pursuant to Section 12.7(c).
12.8. Counterparts
Each of the Loan Documents (other than any Notes) may be
executed on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same agreement. It
shall not be necessary in making proof of any Loan Document to produce or
account for more than one counterpart signed by the party to be charged. A set
of the copies of this Agreement signed by all of the parties hereto shall be
lodged with each of the Company and the Agent. Any party to a Loan Document may
rely upon the signatures of any other party thereto which are transmitted by fax
or other electronic means to the same extent as if originally signed.
12.9. Set-off and Sharing of Payments
(a) In addition to any rights and remedies of the Lenders
and the Issuer provided by law, upon the occurrence of an Event of Default under
Section 9.1(a) or (b) or upon the acceleration of the payment of the Loans and
Reimbursement Obligations, each Lender and the Issuer shall have the right,
without prior notice to the Borrower, any such notice being expressly waived by
any Credit Party, to set-off and apply against any indebtedness or other
liability, whether matured or unmatured, of any Credit Party to such Lender or
the Issuer arising under the Loan Documents, any amount owing from such Lender
or the Issuer to such Credit Party. To the extent permitted by applicable law,
the aforesaid right of set-off may be exercised by such Lender or the Issuer
against a Credit Party or against any trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of such Credit Party, or against anyone else
claiming through or against such Credit Party or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receivers, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender or
the Issuer prior to the making, filing or issuance of, service upon such Lender
or the Issuer of, or notice to such Lender or the Issuer of, any petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender and the Issuer agree promptly to notify the applicable Credit Party
and the Agent after each such set-off and application made by such Lender or the
Issuer, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
(b) If any Lender or the Issuer (each a "Benefited Lender")
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of its Loans or its Notes or
the Reimbursement Obligations in excess of its pro rata share (in accordance
with the outstanding principal balance of all Loans or the Reimbursement
Obligations ) of payments then due and payable on account of the Loans and Notes
received by all the Lenders or the Reimbursement Obligations, such Lender or the
Issuer, as the case may be, shall forthwith purchase, without recourse, for
cash, from the other Lenders such participations in their Loans and Notes or the
Reimbursement Obligations as shall be necessary to cause such purchasing Lender
or the Issuer to share the excess payment with each of them according to their
pro rata share (in accordance with the outstanding principal balance of all
Loans or the Reimbursement Obligations), provided that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender or the
Issuer, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender or the Issuer the purchase price to the
extent of such recovery, together with an amount equal to such Lender's pro rata
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender or
the Issuer) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. Each Credit Party agrees
that any Lender or the Issuer so purchasing a participation from another Lender
pursuant to this Section may exercise such rights to payment (including the
right of set-off) with respect to such participation as fully as if such Lender
or the Issuer were the direct creditor of such Credit Party in the amount of
such participation.
12.10. Indemnity
Each Credit Party agrees to indemnify and hold harmless each
of the Agent, BNYCMI, the Issuer and each Lender from and against any loss,
cost, liability, damage or expense, including the reasonable fees and
disbursements of counsel (including the unallocated costs of internal counsel)
and such local counsel as may be required to represent the Agent, the Issuer and
each Lender actually incurred by the Agent, the Issuer or such Lender in
preparing for, defending against, or providing evidence, producing documents or
taking any other action in respect of, any litigation, administrative proceeding
or investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise, which is alleged
to arise out of or is based upon (1) any untrue statement or alleged untrue
statement of any material fact by or on behalf of any Credit Party, in any
document or schedule executed or filed with any Governmental Authority by or on
behalf of a Credit Party which relates to the transactions contemplated by the
Loan Documents, (2) any omission or alleged omission by or on behalf of a Credit
Party to state any material fact required to be stated in such document or
schedule, or necessary to make the statements made therein, in light of the
circumstances under which made, not misleading, (3) any acts, practices or
omissions or alleged acts, practices or omissions of a Credit Party or its
agents relating to the use of the proceeds of any Loan which is alleged to be in
violation of Section 2.5, or in violation of any federal securities law or of
any other statute, regulation or other law of any jurisdiction applicable
thereto, or (4) any Loan Document or any other document contemplated by or
referred to therein or the transactions contemplated thereby or any action taken
or omitted to be taken by the Agent, the Issuer or such Lender under or in
connection with any of the foregoing. Notwithstanding the above, no Credit Party
shall have any liability under clause (4) of this Section to indemnify or hold
harmless any Person for any loss, cost, liability, damage or expense relating to
income or withholding taxes or any tax in lieu of such taxes. The indemnity set
forth herein shall be in addition to any other obligations or liabilities of the
Credit Parties to the Agent, the Issuer and the Lenders under the Loan Documents
or at common law or otherwise, shall include the reasonable fees and
disbursements of counsel (including the unallocated costs of internal counsel)
and such local counsel as may be required in connection with establishing
liability under this Section or collecting amounts payable under this Section
and shall survive any termination of this Agreement, the expiration of the
Commitments and the payment of all indebtedness under the Loan Documents,
provided that no Credit Party shall have any liability under this Section to any
indemnified person with respect to indemnified liabilities which are determined
by a final and nonappealable judgment of a court of competent jurisdiction to
have arisen primarily from the gross negligence or willful misconduct of such
indemnified person.
12.11. Governing Law
The Loan Documents and the rights and obligations of the
parties thereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without regard to principles
of conflict of laws.
12.12. Severability
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
12.13. Integration
All exhibits to the Loan Documents shall be deemed to be a
part thereof. Each Loan Document embodies the entire agreement and understanding
between or among the parties thereto with respect to the subject matter thereof
and supersedes all prior agreements and understandings between or among the
parties thereto with respect to the subject matter thereof.
12.14. Treatment of Certain Information
Each Lender, the Issuer and the Agent agree (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and non-public information supplied by the Company pursuant
to this Agreement (a) which is identified by the Company as being confidential
at the time the same is delivered to such Lender, the Issuer or the Agent, or
(b) which constitutes any financial statement, financial projections or
forecasts, budget, compliance certificate, audit report, management letter or
accountants' certification delivered hereunder, or tax return or other tax
related information, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel to any Lender, the Issuer or to the Agent,
(iii) to bank examiners, auditors or accountants, (iv) to the Agent, the Issuer
or the Lenders, (v) in connection with any litigation to which any one or more
of the Lenders, the Issuer or the Agent is a party, or (vi) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
a confidentiality agreement containing substantially the same restrictions as
set forth in this Section.
12.15. Acknowledgments
Each Credit Party acknowledges that (a) it has been advised
by counsel in the negotiation, execution and delivery of the Loan Documents, (b)
by virtue of the Loan Documents, none of the Agent, the Issuer, or any Lender
has any fiduciary relationship to any Credit Party, and the relationship between
the Agent, the Issuer, and the Lenders, on the one hand, and the Credit Parties,
on the other hand, is solely that of debtor and creditor, and (c) by virtue of
the Loan Documents, no joint venture exists among the Lenders or among the
Credit Parties and the Lenders.
12.16. Consent to Jurisdiction
Each Credit Party irrevocably submits to the non-exclusive
jurisdiction of any New York State or Federal Court sitting in the City of New
York over any suit, action or proceeding arising out of or relating to the Loan
Documents. Each Credit Party irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. Each Credit Party agrees that a final judgment
in any such suit, action or proceeding brought in such a court, after all
appropriate appeals, shall be conclusive and binding upon it.
12.17. Service of Process
Each Credit Party agrees that process may be served against
it in any suit, action or proceeding referred to in Section 12.16 by sending the
same by first class mail, return receipt requested or by overnight courier
service, with receipt acknowledged, to the address of the Company on behalf of
such Credit Party set forth in Section 12.2. Each Credit Party agrees that any
such service (i) shall be deemed in every respect effective service of process
upon it in any such suit, action, or proceeding, and (ii) shall to the fullest
extent enforceable by law, be taken and held to be valid personal service upon
and personal delivery to it.
12.18. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver,
or amendment thereto shall affect the right of the Agent, the Issuer or any
Lender to serve process in any manner permitted by law or limit the right of the
Agent, the Issuer or any Lender to bring proceedings against a Credit Party in
the courts of any jurisdiction or jurisdictions.
12.19. WAIVER OF TRIAL BY JURY
THE AGENT, THE ISSUER, THE LENDERS AND EACH CREDIT PARTY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
FURTHER, EACH CREDIT PARTY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
THE AGENT, THE ISSUER, OR THE LENDERS, OR COUNSEL TO THE AGENT, THE ISSUER, OR
THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT, THE
ISSUER, OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. EACH CREDIT PARTY
ACKNOWLEDGES THAT THE AGENT, THE ISSUER, AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
12.20. Effective Date
This Agreement shall be effective at such time (the
"Effective Date") as the Agent shall have received executed counterparts hereof
by the parties hereto and the conditions set forth in Sections 5.1 through 5.4
have been or simultaneously will be satisfied, provided that this Agreement
shall not become effective unless all of such conditions are satisfied not later
than April 30, 1998.
AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Agreement to be
executed on its behalf.
LINENS 'N THINGS, INC.
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Treasurer
LNT, INC.
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Treasurer
THE BANK OF NEW YORK, in its
capacity as a Lender, as Issuer,
as the Swing Line Lender and in
its capacity as the Agent
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
CORESTATES BANK, N.A.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
BANKBOSTON, N.A.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
FLEET NATIONAL BANK
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
LINENS 'N THINGS EXHIBIT A
LIST OF COMMITMENTS, APPLICABLE LENDING OFFICES
AND ADDRESSES FOR NOTICES
A. LIST OF COMMITMENTS
Lender Commitment Amount
THE BANK OF NEW YORK $20,500,000
CORESTATES BANK, N.A. $16,500,000
THE FIRST NATIONAL BANK OF BOSTON $16,500,000
FLEET NATIONAL BANK $16,500,000
CREDIT SUISSE FIRST BOSTON $10,000,000
PNC BANK, NATIONAL ASSOCIATION $10,000,000
TOTAL $90,000,000
B. LIST OF APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
THE BANK OF NEW YORK
Applicable Lending Office for each Eurodollar Advance:
The Bank of New York
One ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Agency Function Administration
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366 or 6367
Applicable Lending Office for all other Advances:
The Bank of New York
One ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Agency Function Administration
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366 or 6367
Address for Notices:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇,
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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CORESTATES BANK, N.A.
Applicable Lending Office for each Eurodollar Advance:
Corestates Bank, N.A.
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Applicable Lending Office for all other Advances:
Corestates Bank, N.A.
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Address for Notices:
Corestates Bank, N.A.
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THE FIRST NATIONAL BANK OF BOSTON
Applicable Lending Office for each Eurodollar Advance:
The First National Bank of Boston
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Applicable Lending Office for all other Advances:
The First National Bank of Boston
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Address for Notices:
The First National Bank of Boston
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FLEET NATIONAL BANK
Applicable Lending Office for each Eurodollar Advance:
Fleet National Bank
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Applicable Lending Office for all other Advances:
Fleet National Bank
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Address for Notices:
Fleet National Bank
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CREDIT SUISSE FIRST BOSTON
Applicable Lending Office for each Eurodollar Advance:
Credit Suisse First Boston
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Credit Suisse First Boston
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Address for Notices:
Credit Suisse First Boston
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PNC BANK, NATIONAL ASSOCIATION
Applicable Lending Office for each Eurodollar Advance:
PNC Bank, National Association
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Applicable Lending Office for all other Advances:
PNC Bank, National Association
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Address for Notices:
PNC Bank, National Association
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LINENS 'N THINGS EXHIBIT B
FORM OF BORROWING REQUEST
[Date]
The Bank of New York, as Agent
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Attention: ______________,
Re: Credit Agreement, dated as of March 31, 1998, by and
among LINENS 'N THINGS, INC., a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party
thereto (each a "SUBSIDIARY BORROWER" and
collectively with the Company, the "BORROWERS"), the
Lenders party thereto and THE BANK OF NEW YORK, as
Agent (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 2.3 of the Credit Agreement, the Company
on behalf of each applicable Borrower signatory hereto hereby gives notice of
intention to borrow Revolving Credit Loans in the aggregate sum of $____________
on ____________, and/or a Swing Line Loan in the sum of $____________ on
____________, which borrowing shall consist of the following:
Type:
(ABR, Eurodollar Interest
Borrower or Swing Line) Amount Period
The Company (on behalf of itself and all Borrowers) hereby
certifies that on the date hereof and on the Borrowing Date set forth above, and
after giving effect to the Loans requested hereby:
(a) Each Credit Party is and shall be in compliance with all
of the terms, covenants and conditions of each Loan Document.
(b) There exists and there shall exist no Default or Event of
Default.
(c) The representations and warranties contained in the Credit
Agreement are and shall be true and correct, except those which are expressly
specified to be made as of an earlier date.
IN EVIDENCE of the foregoing, the undersigned has caused this Borrowing
Request to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By: ________________________
Name: ______________________
Title: _______________________
[------------------------]
By: ________________________
Name: ______________________
Title: _______________________
LINENS 'N THINGS EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
[Date]
The Bank of New York, as Agent
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Attention: ______________,
Re: Credit Agreement, dated as of March 31, 1998, by and
among LINENS 'N THINGS, INC., a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party
thereto, the Lenders party thereto and THE BANK OF
NEW YORK, as Agent (as amended, supplemented or
otherwise modified from time to time, the "CREDIT
AGREEMENT")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 2.8(b) of the Credit Agreement, the
Company, on behalf of [itself/_____________], as account party (the "Account
Party"), hereby requests the Issuer to issue a Letter of Credit for the account
of the Account Party and for the benefit of ______________________ on
____________ in connection with ___________________________ in the maximum
amount of $_______________. A drawing may be made under such Letter of Credit
under the following conditions:
The Company (on behalf of itself and all Borrowers) hereby
certifies that on the date hereof and on the above requested date of issuance of
such Letter of Credit, and after giving effect to the issuance of such Letter of
Credit:
(a) The Account Party is a Borrower.
(b) Each Credit Party is and shall be in compliance with all
of the terms, covenants and conditions of each Loan Document.
(c) There exists and there shall exist no Default or Event of
Default.
(d) The representations and warranties contained in the Credit
Agreement are and shall be true and correct, except those which are expressly
specified to be made as of an earlier date.
IN EVIDENCE of the foregoing, the undersigned has caused this Letter of
Credit Request to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By:
Name:
Title:
[------------------]
By:
Name:
Title:
LINENS 'N THINGS EXHIBIT D
FORM OF BORROWER ADDENDUM
BORROWER ADDENDUM, dated as of ________, 199_, made by
___________, a corporation organized under the laws of __________ (the "NEW
BORROWER") and LINENS 'N THINGS, INC., a Delaware corporation (the "COMPANY"),
to THE BANK OF NEW YORK, as agent (the "AGENT") under the Credit Agreement,
dated as of March 31, 1998, among the Company, the Subsidiary Borrowers party
thereto, the Lenders party thereto and the Agent (as the same may from time to
time be amended, supplemented or otherwise modified, the "CREDIT AGREEMENT").
I. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
II. The Company desires to designate the New Borrower as a
Subsidiary Borrower pursuant to Section 2.11 of the Credit Agreement and the New
Borrower desires to become a Subsidiary Borrower pursuant thereto. The New
Borrower is a wholly-owned domestic Subsidiary and a Subsidiary Guarantor.
Accordingly, the Company and the New Borrower agree as
follows:
A. The Company represents that no Default or Event of Default
has occurred and is continuing.
B. Pursuant to Section 2.11 of the Credit Agreement the
Company hereby designates the New Borrower as a Subsidiary Borrower under the
Credit Agreement and the New Borrower agrees that upon the acceptance hereof by
the Agent, the New Borrower (i) shall be, and shall be deemed to be, a
"Subsidiary Borrower" under, and as such term is defined in, the Credit
Agreement with the same force and effect as if originally named therein as a
Subsidiary Borrower and (ii) shall have made, and shall be deemed to have made,
the representations and warranties as to itself contained in Section 4 of the
Credit Agreement.
C. There is submitted herewith by the New Borrower the
certificate required by Section 2.11 of the Credit Agreement together with the
required attachments thereto.
D. The New Borrower hereby designates the following address as
its address for notices:
----------------------
----------------------
Attention: ___________
Telephone: (___) ___-____
Fax: (___) ___-____.
E. This Borrower Addendum shall be governed by and construed
in accordance with the laws of the State of New York without regard to conflicts
of laws rules.
AS EVIDENCE OF THE FOREGOING, this Borrower Addendum has been
executed and delivered as of the day and year first above written.
[NAME OF NEW BORROWER]
By:-----------------------------------
Name:----------------------------------
Title:----------------------------------
LINENS 'N THINGS, INC.
By:----------------------------------
Name:---------------------------------
Title:---------------------------------
ACCEPTED:
THE BANK OF NEW YORK, as
Agent
By:-----------------------
Name:---------------------
Title:--------------------
LINENS 'N THINGS EXHIBIT E
FORM OF OPINION OF
SPECIAL COUNSEL TO THE AGENT
____________, 1998
TO THE LENDERS PARTY TO THE CREDIT
AGREEMENT (AS DEFINED BELOW)
Re: Credit Agreement, dated as of March 31, 1998, by and among
LINENS 'N THINGS, INC., a Delaware corporation (the
"COMPANY"), the Subsidiary Borrowers party thereto, the
Lenders party thereto and THE BANK OF NEW YORK (the "Credit
Agreement")
We have acted as Special Counsel to the Agent in connection with the
Credit Agreement. Capitalized terms used herein that are not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
We have examined originals or copies certified to our satisfaction of
the documents required to be delivered pursuant to the provisions of Section 5
of the Credit Agreement. In conducting such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to originals of all documents submitted to us
as copies.
Based upon the foregoing examination, and (1) assuming with your
permission the accuracy of the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, counsel to the Credit
Parties, and (2) relying with your permission upon the representations and
warranties of the Company (on behalf of itself and all Borrowers) contained in
the Credit Agreement, we are of the opinion that all legal preconditions to the
effectiveness of the Credit Agreement have been satisfactorily met.
This opinion is rendered solely for your benefit in connection with the
transactions referred to herein and may not be relied upon by any other Person.
We express no opinion as to laws other than the laws of the State of
New York and the federal laws of the United States of America.
Very truly yours,
LINENS 'N THINGS EXHIBIT F
OUTLINE OF OPINIONS OF COUNSEL TO THE CREDIT PARTIES
In connection with the Credit Agreement, dated as of March 31,
1998, by and among LINENS 'N THINGS, INC. (the "COMPANY"), the Subsidiary
Borrowers party thereto (each a "SUBSIDIARY BORROWER" and collectively with the
Company, the "BORROWERS"), the Lenders party thereto and THE BANK OF NEW YORK,
as Agent (the "CREDIT AGREEMENT"), set forth below is an outline of the opinion
to be delivered to the Agent and the Lenders by counsel to the Credit Parties,
such opinion, including all qualifications, assumptions and exceptions, to be in
all respects satisfactory to the Agent (the "Opinion").
Capitalized terms used in the Opinion and which are not
defined therein shall have the meanings ascribed thereto in the Credit
Agreement.
Opinions
1. Existence and Power
Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (except, in the case of the Subsidiaries, where the
failure to be in such good standing could not reasonably be expected to have a
Material Adverse effect), has all requisite corporate power and authority to own
its Property and to carry on its business as now conducted, and is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real Property or in which the nature of
its business requires it to be so qualified (except those jurisdictions where
the failure to be so qualified or to be in good standing could not reasonably be
expected to have a Material Adverse effect).
2. Authority
Each Credit Party has full corporate power and authority to
enter into, execute, deliver and perform the terms of the Loan Documents to
which it is a party, all of which have been duly authorized by all proper and
necessary corporate action and are not in contravention of any applicable law or
the terms of its Certificate of Incorporation and By-Laws. No consent or
approval of, or other action by, shareholders of any Credit Party, any
Governmental Authority, or any other Person (which has not already been
obtained) is required to authorize in respect of such Credit Party, or is
required in connection with the execution, delivery and performance by such
Credit Party of the Loan Documents to which it is a party, or is required as a
condition to the enforceability against such Credit Party of the Loan Documents
to which it is a party.
3. Binding Agreement
The Loan Documents to which it is a party constitute the valid
and legally binding obligations of each Credit Party, enforceable in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by equitable
principles relating to the availability of specific performance as a remedy.
4. Litigation
To the best of [MY/OUR] knowledge, there are no actions,
suits, arbitration proceedings or claims (whether purportedly on behalf of the
Company or any Subsidiary or otherwise) pending or threatened against the
Company or any Subsidiary or any of its respective Properties, or maintained by
the Company or any Subsidiary, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material Adverse effect.
To the best of [MY/OUR] knowledge, there are no proceedings pending or
threatened against the Company or any Subsidiary (a) which call into question
the validity or enforceability of, or otherwise seek to invalidate any Loan
Document, or (b) which might, individually or in the aggregate, materially and
adversely affect any of the transactions contemplated by any Loan Document.
5. No Default
To the best of [MY/OUR] knowledge, neither the Company nor any
Subsidiary is in default under any agreement to which it is a party or by which
it or any of its Property is bound the effect of which could reasonably be
expected to have a Material Adverse effect. No notice to, or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by any Credit Party of the Loan Documents to which it is a party.
6. No Conflicting Laws or Agreements
No provision of any existing statute, rule, regulation, or, to
the best of [MY/OUR] knowledge, any existing material mortgage, material
indenture, material contract, material agreement, judgment, decree or order
binding on the Company or any Subsidiary or affecting the Property of the
Company or any Subsidiary conflicts with, or requires any consent which has not
already been obtained under, or would in any way prevent the execution, delivery
or performance by any Credit Party of the terms of, any Loan Document to which
it is a party. To the best of [MY/OUR] knowledge, the execution, delivery and
performance by each Credit Party of the terms of each Loan Document to which it
is a party will not constitute a default under, or result in the creation or
imposition of, or obligation to create, any Lien upon the Property of any Credit
Party pursuant to the terms of any such mortgage, indenture, contract or
agreement.
7. Compliance with Applicable Laws; Filings
To the best of [MY/OUR] knowledge, neither the Company nor any
Subsidiary is in default with respect to any judgment, order, writ, injunction,
decree or decision of any Governmental Authority which default could reasonably
be expected to have a Material Adverse effect. To the best of [MY/OUR]
knowledge, the Company and each Subsidiary is complying with all applicable
statutes, rules and regulations of all Governmental Authorities, a violation of
which could reasonably be expected to have a Material Adverse effect. To the
best of [MY/OUR] knowledge, the Company and each Subsidiary has filed or caused
to be filed with all Governmental Authorities all reports, applications,
documents, instruments and information required to be filed pursuant to all
applicable laws, rules, regulations and requests which, if not so filed, could
reasonably be expected to have a Material Adverse effect.
8. Governmental Regulations
Neither the Company nor any Subsidiary nor any corporation
controlling the Company or any Subsidiary or under common control with the
Company or any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, or is subject to any statute or regulation which
regulates the incurrence of Indebtedness.
9. Federal Reserve Regulations; Use of Loan Proceeds
No Credit Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System, as amended. If used in
accordance with Section 2.4 of the Credit Agreement, no part of the proceeds of
the Loans or the Letters of Credit has been or will be used, directly or
indirectly, to purchase, acquire or carry any Margin Stock or for a purpose
which violates any law, rule or regulation of any Governmental Authority,
including, without limitation, the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System, as amended.
LINENS 'N THINGS EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Assignment and Acceptance Agreement (as the same may be amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), dated
as of ____________, by and between ____________ (the "ASSIGNOR") and
____________ (the "ASSIGNEE").
RECITALS
I. Reference is made to the Credit Agreement, dated as of March 31,
1998, by and among LINENS 'N THINGS, INC., a Delaware corporation (the
"COMPANY"), the Subsidiary Borrowers party thereto, the Lenders party thereto
and THE BANK OF NEW YORK, as Agent (the "AGENT") (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT").
II. The Assignor wishes to assign and delegate to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, some or all of the
Assignor's rights and obligations under the Loan Documents upon the terms, and
subject to the conditions, contained herein.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor and the Assignee
hereby agree as follows:
1. Defined Terms
(a) Each capitalized term used herein that is not defined
herein shall have the meaning ascribed thereto in the Credit Agreement.
(b) When used in this Agreement, each of the following
capitalized terms shall have the meaning ascribed thereto unless the context
hereof otherwise specifically requires:
"ASSIGNED PERCENTAGE": _____%.
"ASSIGNMENT EFFECTIVE DATE": as defined in Section 5.
"ASSIGNOR RIGHTS AND OBLIGATIONS": as of the Assignment
Effective Date, the Assigned Percentage of all of the Assignor's rights and
obligations under the Loan Documents, including, without limitation, such
percentage of its Revolving Credit Loans, Competitive Bid Loans, [,SWING LINE
LOANS] and its Commitment.
"PURCHASE PRICE": an amount equal to the Assigned Percentage
of the aggregate unpaid principal amount of the Assignor's Revolving Credit
Loans, Competitive Bid Loans, [AND SWING LINE LOANS] as of the Assignment
Effective Date.
2. Assignment; Payment by Assignee
The Assignor hereby assigns and delegates to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, without recourse
or, except as otherwise specifically provided herein, representation or
warranty, the Assignor Rights and Obligations. The Assignee agrees to pay to the
Assignor the Purchase Price on the Assignment Effective Date.
3. Representations and Warranties
(a) Assignor. The Assignor hereby represents and warrants to
the Assignee as follows:
(i) the aggregate unpaid principal amount of its Revolving
Credit Loans is $___________, and such Revolving Credit Loans are
composed of the following ABR Advances and Eurodollar Advances: (1) ABR
Advances: $__________, and (2) Eurodollar Advances: (A) $__________ for
[LENGTH OF INTEREST PERIOD], the last day of which is _______________,
(B) $__________ for [LENGTH OF INTEREST PERIOD], the last day of which
is _______________,
[(ii) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ITS SWING LINE
LOANS IS $___________, AND SUCH SWING LINE LOANS ARE COMPOSED OF THE
FOLLOWING: (A) $__________ FOR [LENGTH OF SWING LINE INTEREST PERIOD],
THE LAST DAY OF WHICH IS _______________, (B) $__________ FOR [LENGTH
OF SWING LINE INTEREST PERIOD], THE LAST DAY OF WHICH IS
_______________,]
(iii) the aggregate unpaid principal amount of its Competitive
Bid Loans is $_________, and such Competitive Bid Loans are composed of
the following: (A) $__________ for [LENGTH OF COMPETITIVE INTEREST
PERIOD], the last day of which is _______________, (B) $__________ for
[LENGTH OF COMPETITIVE INTEREST PERIOD], the last day of which is
_______________, and
(iv) its Commitment Amount is $_______, and
(v) it is the legal and beneficial owner of the Assignor
Rights and Obligations free and clear of any adverse claim created by
it.
(b) Assignee. The Assignee hereby represents and warrants to
the Assignor that (i) it is legally authorized to enter into this Agreement,
(ii) it is an "accredited investor" within the meaning of Regulation D, as
amended, promulgated under the Securities Act of 1933, as amended, [AND] (iii)
it has, independently and without reliance upon the Assignor or the Agent, and
based on such documents and information as it has deemed appropriate, made its
own evaluation of, and investigation into, the business, operations, Property,
financial and other condition and creditworthiness of the Borrowers and made its
own decision to enter into this Agreement [, AND (IV) IT IS A LENDER OR A
SUBSIDIARY OR AFFILIATE OF A LENDER].
4. Covenants of the Assignee
The Assignee hereby covenants and agrees that it will,
independently and without reliance upon the Assignor or the Agent, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, evaluations and decisions in taking or
not taking action under the Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, Property,
financial and other condition and creditworthiness of the Borrowers. The
Assignee further agrees to provide to the Agent any forms required by Section
3.10 of the Credit Agreement and any administrative questionnaire reasonably
required by the Agent.
5. Effectiveness of this Agreement
(a) Section 2 of this Agreement shall not become effective
until such date (the "ASSIGNMENT EFFECTIVE DATE") as all of the following
conditions shall have been fulfilled:
(i) The Agent shall have executed a copy of this Agreement and
shall have received duly executed counterparts hereof by each of the
Assignor, the Assignee and, if required by the Credit Agreement, the
Issuer, the Swing Line Lender and the Company;
(ii) The Assignor shall have delivered to the Assignee (with a
copy to the Agent) a duly completed letter in the form of Annex A
hereto;
(iii) The Assignee shall have confirmed in writing to the
Assignor (with a copy to the Agent) that, on or before the Assignment
Effective Date, it shall have transferred (in accordance with Section 6
hereof) the Purchase Price to the Assignor. At the time of such
confirmation, the Assignee shall be deemed to have remade the
representations and warranties contained in Section 3(b)(i), (ii) [AND]
(iii) [, AND (IV)] hereof on and as of the date of such confirmation;
(iv) The Agent shall have received an assignment fee, for its
account, in the amount of $3,500 if required to be paid by the Credit
Agreement; and
(v) The Agent shall have received any forms required by
Section 3.10 of the Credit Agreement and any administrative
questionnaire reasonably required by the Agent.
(b) Upon the Assignment Effective Date, (i) the Agent shall
record the assignment contemplated hereby, (ii) the Assignee shall be a Lender,
and (iii) the Assignor, to the extent of the assignment provided for herein,
shall be released from its obligations under the Loan Documents.
(c) The Assignee hereby appoints and authorizes the Agent to
take such action, on and after the Assignment Effective Date, as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.
(d) From and after the Assignment Effective Date, the Agent
shall make all payments in respect of the interest assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee. The
Assignor and the Assignee shall make all appropriate adjustments with respect to
amounts under the Loan Documents which accrued prior to the Assignment Effective
Date and which were paid thereafter, directly between themselves.
6. Payment Instructions
All payments to be made to the Assignor by the Assignee
hereunder shall be made by wire transfer of immediately available funds to the
Assignor at: [WIRE INSTRUCTIONS].
7. Notices
All notices, requests and demands to or upon the Assignee in
connection with this Agreement and the Loan Documents are to be sent or
delivered to the place set forth adjacent to its name on the signature page(s)
hereof.
8. Miscellaneous
(a) For purposes of this Agreement, all calculations and
determinations with respect to the outstanding principal amount of the
Assignor's Loans, the Assignor's Commitment Amount and all other similar
calculations and determinations, shall be made and shall be deemed to be made as
of the commencement of business on the date of such calculation or
determination, as the case may be.
(b) Section headings have been inserted herein for convenience
only and shall not be construed to be a part hereof.
(c) This Agreement embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all other prior arrangements and understandings among the parties
hereto with respect to the subject matter hereof.
(d) This Agreement may be executed in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same agreement. It shall not be necessary in making proof
of this Agreement to produce or account for more than one counterpart signed by
the party to be charged.
(e) Every provision of this Agreement is intended to be
severable, and if any term or provision hereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions hereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
(f) This Agreement shall be binding upon and inure to the
benefit of the Assignor and the Assignee and their respective successors and
permitted assigns, except that neither party may assign or transfer any of its
rights or obligations hereunder (i) without the prior written consent of the
other party or (ii) in contravention of the Credit Agreement.
(g) This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York without regard to
principles of conflicts of law.
AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Agreement to be
duly executed on its behalf.
[NAME OF ASSIGNOR]
By: ______________________
Name: ____________________
Title: ___________________
[NAME OF ASSIGNEE]
Address for notices:
____________________ By: ______________________
____________________ Name: ____________________
____________________ Title: ___________________
Attention:__________
Telephone:_____________
Facsimile:_____________
Consented to this __ day
of __________, ____
THE BANK OF NEW YORK, as Issuer
and Swing Line Lender
By: ___________________________
Name: _________________________
Title: ________________________
[CONSENTED TO THIS __ DAY
OF __________, ____
LINENS 'N THINGS, INC.
BY: ____________________________
NAME: __________________________
TITLE: _________________________]
Accepted this __ day
of _________, ____
THE BANK OF NEW YORK, as Agent
By: ___________________________
Name: _________________________
Title: ________________________
ANNEX A TO ASSIGNMENT AND
ACCEPTANCE AGREEMENT
FORM OF LETTER
[Assignment Effective Date]
[Name and Address of Assignee]
Attention: _______________,
Re: Assignment and Acceptance Agreement, dated as of
_______________, by and between _______________ and
_______________ (as the same may be amended, supplemented
or otherwise modified from time to time, the "AGREEMENT")
Ladies and Gentlemen:
This letter is being delivered pursuant to Section 5(a)(ii) of
the Agreement. Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Agreement.
The Assignor hereby represents and warrants to the Assignee as
follows:
(i) the aggregate unpaid principal amount of its Revolving
Credit Loans is $___________, and such Revolving Credit Loans are
composed of the following ABR Advances and Eurodollar Advances: (1) ABR
Advances: $_________, and (2) Eurodollar Advances: (A) $__________ for
[LENGTH OF INTEREST PERIOD], the last day of which is _______________,
(B) $__________ for [LENGTH OF INTEREST PERIOD], the last day of which
is _______________,
[(ii) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ITS SWING LINE
LOANS IS $___________, AND SUCH SWING LINE LOANS ARE COMPOSED OF THE
FOLLOWING: (A) $__________ FOR [LENGTH OF SWING LINE INTEREST PERIOD],
THE LAST DAY OF WHICH IS _______________, (B) $__________ FOR [LENGTH
OF SWING LINE INTEREST PERIOD], THE LAST DAY OF WHICH IS
_______________,]
(iii) the aggregate unpaid principal amount of its Competitive
Bid Loans is $_________, and such Competitive Bid Loans are composed of
the following: (A) $__________ for [LENGTH OF COMPETITIVE INTEREST
PERIOD], the last day of which is _______________, (B) $__________ for
[LENGTH OF COMPETITIVE INTEREST PERIOD], the last day of which is
_______________, and
(iv) its Commitment Amount is $_______, and
(v) it is the legal and beneficial owner of the Assignor
Rights and Obligations free and clear of any adverse claim created by
it.
Very truly yours,
[NAME OF ASSIGNOR]
By: _____________________
Name: ___________________
Title: ____________________
cc: [Name and title
of Agent contact]
LINENS 'N THINGS EXHIBIT H
FORM OF INCREASE SUPPLEMENT
INCREASE SUPPLEMENT, dated as of ______ __, 199_, to the Credit
Agreement, dated as of March 31, 1998, by and among Linens 'N Things, the
"BORROWER"), the Subsidiary Borrowers party thereto, the Lenders party thereto
and The Bank of New York, as Agent (as the same may be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"). Capitalized terms
used herein that are defined in the Credit Agreement shall have the meanings
therein defined.
1. Pursuant to Section 2.13 of the Credit Agreement, the Borrower
hereby proposes to increase (the "INCREASE") the Aggregate Commitment Amount
from $___________ to $____________.
2. Each of the following Lenders has been invited by the Borrower, and
is ready, willing and able to increase its Commitment Amount as follows:
Commitment Amount
(after giving effect
Name of Lender to the Increase)
-------------- $----------
-------------- $----------.
3. Each of the following proposed institutions has been invited by the
Borrower, and is ready, willing and able to become a "Lender" and assume a
Commitment Amount under the Credit Agreement as follows:
Name of
proposed institution Commitment Amount
-------------- $----------
-------------- $----------.
4. The proposed effective date for the Increase is [Date].
5. The Borrower hereby represents and warrants to the Agent, each
Lender and each such proposed institution that (i) immediately before and after
giving effect to the Increase no Default exists or would exist and (ii)
immediately after giving effect thereto, the Aggregate Commitment Amount shall
not have been increased pursuant to Section 2.3(f) of the Credit Agreement in an
aggregate amount greater than $125,000,000.
6. Pursuant to Section 2.13 of the Credit Agreement, by execution and
delivery of this Supplement, together with the satisfaction of all of the other
requirements set forth in Section 2.13, each undersigned Lender and proposed
institution (i) shall have, on and as of the effective date of the Increase, a
Commitment Amount equal to the amount set forth above next to its name and (ii)
in the event it is a proposed institution, shall be, and shall be deemed to be,
a "Lender" under, and as such term is defined in, the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Increase Supplement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
LINENS 'N THINGS, INC.
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
THE BANK OF NEW YORK, [AS ISSUER AND] as Agent
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
[EXISTING LENDER INCREASING ITS COMMITMENT AMOUNT]
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
[PROPOSED INSTITUTION]
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
LINENS 'N THINGS EXHIBIT I
FORM OF SUBSIDIARY GUARANTY AND SUBORDINATION AGREEMENT
SUBSIDIARY GUARANTY AND SUBORDINATION AGREEMENT (as the same
may be amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"), dated as of March 31, 1998, by and among the Persons listed on
Annex A attached hereto (the "CURRENT GUARANTORS"), such other Persons which
from time to time may hereafter become party hereto pursuant to Section 9 hereof
(the "ADDITIONAL GUARANTORS", and collectively with the Current Guarantors, the
"GUARANTORS"), LINENS 'N THINGS, INC., a Delaware corporation (the "COMPANY"),
and THE BANK OF NEW YORK (the "AGENT"), in its capacity as agent for the Lenders
under the Credit Agreement referred to below.
RECITALS
I. Reference is made to the Credit Agreement, dated as of the date
hereof, by and among the Company, the Subsidiary Borrowers party thereto (each a
"SUBSIDIARY BORROWER" and together with the Company, the "BORROWERS"), the
Lenders party thereto and the Agent (as the same may from time to time be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT").
II. The Company and the Guarantors have been, and are now, engaged in
the business of retail sales. In the past, as now, the Company, directly or
indirectly, has provided financing for the Guarantors and the Guarantors have
relied upon the Company to provide such financing. In addition, it is
anticipated that, if the Guarantors execute and deliver this Agreement, the
Company will continue, directly or indirectly, to provide such financing to the
Guarantors, and that the proceeds of the Loans to be made and Letters of Credit
to be issued will be used, in part, for the general working capital purposes of
the Guarantors. Pursuant to the Credit Agreement, the Lenders will not make
Loans and the Issuer will not issue Letters of Credit unless and until the
Guarantors shall have executed and delivered this Agreement and, therefore, in
light of all of the foregoing, each Guarantor expects to derive substantial
benefit from the Credit Agreement and the transactions contemplated thereby and,
in furtherance thereof, has agreed to execute and deliver this Agreement.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors, the Company and
the Agent hereby agree as follows:
1. Defined Terms
(a) Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
(b) When used in this Agreement, the following capitalized
terms shall have the respective meanings ascribed thereto as follows:
"BORROWER OBLIGATIONS": all of the obligations and
liabilities of the Borrowers under the Loan Documents, in each case whether
direct, indirect or contingent, incurred as primary obligor or otherwise,
secured or unsecured, now existing or hereafter arising, created, assumed,
incurred or acquired, and whether before or after the occurrence of any
Insolvency Event, and including, without limitation, (i) any obligation or
liability in respect of any breach of any representation or warranty and in
respect of any rights of redemption or rescission, and (ii) all principal and
interest (including all post-petition interest), funding losses, make-whole
premiums and all reasonable costs and expenses of the Agent and the Lenders in
enforcing, preserving and protecting any thereof, whether or not suit is
instituted and whether or not allowed as a claim in any proceeding arising in
connection with an Insolvency Event (as the same may be amended, increased,
modified, renewed, refinanced, refunded or extended from time to time).
"CONSIDERATION": as of any date of determination and
with respect to each Guarantor, an amount equal to the lesser of (i) the total
"value" (within the meaning of Section 548 of the Bankruptcy Code) given,
directly or indirectly, to such Guarantor during the period commencing on the
date such Guarantor became a party to this Agreement and ending on such date of
determination, in exchange for its execution and delivery of this Agreement, and
(ii) the amount of "fair consideration" (within the meaning of Article 10 of the
New York Debtor Creditor Law) given, directly or indirectly, to such Guarantor
during the period commencing on the date such Guarantor became a party to this
Agreement and ending on such date of determination in exchange for its execution
and delivery of this Agreement.
"EVENT OF DEFAULT": as defined in Section 5.
"GUARANTOR OBLIGATIONS": all of the obligations and
liabilities of the Guarantors hereunder, whether fixed, contingent, now existing
or hereafter arising, created, assumed, incurred or acquired.
"INSOLVENCY EVENT": any event set forth described in
Sections 9.1(h) or 9.1(i) of the Credit Agreement.
"NET WORTH": as of any date and with respect to each
Guarantor, the lesser of the following:
(a)(i) all of such Guarantor's "property, at
a fair valuation" (within the meaning of Section 101(32) of the
Bankruptcy Code) on such date, minus (ii) the sum of such Guarantor's
"debts" (within the meaning of Section 101(12) of the Bankruptcy Code)
other than such Guarantor's liability hereunder.
(b)(i) the "fair salable value of the
assets" (within the meaning of Article 10 of the New York Debtor
Creditor Law) of such Guarantor on such date, minus (ii) "the amount
that will be required to pay such Guarantor's probable liability on its
existing debts as they become absolute and matured" (as such phrase
would be construed under Article 10 of the New York Debtor Creditor
Law) on such date other than such Guarantor's liability hereunder.
"OBLIGATIONS": collectively, the Borrower Obligations
and the Guarantor Obligations.
"PAYMENT": the indefeasible payment in full in cash.
"SUBORDINATED DEBT": all indebtedness for borrowed
money and any other obligations, contingent or otherwise, of any Borrower to any
Guarantor, including, without limitation, all amounts, fees and expenses payable
by such Borrower to such Guarantor in respect thereof, in each case whether now
existing or hereafter arising, created, assumed, incurred or acquired.
"SUBSIDIARY GUARANTY ADDENDUM": a Subsidiary Guaranty
Addendum to this Agreement, duly completed, in the form of Annex B attached
hereto.
2. Guaranty
(a) Subject to Section 2(b) hereof, each Guarantor hereby
absolutely, irrevocably and unconditionally guarantees the full and prompt
payment when due (whether at stated maturity, by acceleration, by mandatory
prepayment, by notice of intention to prepay or otherwise) of the Borrower
Obligations. This Agreement constitutes a guaranty of payment and neither the
Agent nor any Lender shall have any obligation to enforce any Loan Document or
exercise any right or remedy with respect to any collateral security thereunder
by any action, including, without limitation, making or perfecting any claim
against any Person or any collateral security for any of the Borrower
Obligations prior to being entitled to the benefits of this Agreement. The
Guarantor Obligations shall be absolute, irrevocable, unconditional, direct and
primary and shall not be subject to any counterclaim, right of set-off or
defense whatsoever. The Agent may, at its option, proceed against the
Guarantors, or any one or more of them, in the first instance, to enforce the
Guarantor Obligations without first proceeding against the Borrowers or any
other Person, and without first resorting to any other rights or remedies, as
the Agent may deem advisable. In furtherance hereof, if the Agent or any Lender
is prevented by law from collecting or otherwise hindered from collecting or
otherwise enforcing any Borrower Obligation in accordance with its terms, the
Agent or such Lender, as the case may be, shall be entitled to receive hereunder
from the Guarantors after demand therefor, the sums which would have been
otherwise due had such collection or enforcement not been prevented or hindered.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum liability of each Guarantor hereunder shall not, as of
any date of determination, exceed the lesser of (i) the highest amount that is
valid and enforceable against such Guarantor under principles of New York State
contract law, and (ii) the sum of (A) all Consideration received by such
Guarantor as of such date of determination, plus (B) 95% of the Net Worth of
such Guarantor on such date of determination.
(c) Each Guarantor agrees that the Guarantor Obligations may
at any time and from time to time exceed the maximum liability of such Guarantor
hereunder without impairing this Agreement or affecting the rights and remedies
of the Agent or any Lender hereunder.
3. Absolute Obligation
Subject to Section 8, no Guarantor shall be released from
liability hereunder unless and until the Commitment Termination Date shall have
occurred and either (a) Payment in full of the Borrower Obligations shall have
been made or (b) Payment in full of the Guarantor Obligations of such Guarantor
shall have been made. Each Guarantor acknowledges and agrees that (i) neither
the Agent nor any Lender has made any representation or warranty to such
Guarantor with respect to the Borrowers, any of their Subsidiaries, any Loan
Document, or any agreement, instrument or document executed or delivered in
connection therewith or any other matter whatsoever, and (ii) such Guarantor
shall be liable hereunder, and such liability shall not be affected or impaired,
irrespective of (A) the validity or enforceability of any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith,
or the collectability of any of the Borrower Obligations, (B) the preference or
priority ranking with respect to any of the Borrower Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security under any Loan Document, or the release, exchange,
substitution or loss or impairment of any such security interest or collateral
security, (D) any failure, delay, neglect or omission by the Agent or any Lender
to realize upon or protect any direct or indirect collateral security,
indebtedness, liability or obligation, any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or any of
the Borrower Obligations, (E) the existence or exercise of any right of set-off
by the Agent or any Lender, (F) the existence, validity or enforceability of any
other guaranty with respect to any of the Borrower Obligations, the liability of
any other Person in respect of any of the Borrower Obligations, or the release
of any such Person or any other guarantor of any of the Borrower Obligations,
(G) any act or omission of the Agent or any Lender in connection with the
administration of any Loan Document, or any of the Borrower Obligations, (H) the
bankruptcy, insolvency, reorganization or receivership of, or any other
proceeding for the relief of debtors commenced by or against, any Person, (I)
the disaffirmance or rejection, or the purported disaffirmance or purported
rejection, of any of the Borrower Obligations, any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith or any of
the Borrower Obligations, or which might cause or permit to be invoked any
alteration in the time, amount, manner or payment or performance of any of the
Borrowers' obligations and liabilities (including, without limitation, the
Borrower Obligations), (K) the merger or consolidation of any Borrower into or
with any Person, (L) the sale by any Borrower of all or any part of its assets,
(M) the fact that at any time and from time to time none of the Borrower
Obligations may be outstanding or owing to the Agent or any Lender, (N) any
amendment or modification of, or supplement to, any Loan Document or (O) any
other reason or circumstance which might otherwise constitute a defense
available to or a discharge of the Borrowers in respect of their obligations or
liabilities (including, without limitation, the Borrower Obligations) or of such
Guarantor in respect of any of the Guarantor Obligations (other than by the
performance in full thereof).
4. Representations and Warranties
Each Guarantor hereby represents and warrants to the Agent as
follows:
(a) Existence and Power. Such Guarantor is duly
organized and validly existing in good standing under the laws of the
jurisdiction of its incorporation and in each other jurisdiction in which the
failure to be qualified and in good standing could reasonably be expected to
have a Material Adverse Effect.
(b) Authority and Execution. Such Guarantor has full
legal power and authority to own its Property, conduct its business, and enter
into, execute, deliver and perform the terms of this Agreement which has been
duly authorized by all proper and necessary corporate or other applicable action
and is in full compliance with its Organizational Documents. Such Guarantor has
duly executed and delivered this Agreement.
(c) Binding Obligation. This Agreement constitutes
the valid and binding obligation of such Guarantor, enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws related to or
affecting the enforcement of creditors' rights generally.
(d) Solvency. Such Guarantor (if a Current Guarantor,
both immediately before and after giving effect to this Agreement, or, if an
Additional Guarantor, immediately before and after giving effect to the
Subsidiary Guaranty Addendum pursuant to which it becomes a party to this
Agreement) and the transactions contemplated by the Loan Documents is Solvent.
5. Events of Default
Each of the following shall constitute an "EVENT OF DEFAULT":
(a) If any Guarantor shall fail to observe or perform
any term, covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of
Default under and as defined in the Credit Agreement.
6. Notices
Except as otherwise specifically provided herein, all notices,
requests, consents, demands, waivers and other communications hereunder shall be
in writing (including facsimile) and shall be electronically transmitted or
mailed by registered or certified mail or delivered in person, and all
statements, reports, documents, certificates and papers to be delivered
hereunder shall be mailed by first class mail or delivered in person, in each
case to the respective parties to this Agreement as follows: in the case of the
Agent or the Company, as set forth in Section 12.2 of the Credit Agreement, in
the case of each Current Guarantor, at the address set forth on Schedule I
hereto, and, in the case of each Additional Guarantor, as set forth in the
Subsidiary Guaranty Addendum executed and delivered by such Additional
Guarantor, or to such other addresses as to which the Agent may be hereafter
notified by the respective parties hereto. Any notice, request, consent, demand,
waiver or communication given in accordance with the provisions of this Section
shall be conclusively deemed to have been received by a party hereto and to be
effective on the day on which delivered to such party at its address specified
above or, if sent by registered or certified mail, on the delivery date noted on
the receipt therefor, provided that a notice of change of address shall be
deemed to be effective only when actually received. Any party hereto may rely on
signatures of the other parties hereto which are transmitted by facsimile or
other electronic means as fully as if originally signed.
7. Expenses
Each Guarantor agrees that it shall, upon demand, pay to the
Agent any and all reasonable out-of-pocket sums, costs and expenses, which the
Agent or any Lender may pay or incur defending, protecting or enforcing this
Agreement (whether suit is instituted or not), including, without limitation,
reasonable attorneys' fees and disbursements. All sums, costs and expenses which
are due and payable pursuant to this Section shall bear interest, payable on
demand, at the highest interest rate then payable on the Borrower Obligations.
8. Repayment in Bankruptcy, etc.
If, at any time or times subsequent to the payment of all or
any part of the Borrower Obligations or the Guarantor Obligations, the Agent or
any Lender shall be required to repay any amounts previously paid by or on
behalf of the Borrowers or any Guarantor in reduction thereof by virtue of an
order of any court having jurisdiction in the premises, including, without
limitation, as a result of an adjudication that such amounts constituted
preferential payments or fraudulent conveyances, the Guarantors unconditionally
agree to pay to the Agent within 10 days after demand a sum in cash equal to the
amount of such repayment, together with interest on such amount from the date of
such repayment by the Agent or such Lender, as the case may be, to the date of
payment to the Agent at the applicable after-maturity rate set forth in the
Credit Agreement.
9. Additional Guarantors
Upon the execution and delivery to the Agent of a Subsidiary
Guaranty Addendum by any Person, appropriately acknowledged, such Person shall
be a Guarantor.
10. Subordination
(a) At no time during the continuance of any Default or Event
of Default shall any payment of any nature whatsoever due in respect of the
Subordinated Debt payable to any Guarantor be made after the Agent shall have
given notice to the Company (on behalf of all Borrowers) to such effect.
(b) Upon any bankruptcy, insolvency, liquidation or
reorganization of any Borrower, or upon the filing of a petition in bankruptcy
or commencement of any proceeding in bankruptcy against any Borrower or upon any
distribution of the assets of any Borrower or upon any dissolution, winding up,
liquidation or reorganization of any Borrower, whether in bankruptcy,
insolvency, reorganization, arrangement or receivership proceedings, or upon any
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of either Borrower, or in the event any of the Subordinated Debt
shall for any reason become or be declared due and payable or otherwise:
(i) the Agent shall first be entitled to receive
Payment of all of the Obligations (whenever arising) before any Guarantor shall
be entitled to receive any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of the assets
of, any Borrower of any kind or character, whether in cash, property or
securities, to which any Guarantor would be entitled except for the provisions
of this Agreement, in connection with the Subordinated Debt, shall be paid or
delivered by the Person making such payment or distribution (whether a trustee
in bankruptcy, a receiver, custodian or liquidating trustee or otherwise)
directly to the Agent to the extent necessary to make Payment of all of the
Obligations remaining unpaid, after giving effect to any concurrent payment or
distribution (or provision therefor) in cash to the Agent;
(iii) No Guarantor shall ask, demand by legal
proceedings or otherwise, or take or receive from any Borrower, by set-off,
counterclaim or in any other manner, any payment or distribution on account of
the Subordinated Debt other than as expressly permitted hereunder; and
(iv) Each Guarantor agrees to declare the
Subordinated Debt to be due and payable and, at least 30 days before the time
required by applicable law or rule, to file proof of claim therefor, in default
of which the Agent is hereby irrevocably authorized so to declare and file in
order to effectuate the provisions hereof.
Notwithstanding the foregoing, in the event that any payment
by, or distribution of the assets of, any Borrower of any kind or character
prohibited hereby, whether in cash, property or securities, shall for any reason
be received by any Guarantor in respect of the Subordinated Debt, such payment
or distribution shall be held in trust for the benefit of the Agent, and shall
be immediately paid over to the Agent, to the extent necessary to make Payment
of all of the Obligations remaining unpaid, after giving effect to any
concurrent payment or distribution (or provision therefor) in cash to the Agent.
(c) Without the prior written consent of the Agent, no
Borrower will give, and no Guarantor will receive or accept, any collateral of
any nature whatsoever for the Subordinated Debt on any Property or assets,
whether now existing or hereafter acquired, of any Borrower.
(d) Nothing contained in this Agreement is intended to or
shall impair, as between and among the Borrowers, their creditors (other than
the holders of the Obligations) and any Guarantor, the obligation of the
Borrowers to make Payment to such Guarantor of any amount due in respect of the
Subordinated Debt as and when the same shall become due and payable in
accordance with the terms thereof, or affect the relative rights of the
Guarantors and the creditors of the Borrowers (other than the holders of the
Obligations), in each case subject to the rights of the holders of the
Obligations under this Agreement.
(e) Unless and until Payment of all of the Obligations has
occurred and the termination of the Credit Agreement, each Guarantor agrees not
to declare any part of the Subordinated Debt to be due and payable or exercise
any of the rights or remedies which it may have, or bring (in its capacity as
holder of the Subordinated Debt), or join with any other creditor in
instituting, any proceedings against any Borrower under any bankruptcy,
insolvency, reorganization, arrangement, receivership or other similar law,
unless the Obligations shall have been declared immediately due and payable or,
in the case of the institution of any such proceedings, the Agent shall have
joined in the institution thereof or expressly consented thereto in writing. In
the event that the Agent shall have so declared the Obligations immediately due
and payable, each Guarantor agrees to declare the Subordinated Debt then due to
be due and payable, provided, however, if the Agent shall rescind any such
declaration, each Guarantor shall automatically be deemed to have rescinded its
declaration.
(f) No right of the Agent to enforce this Agreement shall at
any time or in any way be prejudiced or impaired by any act or failure to act on
the part of any Guarantor, or by any noncompliance by any Guarantor with the
terms, provisions and covenants herein, and the Agent is hereby expressly
authorized to extend, waive, renew, increase, decrease, modify or amend the
terms of the Obligations or any collateral security therefor, and to waive any
default, modify, amend, rescind or waive any provision of any document executed
and delivered in connection with the Obligations and to release, sell or
exchange any such collateral security and otherwise deal freely with the
Borrowers, all without notice to or consent of any Guarantor and without
affecting the liabilities and obligations of the parties hereto.
(g) Each Borrower and each Guarantor waives notice of
acceptance of this Agreement by the Agent and the Lenders, and each Guarantor
waives notice of and consents to the making, amount and terms of the Obligations
which may exist from time to time and any renewal, extension, increase,
amendment or modification thereof and any other action which the Agent or any
Lender in its sole and absolute discretion, may take or omit to take with
respect thereto. This section shall constitute a continuing offer to the Agent
and the Lenders, its provisions are made for the benefit of the Agent and the
Lenders, and the Agent and the Lenders are made obligees hereunder and may
enforce such provisions.
(h) No Guarantor shall sell, assign, transfer or otherwise
dispose of all or any part of the Subordinated Debt without having first
obtained the prior written consent of the Agent.
(i) Each Borrower agrees that it will not make any payment of
any of the Subordinated Debt, or take any other action, in contravention of the
provisions of this Agreement.
(j) Each Guarantor agrees that the provisions of this
Agreement shall be applicable to the Obligations whenever the same may arise and
notwithstanding the fact that no Obligations may be outstanding from time to
time and may have paid down to zero at any time or from time to time, it being
understood that the Credit Agreement permits the Borrowers to borrow, repay and
reborrow from time to time subject to the terms and conditions thereof, all or
any of which terms and conditions may be waived.
(k) All rights and interests of the Agent hereunder, and all
agreements and obligations of the Borrowers and the Guarantors under this
Agreement, shall remain in full force and effect irrespective of (i) any lack of
validity or enforceability of any of the Loan Documents; (ii) any change in the
time, manner or place of payment of, or any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to departure
from any of the Obligations; (iii) any exchange, release or non-perfection of
the Collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Obligations; or (iv) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Borrower in respect of the Obligations or this Agreement. This
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent upon the insolvency, bankruptcy or
reorganization of any Borrower or otherwise, all as though such payment had not
been made.
(l) Each Guarantor authorizes the Agent, without notice or
demand and without affecting or impairing the obligations of any Guarantor, from
time to time to (i) renew, compromise, extend, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
Obligations, or any part thereof, including, without limitation, to increase or
decrease the rate of interest thereon or the principal amount thereof; (ii) take
or hold security for the payment of the Obligations and exchange, enforce,
foreclose upon, waive and release any such security; (iii) apply such security
and direct the order or manner of sale thereof as the Agent, in its sole
discretion, may determine; (iv) release and substitute one or more endorsers,
warrantors, borrowers or other obligors; and (v) exercise or refrain from
exercising any rights against the Borrowers or any other Person.
11. Miscellaneous
(a) Each Guarantor expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim which such Guarantor may now or hereafter have against the Borrowers, or
against or with respect to the Borrowers' Property, arising from the existence
or performance of this Agreement until Payment of all of the Obligations has
occurred and the Credit Agreement has been terminated.
(b) Except as otherwise expressly provided in this Agreement,
each Guarantor hereby waives presentment, demand for payment, notice of default,
nonperformance and dishonor, protest and notice of protest of or in respect of
this Agreement, the other Loan Documents, and the Borrower Obligations, notice
of acceptance of this Agreement and reliance hereupon by the Agent and each
Lender, and the incurrence of any of the Borrower Obligations, notice of any
sale of collateral security or any default of any sort.
(c) No Guarantor is relying upon the Agent or any Lender to
provide to such Guarantor any information concerning the Borrowers or any
Subsidiary, and each Guarantor has made arrangements satisfactory to such
Guarantor to obtain from the Borrowers on a continuing basis such information
concerning the Borrowers and their Subsidiaries as such Guarantor may desire.
(d) Each Guarantor agrees that any statement of account with
respect to the Borrower Obligations from the Agent or any Lender to the
Borrowers which binds the Borrowers shall also be binding upon such Guarantor,
and that copies of said statements of account maintained in the regular course
of the Agent's or such Lender's business, as the case may be, may be used in
evidence against such Guarantor in order to establish its Guarantor Obligations.
(e) Each Guarantor acknowledges that it has received a copy of
the Loan Documents and has approved of the same. In addition, such Guarantor
acknowledges having read each Loan Document and having had the advice of counsel
in connection with all matters concerning its execution and delivery of this
Agreement.
(f) No Guarantor may assign any right, or delegate any duty,
it may have under this Agreement.
(g) Subject to the limitations set forth in Section 2(b), the
Guarantor Obligations shall be joint and several.
(h) This Agreement is the "SUBSIDIARY GUARANTY" under, and as
such term is defined in, the Credit Agreement, and is subject to, and should be
construed in accordance with, the provisions thereof. Each of the Agent and the
Borrowers acknowledges that certain provisions of the Credit Agreement,
including, without limitation, Sections 1.2 (Principles of Construction), 12.1
(Amendments, Waivers, Etc.), 12.3 (No Waiver; Cumulative Remedies), 12.4
(Survival of Representations and Warranties), 12.7 (Successors and Assigns),
12.8 (Counterparts), 12.9 (Set-off and Sharing of Payments), 12.10 (Indemnity),
12.11 (Governing Law), 12.12 (Severability), 12.13 (Integration), 12.15
(Acknowledgments), 12.16 (Consent to Jurisdiction), 12.17 (Service of Process),
12.18 (No Limitation on Service or Suit) and 12.19 (WAIVER OF TRIAL BY JURY)
thereof, are made applicable to this Agreement and all such provisions are
incorporated by reference herein as if fully set forth herein.
IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Subsidiary Guaranty
and Subordination Agreement to be duly executed on its behalf.
Each of the Persons listed on Annex A attached hereto
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
LINENS 'N THINGS, INC., on behalf of itself and all
Borrowers
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
THE BANK OF NEW YORK, as Agent
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
ANNEX A TO THE SUBSIDIARY GUARANTY
AND SUBORDINATION AGREEMENT
DATED AS OF MARCH 31, 1998
LIST OF CURRENT GUARANTORS
ANNEX B TO THE SUBSIDIARY GUARANTY
AND SUBORDINATION AGREEMENT
DATED AS OF MARCH 31, 1998
FORM OF SUBSIDIARY GUARANTY ADDENDUM
SUBSIDIARY GUARANTY ADDENDUM, dated as of _____ __, 199_, made
by _____________, a __________ corporation (the "ADDITIONAL GUARANTOR") to the
Subsidiary Guaranty and Subordination Agreement, dated as of ________, 1996 (as
the same may be amended, supplemented or otherwise modified from time to time,
(the "AGREEMENT"), by and among each Guarantor party thereto, LINENS 'N THINGS,
INC. (the "COMPANY") and THE BANK OF NEW YORK, as Agent (in such capacity, the
"AGENT") under the Credit Agreement referred to below.
I. Reference is made to the Credit Agreement, dated as of
November __, 1996, by and among the Company, the Subsidiary Borrowers party
thereto, the Lenders party thereto, and The Bank of New York, as Agent (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement").
II. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement and the
Credit Agreement.
III. The Guarantors and the Company have entered into the
Agreement in order to induce the Agent and the Lenders to enter into the Credit
Agreement and make the Loans, the Swing Line Lender to make the Swing Line
Loans, the Issuer to issue the Letters of Credit and the Lenders to participate
therein.
IV. The Additional Guarantor is executing this Subsidiary
Guaranty Addendum in accordance with the requirements of the Credit Agreement
and the Agreement, to become a Guarantor under the Agreement in order to induce
the Lenders to make additional Loans, the Swing Line Lender to make additional
Swing Line Loans, the Issuer to issue additional Letters of Credit and the
Lenders to participate therein and as consideration for Loans previously made
and Letters of Credit previously issued.
Accordingly, the Agent and the Additional Guarantor agree as
follows:
1. In accordance with Section 9 of the Agreement, by signing
this Subsidiary Guaranty Addendum and delivering the other instruments and
documents required by the Credit Agreement, the Additional Guarantor becomes a
Guarantor under the Agreement with the same force and effect as if originally
named therein as a Guarantor and the Additional Guarantor hereby agrees to all
the terms and provisions of the Agreement applicable to it as a Guarantor
thereunder.
2. The Additional Guarantor hereby makes all of the
representations and warranties made by the Guarantors in Section 4 of the
Agreement, which provisions are hereby incorporated herein by reference.
The Additional Guarantor and the Agent have duly executed this
Subsidiary Guaranty Addendum to the Agreement as of the day and year first above
written.
[ADDITIONAL GUARANTOR]
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
Accepted:
THE BANK OF NEW YORK, as Agent
By:-------------------------------------------------
Name:-----------------------------------------------
Title:----------------------------------------------
SCHEDULE I
A. SUBSIDIARY GUARANTORS:
B. ADDRESS FOR NOTICES:
------------------------------------------
------------------------------------------
------------------------------------------
LINENS 'N THINGS EXHIBIT J
FORM OF COMPETITIVE BID REQUEST
[Date]
The Bank of New York, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ______________,
Re: Credit Agreement, dated as of March 31, 1998, by and among
Linens 'N Things, Inc., the Lenders party thereto, and The
Bank of New York, as Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 2.4 of the Credit Agreement, the Borrower
hereby gives notice of its request to borrow Competitive Bid Loans in the
aggregate sum of $____________ on ____________, which borrowing shall consist of
the following:
Competitive
Amount Interest Period
------ ---------------
The Borrower hereby certifies that on the Borrowing Date set
forth above, and after giving effect to the Competitive Bid Loans requested
hereby:
(a) The Borrower shall be in compliance with all of the terms,
covenants and conditions of each Loan Document.
(b) There shall exist no Default or Event of Default.
(c) The representations and warranties contained in the Credit
Agreement shall be true and correct, except those which are expressly specified
to be made as of an earlier date.
IN EVIDENCE of the foregoing, the undersigned has caused this
Competitive Bid Request to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By:-------------------------------------
Name:-----------------------------------
Title:----------------------------------
LINENS 'N THINGS EXHIBIT K
FORM OF INVITATION TO BID
[Date]
To the Lenders party
from time to time to the
captioned Credit Agreement
Re: Credit Agreement, dated as of March 31, 1998, by and among
Linens 'n Things, Inc., the Lenders party thereto, and The
Bank of New York, as Agent (as amended, supplemented or
otherwise modified from time to time, "Credit Agreement")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
Pursuant to a Competitive Bid Request, the Borrower gave
notice of its request to borrow Competitive Bid Loans in the aggregate sum of
$____________ on ____________, which borrowing would consist of the following
type or types of Competitive Advances:
Competitive
Amount Interest Period
------ ---------------
The Lenders are hereby invited to bid, pursuant to the terms and
conditions of the Credit Agreement, on such requested Competitive Bid Loans.
THE BANK OF NEW YORK, as Agent
By:-------------------------------------
Name:-----------------------------------
Title:----------------------------------
LINENS 'N THINGS EXHIBIT L
FORM OF COMPETITIVE BID
[Date]
The Bank of New York, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: _________________,
Re: Credit Agreement, dated as of March 31, 1998, by and among
Linens 'n Things, Inc., the Lenders party thereto, and The
Bank of New York, as Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
In response to a Competitive Bid Request, the undersigned
Lender hereby offers to make Competitive Loan(s) in the aggregate sum of
$____________ on ____________:
Comptetitive
Interest Competitive
Amount Period Bid Rate
------ ------------ -----------
[fixed rate]
[LENDER]
By:-------------------------------------
Name:-----------------------------------
Title:----------------------------------
LINENS 'N THINGS EXHIBIT M
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Bank of New York, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ______________,
Re: Credit Agreement, dated as of March 31, 1998, by and among
Linens 'n Things, Inc., the Lenders party thereto, and The
Bank of New York, as Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
Capitalized terms used herein that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 2.4(e) of the Credit Agreement, the
Borrower hereby gives notice of its acceptance of the following Competitive
Bids:
------------- ---------------
------------- ---------------,
and its rejection of all other Competitive Bids, in each case made pursuant to
the Competitive Bid Request, dated _______________.
IN EVIDENCE of the foregoing, the undersigned has caused this
Competitive Bid Accept/Reject Letter to be duly executed on its behalf.
LINENS 'N THINGS, INC.
By:-------------------------------------
Name:-----------------------------------
Title:----------------------------------
SCHEDULE 1.1L
EXISTING LETTERS OF CREDIT
CURRENT ISSUE EXPIRY
NUMBER BALANCE DATE DATE BENEFICIARY NAME
--------------------------------------------------------------------------------
00035243 $1,650,000 13-DEC-97 04-DEC-98 Reliance National
Underwriting Company
SCHEDULE 4.4
LIST OF LITIGATION
------------------
None.
SCHEDULE 8.1
LIST OF EXISTING INDEBTEDNESS
-----------------------------
None.
SCHEDULE 8.2
LIST OF EXISTING LIENS
----------------------
None.
SCHEDULE 8.12
LIST OF EXISTING INVESTMENTS
----------------------------
None.